<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
JACOR COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OHIO 4832 31-0978313
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>
1300 PNC CENTER, 201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
(513) 621-1300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
R. CHRISTOPHER WEBER
JACOR COMMUNICATIONS, INC.
1300 PNC CENTER, 201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
(513) 621-1300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
Richard G. Schmalzl, Esq. Lyle G. Ganske, Esq.
Douglas D. Roberts, Esq. Patrick J. Leddy, Esq.
Graydon, Head & Ritchey Jones, Day, Reavis & Pogue
1900 Fifth Third Center North Point, 901 Lakeside Avenue
Cincinnati, Ohio 45202 Cleveland, Ohio 44114
(513) 621-6464 (216) 586-3939
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective and the effective time of the merger ("Merger") of JCAC, Inc.
("Acquisition Corp."), a wholly-owned subsidiary of Jacor Communications, Inc.
("Jacor"), with and into Citicasters Inc. ("Citicasters"), pursuant to the
Agreement and Plan of Merger dated as of February 12, 1996 by and among
Citicasters, Jacor and Acquisition Corp., as described in the enclosed Proxy
Statement/Information Statement/Prospectus included as Part I of this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock Purchase Warrants.............. 21,618,990.5 (1) (1) $228,266.72(2)
Common Stock issuable upon
exercise of Warrants....................... 4,400,000 N/A N/A None(3)
<FN>
(1) Pursuant to the Agreement and Plan of Merger, dated as of February 12, 1996
(the "Merger Agreement"), one warrant ("Jacor Warrants") to purchase a
fractional share of Jacor common stock ("Jacor Common Stock") will be
issued for each share of Class A Common Stock, $.01 par value, of
Citicasters ("Citicasters Common Stock") exchanged in the Merger and for
each stock option to acquire a share of Citicasters Common Stock
outstanding immediately prior to the effective time of the Merger. The
estimated value of the Jacor Warrants is $1.12 per Jacor Warrant. In
addition, for each share of Citicasters Common Stock held, the holder will
receive $29.50 in cash. Based upon the number of shares of Citicasters
Common Stock outstanding on the date hereof, the aggregate value of the
transaction is $661,973,489.11. The registration fees due hereunder are
based upon this transaction value.
(2) Jacor paid $132,394.70 to the Commission on March 26, 1996 in connection
with the confidential filing of the Proxy Statement/ Information
Statement/Prospectus that forms a part of this Registration Statement. The
additional registration fee due hereunder of $95,872.02 is being paid
herewith.
(3) No additional filing fee is required pursuant to the last sentence of Rule
457(g).
</TABLE>
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JACOR COMMUNICATIONS, INC.
CROSS-REFERENCE SHEET
FOR
REGISTRATION STATEMENT ON FORM S-4 AND
PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS
<TABLE>
<CAPTION>
CAPTION IN PROXY STATEMENT/
FORM S-4 -- ITEM NUMBER AND CAPTION INFORMATION STATEMENT/PROSPECTUS
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>
A. INFORMATION ABOUT THE TRANSACTION
Item 1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................... Facing Page of the Registration Statement;
Cross-Reference Sheet; Outside Front Cover Page
of Proxy Statement/Information Statement/
Prospectus
Item 2. Inside Front and Outside Back Cover Pages of
Prospectus....................................... Available Information; Incorporation of Certain
Documents by Reference; Table of Contents
Item 3. Risk Factors, Ratio of Earnings to Fixed Charges,
and Other Information............................ Summary of Proxy Statement/Information
Statement/Prospectus; Selected Historical
Financial Data; Comparative Per Share Market
Price and Dividend Information; Risk Factors
Item 4. Terms of the Transaction.......................... Summary of Proxy Statement/Information
Statement/Prospectus; The Merger -- Certain Terms
of the Merger Agreement and Related Agreements;
The Merger -- Background of and Reasons for the
Merger -- Jacor; The Merger -- Background of and
Reasons for the Merger -- Citicasters; The Merger
-- Description of Jacor Warrants; The Merger --
Accounting Treatment; The Merger -- Certain
Federal Income Tax Consequences; The Merger --
Opinion of Citicasters Financial Advisor;
Description of Capital Stock; Comparison of
Corporate Charters and Rights of Security Holders
Item 5. Pro Forma Financial Information................... Summary of Proxy Statement/Information
Statement/Prospectus; Unaudited Pro Forma
Financial Information
Item 6. Material Contacts With the Company Being
Acquired......................................... Summary of Proxy Statement/Information
Statement/Prospectus; The Merger
Item 7. Additional Information Required For Reoffering by
Persons and Parties Deemed to be Underwriters.... Not Applicable
Item 8. Interests of Named Experts and Counsel............ Not Applicable
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
CAPTION IN PROXY STATEMENT/
FORM S-4 -- ITEM NUMBER AND CAPTION INFORMATION STATEMENT/PROSPECTUS
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>
Item 9. Disclosure of Commission Position on
Indemnification For Securities Act Liabilities... Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
Item 10. Information With Respect to S-3 Registrants....... Incorporation of Certain Documents by Reference;
Business of Jacor; Business of New Jacor
Item 11. Incorporation of Certain Information by
Reference........................................ Incorporation of Certain Documents by Reference;
Business of Jacor; Business of New Jacor
Item 12. Information With Respect to S-2 or S-3
Registrants...................................... Not Applicable
Item 13. Incorporation of Certain Information by
Reference........................................ Not Applicable
Item 14. Information With Respect to Registrants Other than
S-2 or S-3 Registrants........................... Not Applicable
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
Item 15. Information With Respect to S-3 Companies......... Incorporation of Certain Documents by Reference;
Business of Citicasters
Item 16. Information With Respect to S-2 or S-3
Companies........................................ Not Applicable
Item 17. Information With Respect to Companies Other than
S-2 or S-3 Companies............................. Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
Item 18. Information if Proxies, Consents or Authorization
Are to be Solicited.............................. Summary of Proxy Statement/Information
Statement/Prospectus; Jacor Annual Meeting;
Citicasters Action by Written Consent -- Jacor
Annual Meeting -- Jacor Proxies; Proposal to
Approve the Reincorporation of Jacor; Proposal to
Approve Issuance of Jacor Warrants and Shares of
Jacor Common Stock Issuable Upon Exercise
Thereof; Election of Jacor Directors; Security
Ownership of Certain Beneficial Owners and
Management of Jacor; Jacor Executive
Compensation; Certain Relationships and Related
Transactions; Shareholder Proposals for 1997
Jacor Annual Meeting; Other Matters
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
CAPTION IN PROXY STATEMENT/
FORM S-4 -- ITEM NUMBER AND CAPTION INFORMATION STATEMENT/PROSPECTUS
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>
Item 19. Information if Proxies, Consents or Authorizations
Are Not to be Solicited or in an Exchange
Offer............................................ Summary of Proxy Statement/Information
Statement/Prospectus; Jacor Annual Meeting;
Citicasters Action by Written Consent --
Citicasters Action by Written Consent; The
Merger; Security Ownership of Certain Beneficial
Owners and Management of Citicasters
</TABLE>
iii
<PAGE>
JACOR COMMUNICATIONS, INC.
1300 PNC CENTER
201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
June 24, 1996
Dear Jacor Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders
to be held on Tuesday, July 23, 1996 at 10:30 a.m., local time, in the Fifth
Third Bank Theatre at the Aronoff Center for the Arts, located at the corner of
East Seventh Street and Main Street, Cincinnati, Ohio.
The accompanying Notice of Annual Meeting and Proxy Statement/Information
Statement/Prospectus provide information concerning the proposals to be
considered and acted upon at the Annual Meeting. Also at the Annual Meeting, we
will report on the operations of the Company during the year ended December 31,
1995.
It is important for you to exercise your voting rights as a Shareholder
regardless of the number of shares you own. PLEASE COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE PROXY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. Please do so
whether or not you expect to attend the Annual Meeting and wish to vote in
person.
We look forward to receipt of your Proxy and to your attendance at the
Annual Meeting.
Sincerely,
Sheli Z. Rosenberg
BOARD CHAIR
<PAGE>
JACOR COMMUNICATIONS, INC.
1300 PNC CENTER
201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 23, 1996
-------------------
To the Shareholders of Jacor Communications, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Jacor
Communications, Inc. ("Jacor") will be held on Tuesday, July 23, 1996 at 10:30
a.m., local time, in the Fifth Third Bank Theatre at the Aronoff Center for the
Arts, located at the corner of East Seventh Street and Main Street, Cincinnati,
Ohio, for the purposes of considering and acting on the following proposals set
forth below. None of the proposals are dependent upon the adoption of any other
proposal.
1. To approve the merger of Jacor with and into New Jacor, Inc., a Delaware
corporation ("New Jacor") and wholly-owned subsidiary of Jacor. The
purpose of the proposed merger is to reincorporate Jacor under the laws
of the State of Delaware (the "Reincorporation"). If the Reincorporation
is approved and consummated, New Jacor, as the surviving corporation in
the merger to effect the Reincorporation, will be renamed "Jacor
Communications, Inc.".
2. To approve the issuance by Jacor, and any successor corporation thereto,
of common stock purchase warrants (the "Jacor Warrants") to acquire
4,400,000 shares of Jacor common stock and the issuance of the shares of
Jacor common stock issuable upon the exercise of any such Jacor Warrants.
The Jacor Warrants will be issued to the holders of the Class A Common
Stock, par value $.01 per share, of Citicasters Inc., a Florida
corporation ("Citicasters"), pursuant to the Agreement and Plan of Merger
dated as of February 12, 1996 by and among Jacor, JCAC, Inc., a Florida
corporation and wholly owned Jacor subsidiary ("Acquisition Corp."), and
Citicasters (the "Merger Agreement"). The Merger Agreement provides for
the merger (the "Merger") of Acquisition Corp. with and into Citicasters
such that, upon consummation of the Merger, Citicasters will become a
wholly owned Jacor subsidiary, as described in the accompanying Proxy
Statement/Information Statement/Prospectus. If the Reincorporation is
approved at the Annual Meeting, the Reincorporation is expected to be
effected prior to the consummation of the Merger and the Jacor Warrants
would thereby constitute common stock purchase warrants to acquire shares
of New Jacor common stock.
3. To elect seven directors to serve until the next annual meeting of Jacor
shareholders and until the directors' respective successors are elected
and qualified.
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
Holders of record of Jacor common stock at the close of business on May 31,
1996 are entitled to notice of and to vote at the Annual Meeting.
UNDER BOTH OHIO LAW AND DELAWARE LAW, THE MERGER DOES NOT REQUIRE THE
APPROVAL OF THE JACOR SHAREHOLDERS, AND, THEREFORE, HOLDERS OF SHARES OF JACOR
COMMON STOCK WILL NOT HAVE APPRAISAL RIGHTS OR RIGHTS AS DISSENTING SHAREHOLDERS
WITH RESPECT TO THE MERGER.
Enclosed herewith is a Proxy Statement/Information Statement/Prospectus and
a Proxy. The Annual Report of Jacor for the year ended December 31, 1995, was
mailed to Jacor shareholders beginning on or about April 18, 1996. If you have
not received the Annual Report, please notify Jacor Communications, Inc.,
Investor Services Department, 1300 PNC Center, 201 East Fifth Street,
Cincinnati, Ohio 45202, telephone: (513) 621-1300, and a copy will be sent to
you.
By Order of the Board of Directors,
R. Christopher Weber
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND SECRETARY
Cincinnati, Ohio
June 24, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE. YOU MAY REVOKE YOUR PROXY IN WRITING OR BY ATTENDING THE ANNUAL
MEETING AND VOTING IN PERSON.
<PAGE>
CITICASTERS INC.
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
June 24, 1996
Dear Citicasters Shareholder:
On behalf of the Board of Directors of Citicasters Inc., a Florida
corporation ("Citicasters"), I am pleased to inform you that on February 12,
1996, Citicasters, Jacor Communications, Inc., an Ohio corporation ("Jacor"),
and JCAC, Inc., a Florida corporation and a wholly owned subsidiary of Jacor
("Acquisition Corp."), entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which Acquisition Corp. will merge with and into
Citicasters (the "Merger"), with Citicasters as the surviving corporation. At
the effective time of the Merger (the "Effective Time"), each share of Class A
Common Stock, par value $0.01 per share, of Citicasters (the "Citicasters Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than Citicasters Common Stock owned by Citicasters, Jacor, Acquisition Corp. or
any direct or indirect subsidiary of Citicasters, Jacor or Acquisition Corp., or
any Citicasters Common Stock held in the treasury of Citicasters) will, by
virtue of the Merger and without any action on the part of holders thereof, be
converted into and represent the right to receive: (i) $29.50 in cash, plus, if
the closing of the transactions contemplated by the Merger (the "Closing") does
not occur prior to October 1, 1996, for each full calendar month ending prior to
the Closing, commencing with October, 1996, an additional amount of $.22125 in
cash (the "Cash Consideration"); plus (ii) a warrant to acquire a fractional
share of Common Stock of Jacor on the terms described in the Warrant Agreement
to be executed at the Closing (the "Warrant Consideration," and together with
the Cash Consideration, the "Merger Consideration").
Your Board of Directors unanimously adopted the Merger Agreement and
determined that the terms of the Merger are fair to, and in the best interests
of, the holders of Citicasters Common Stock. In reaching its conclusion, the
Board of Directors gave careful consideration to a number of factors, which are
described in the Proxy Statement/Information Statement/Prospectus filed by Jacor
and Citicasters with the Securities and Exchange Commission (a copy of which is
enclosed with this letter). I urge you to read the enclosed materials carefully.
The Board also engaged Salomon Brothers Inc as its financial advisor to evaluate
the Merger Agreement and the Merger, and Salomon Brothers Inc has rendered to
the Board its written opinion, which is included as an exhibit to the Proxy
Statement/Information Statement/Prospectus, that the Merger Consideration is
fair, from a financial point of view, to holders of Citicasters Common Stock as
of the date of delivery of such opinion.
Also on February 12, 1996, certain shareholders of Citicasters
(collectively, the "Consenting Stockholders") entered into an agreement with
Jacor, pursuant to which each of the Consenting Stockholders agreed to execute
and deliver to Citicasters prior to the close of business on the thirtieth day
following the date of the Merger Agreement, unless the Merger Agreement was
terminated prior to such date, an irrevocable written consent approving the
Merger Agreement. On March 13, 1996, the Consenting Stockholders, owners
collectively of approximately 54% of Citicasters Common Stock outstanding on
February 12, 1996, executed and delivered to Jacor the written consents to
approve the Merger Agreement. On June 19, 1996, the Consenting Stockholders
delivered to Jacor new written consents to further approve the Merger Agreement.
Jacor subsequently delivered all such written consents to Citicasters on the
date hereof. Such written consents are sufficient under the Florida Business
Corporation Act ("FBCA") to approve the Merger Agreement. Therefore, no further
action by the shareholders of Citicasters is necessary to approve the Merger
Agreement or consummate the Merger and no such approval will be sought.
ACCORDINGLY, WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY. NO MEETING OF CITICASTERS SHAREHOLDERS WILL BE HELD TO CONSIDER
APPROVAL OF THE MERGER AGREEMENT.
BECAUSE CITICASTERS COMMON STOCK WAS REGISTERED ON THE NASDAQ STOCK MARKET'S
NATIONAL MARKET SYSTEM AS OF THE RECORD DATE, HOLDERS OF CITICASTERS COMMON
STOCK WILL NOT HAVE DISSENTERS' RIGHTS UNDER THE FBCA IN CONNECTION WITH THE
MERGER.
Promptly after the Effective Time, a letter of transmittal and instructions
for the use thereof will be sent by the Exchange Agent to holders of Citicasters
Common Stock as of the Effective Time to enable such
<PAGE>
holders to surrender their Citicasters Common Stock in exchange for the Merger
Consideration. Because the obligations of Citicasters, Jacor and Acquisition
Corp. to consummate the Merger are subject to certain conditions, including
certain regulatory approvals, the date on which the Merger will be consummated
cannot be specified at this time. ACCORDINGLY, HOLDERS OF CITICASTERS COMMON
STOCK ARE REQUESTED NOT TO SURRENDER THEIR CERTIFICATES FOR EXCHANGE UNTIL THE
LETTER OF TRANSMITTAL IS RECEIVED.
Sincerely,
John P. Zanotti
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2
<PAGE>
PROXY STATEMENT FOR
JACOR COMMUNICATIONS, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 23, 1996
---------------------
INFORMATION STATEMENT OF CITICASTERS INC.
---------------------
PROSPECTUS OF JACOR COMMUNICATIONS, INC.
---------------------
This Proxy Statement/Information Statement/Prospectus relates to the
proposed merger (the "Merger") of JCAC, Inc., a Florida corporation ("JCAC" or
"Acquisition Corp.") and wholly owned subsidiary of Jacor Communications, Inc.
("Jacor"), with and into Citicasters Inc., a Florida corporation
("Citicasters"), pursuant to the Agreement and Plan of Merger dated as of
February 12, 1996 by and among Jacor, Acquisition Corp. and Citicasters (the
"Merger Agreement"), and is being furnished to the holders of Jacor common
stock, no par value, in connection with the solicitation of proxies by Jacor's
Board of Directors (the "Jacor Board") for use at the Annual Meeting of Jacor
shareholders (the "Jacor Annual Meeting") to be held on Tuesday, July 23, 1996
at 10:30 a.m. local time, in the Fifth Third Theatre at the Aronoff Center for
the Arts, located at the corner of East Seventh Street and Main Street,
Cincinnati, Ohio, and any adjournment or postponement thereof.
This Proxy Statement/Information Statement/Prospectus is also being
furnished to the shareholders of Citicasters in connection with the adoption of
the Merger Agreement by Citicasters' Board of Directors (the "Citicasters
Board") and the approval of the Merger Agreement by the written consent of the
holders of a majority of the outstanding shares of the Citicasters' Class A
Common Stock, par value $.01 per share (the "Citicasters Common Stock"). See
"JACOR ANNUAL MEETING; CITICASTERS ACTION BY WRITTEN CONSENT" for a more
detailed discussion of the actions taken by the Consenting Stockholders (as
defined herein on page 8). CITICASTERS IS NOT ASKING CITICASTERS SHAREHOLDERS
FOR A PROXY AND CITICASTERS SHAREHOLDERS ARE REQUESTED NOT TO SEND CITICASTERS A
PROXY.
BECAUSE CITICASTERS COMMON STOCK WAS REGISTERED ON THE NASDAQ STOCK MARKET'S
NATIONAL MARKET (THE "NASDAQ NATIONAL MARKET") AS OF THE RECORD DATE, HOLDERS OF
CITICASTERS COMMON STOCK WILL NOT HAVE DISSENTERS' RIGHTS UNDER FLORIDA LAW IN
CONNECTION WITH THE MERGER. UNDER BOTH OHIO LAW AND DELAWARE LAW, THE MERGER
DOES NOT REQUIRE THE APPROVAL OF THE JACOR SHAREHOLDERS, AND, THEREFORE, HOLDERS
OF SHARES OF JACOR COMMON STOCK WILL NOT HAVE APPRAISAL RIGHTS OR RIGHTS AS
DISSENTING SHAREHOLDERS WITH RESPECT TO THE MERGER.
This Proxy Statement/Information Statement/Prospectus also constitutes a
prospectus of Jacor filed as part of a Registration Statement on Form S-4 (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to up to 21,618,990.5 common stock purchase warrants (the
"Jacor Warrants") to acquire shares of Jacor common stock to be issued in the
Merger pursuant to the Merger Agreement. If all such Jacor Warrants were
exercised in full, 4,400,000 shares of Jacor common stock would be issued to the
holders of such Jacor Warrants. Under the Merger Agreement, Jacor has agreed
with Citicasters to use its reasonable best efforts to cause the Jacor Warrants
to be listed for trading on the Nasdaq National Market. Jacor intends to apply
for such listing after the date hereof and prior to the effective time of the
Merger.
Upon approval by the Jacor shareholders at the Jacor Annual Meeting, Jacor
will merge with and into New Jacor Inc., a Delaware corporation and wholly owned
Jacor subsidiary ("New Jacor"), with the resulting Delaware corporation being
renamed "Jacor Communications, Inc." (the "Reincorporation"). See "PROPOSAL TO
APPROVE THE REINCORPORATION OF JACOR." The Reincorporation is expected to occur
prior to the effective time of the Merger and New Jacor would thereby acquire
all rights and assume all obligations of Jacor under the Merger Agreement by
operation of law.
The Merger Agreement provides that Citicasters shareholders will have the
right to receive in the Merger, in exchange for each issued and outstanding
share of Citicasters Common Stock, (i) $29.50 in cash, plus, if the closing of
the transactions contemplated by the Merger (the "Closing") does not occur prior
to October 1, 1996, for each full calendar month ending prior to the Closing,
commencing with October 1996, an additional amount of $.22125 in cash (the "Cash
Consideration"); plus (ii) a Jacor Warrant to acquire a fractional share of
Jacor common stock, which fractional share is anticipated to be .2035247 of a
share of Jacor common stock (the "Warrant Consideration", and together with the
Cash Consideration, the "Merger Consideration"). The Jacor Warrants will have an
exercise price of $28.00 per full share of Jacor common stock, except that such
exercise price will be reduced to $26.00 per full share of Jacor common stock if
the Merger is not consummated by October 1, 1996. At the time of the exercise of
any Jacor Warrant the holder of such Jacor Warrant will receive, in lieu of any
fractional share of Jacor common stock, an amount in cash equal to the closing
price for one share of Jacor common stock on the trading day immediately
preceding the date the Jacor Warrant is presented for exercise, multiplied by
such fraction. Based on the number of shares of Citicasters Common Stock
outstanding on the date hereof, the Cash Consideration payable in the Merger is
approximately $624.2 million. See "THE MERGER."
SEE "RISK FACTORS" AT PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY BOTH THE JACOR SHAREHOLDERS AND CITICASTERS SHAREHOLDERS.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Proxy Statement/Information Statement/Prospectus is June
24, 1996. This Proxy Statement/Information Statement/Prospectus and the
accompanying Proxy for Jacor shareholders are first being mailed to the
shareholders of Jacor and Citicasters on or about June 24, 1996. This Proxy
Statement/Information Statement/ Prospectus constitutes notice to Citicasters
shareholders of corporate action by shareholders without a meeting as required
by Section 607.0704 of the Florida Business Corporation Act (the "FBCA").
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/INFORMATION
STATEMENT/PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT/
INFORMATION STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROXY
STATEMENT/INFORMATION STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN
ANY JURISDICTION, TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT/INFORMATION
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES PURSUANT TO THIS PROXY
STATEMENT/INFORMATION STATEMENT/PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH
HEREIN SINCE THE DATE OF THIS PROXY STATEMENT/ INFORMATION STATEMENT/PROSPECTUS.
AVAILABLE INFORMATION
Each of Jacor and Citicasters is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
accordingly files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed with the
Commission are available for inspection and copying at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and at 7 World Trade Center, 13th Floor, New York, New York
10048. Copies of such documents may also be obtained from the Public Reference
Room of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates.
This Proxy Statement/Information Statement/Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement, including any amendments, schedules and
exhibits thereto, is available for inspection and copying as set forth above.
Statements contained in this Proxy Statement/Information Statement/Prospectus as
to the contents of any contract or other document referred to herein include all
material terms of such contracts or other documents but are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
Each of Jacor Common Stock (as defined herein) and Citicasters Common Stock
is traded on the Nasdaq National Market. Reports and other information
concerning Jacor and Citicasters are available for inspection and copying at the
offices of The Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.C.
20006-1506. Application will be made to list on the Nasdaq National Market the
Jacor Warrants to be issued in connection with the Merger. Following the Merger,
Citicasters will become a wholly owned subsidiary of Jacor, and there will be no
public trading of Citicasters Common Stock. Accordingly, registration of
Citicasters Common Stock under the Exchange Act will be terminated upon
application of Citicasters to the Commission when the Merger is consummated, and
Citicasters will no longer be subject to the reporting requirements of the
Exchange Act.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Jacor with the Commission under
the Exchange Act are incorporated herein by reference:
(a) Jacor's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended;
(b) Jacor's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996;
(c) Jacor's Current Reports on Form 8-K dated February 14, 1996,
February 27, 1996, March 6, 1996, as amended, and March 27, 1996, as
amended; and
(d) Jacor's Form 8-A Registration Statement dated January 12, 1993.
The following documents previously filed by Citicasters with the Commission
under the Exchange Act are incorporated herein by reference:
(a) Citicasters' Annual Report on Form 10-K for the year ended December
31, 1995, as amended;
(b) Citicasters' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, as amended; and
(c) Citicasters' Current Report on Form 8-K dated February 14, 1996.
All documents filed by Jacor and/or Citicasters pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement/Information Statement/Prospectus and (a) in the case of Jacor, the
date of the Jacor Annual Meeting, and (b) in the case of Citicasters, prior to
the effective time of the Merger, shall be deemed to be incorporated by
reference into this Proxy Statement/Information Statement/Prospectus and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that is or is deemed to be incorporated by
reference herein) modifies or supersedes such previous statement. Any statement
so modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
All information contained or incorporated by reference in this Proxy
Statement/Information Statement/ Prospectus relating to Jacor has been supplied
by Jacor and all such information relating to Citicasters has been supplied by
Citicasters, and neither Jacor nor Citicasters assumes any responsibility for
the accuracy or completeness of the information provided by the other.
THIS PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE HEREIN) ARE AVAILABLE, WITHOUT CHARGE,
UPON ORAL OR WRITTEN REQUEST BY ANY PERSON TO WHOM THIS PROXY
STATEMENT/INFORMATION STATEMENT/PROSPECTUS HAS BEEN DELIVERED. IN THE CASE OF
DOCUMENTS RELATING TO JACOR, SUCH REQUEST SHOULD BE DIRECTED TO JON M. BERRY,
SENIOR VICE PRESIDENT AND TREASURER, JACOR COMMUNICATIONS, INC., 1300 PNC
CENTER, 201 EAST FIFTH STREET, CINCINNATI, OHIO 45202, TELEPHONE NUMBER (513)
621-1300. IN THE CASE OF DOCUMENTS RELATING TO CITICASTERS, SUCH REQUEST SHOULD
BE DIRECTED TO CITICASTERS, ONE EAST FOURTH STREET, CINCINNATI, OHIO 45202,
ATTENTION: GENERAL COUNSEL, TELEPHONE NUMBER (513) 562-8019. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS PRIOR TO THE JACOR ANNUAL MEETING, ANY SUCH
REQUEST BY JACOR SHAREHOLDERS SHOULD BE MADE ON OR BEFORE JULY 18, 1996.
3
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TABLE OF CONTENTS
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AVAILABLE INFORMATION...................................................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 3
SUMMARY OF PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS................................................ 7
Parties to the Merger.................................................................................. 7
Jacor Annual Meeting................................................................................... 7
Citicasters Action by Written Consent.................................................................. 8
The Merger............................................................................................. 9
Merger Consideration................................................................................... 9
Reasons for the Merger................................................................................. 10
Opinion of Citicasters Financial Advisor............................................................... 10
Termination of the Merger Agreement; Termination Fees.................................................. 10
Financing Arrangements................................................................................. 10
Interests of Certain Persons in the Merger............................................................. 11
Regulatory Matters..................................................................................... 11
Nasdaq Listing......................................................................................... 11
Certain Federal Income Tax Consequences................................................................ 12
Accounting Treatment................................................................................... 12
No Appraisal or Dissenters' Rights..................................................................... 12
Noble Acquisition...................................................................................... 12
Recent Developments.................................................................................... 12
Summary Pro Forma Financial Information................................................................ 13
Summary Historical Financial Data...................................................................... 14
Comparative Per Share Data............................................................................. 15
Comparative Market Prices and Dividends................................................................ 16
RISK FACTORS............................................................................................... 17
JACOR ANNUAL MEETING; CITICASTERS ACTION BY WRITTEN CONSENT................................................ 20
Jacor Annual Meeting................................................................................... 20
Citicasters Action by Written Consent.................................................................. 21
THE MERGER................................................................................................. 22
Background of and Reasons for the Merger--Jacor........................................................ 22
Background of and Reasons for the Merger--Citicasters.................................................. 25
Opinion of Citicasters Financial Advisor............................................................... 29
Conversion of Citicasters Common Stock for the Merger Consideration.................................... 33
Exchange of Citicasters Certificates in the Merger..................................................... 33
Certain Terms of the Merger Agreement and Related Agreements........................................... 34
Description of Jacor Warrants.......................................................................... 38
Financing Arrangements................................................................................. 40
Interests of Certain Persons in the Merger............................................................. 45
Regulatory Matters..................................................................................... 46
Nasdaq Listing......................................................................................... 51
Certain Federal Income Tax Consequences................................................................ 51
Accounting Treatment................................................................................... 53
Federal Securities Law Consequences.................................................................... 53
No Appraisal or Dissenters' Rights..................................................................... 53
THE NOBLE ACQUISITION...................................................................................... 54
UNAUDITED PRO FORMA FINANCIAL INFORMATION.................................................................. 55
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SELECTED HISTORICAL FINANCIAL DATA......................................................................... 66
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION................................................ 72
BUSINESS OF JACOR.......................................................................................... 72
BUSINESS OF CITICASTERS.................................................................................... 74
BUSINESS OF NEW JACOR...................................................................................... 74
DESCRIPTION OF CAPITAL STOCK............................................................................... 74
Common Stock........................................................................................... 75
Class A and Class B Preferred Stock.................................................................... 75
1993 Warrants.......................................................................................... 75
Jacor Warrants......................................................................................... 76
COMPARISON OF CORPORATE CHARTERS AND RIGHTS OF SECURITY HOLDERS............................................ 76
Comparison of Present Jacor Articles and New Jacor Certificate......................................... 76
Comparison of Jacor Shareholders' Rights Under Ohio Law and Delaware Law............................... 79
Comparison of New Jacor Certificate and Citicasters Articles........................................... 83
Comparison of Shareholders' Rights under Florida Law and Delaware Law.................................. 83
PROPOSAL TO APPROVE THE REINCORPORATION OF JACOR........................................................... 85
PROPOSAL TO APPROVE ISSUANCE OF JACOR WARRANTS AND SHARES OF JACOR COMMON STOCK ISSUABLE UPON EXERCISE
THEREOF.................................................................................................. 87
ELECTION OF JACOR DIRECTORS................................................................................ 88
Information Concerning Nominees........................................................................ 88
Jacor Board of Directors, Its Committees, Meetings and Functions....................................... 90
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF JACOR.................................... 91
Beneficial Owners and Management....................................................................... 91
Reports of Changes in Beneficial Ownership............................................................. 92
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF CITICASTERS.............................. 93
JACOR EXECUTIVE COMPENSATION............................................................................... 94
Summary Compensation Table............................................................................. 94
Option Grants in Last Fiscal Year...................................................................... 95
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values...................... 96
Summary of Benefits Under the 1995 Employee Stock Purchase Plan........................................ 96
Compensation Committee Report.......................................................................... 97
Stock Performance...................................................................................... 98
Director Compensation.................................................................................. 99
Compensation Committee Interlocks and Insider Participation............................................ 99
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................................................. 99
INDEPENDENT PUBLIC ACCOUNTANTS............................................................................. 100
SHAREHOLDER PROPOSALS FOR 1997 JACOR ANNUAL MEETING........................................................ 100
ANNUAL REPORT.............................................................................................. 100
EXPERTS.................................................................................................... 100
LEGAL MATTERS.............................................................................................. 101
OTHER MATTERS.............................................................................................. 101
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INDEX OF DEFINED TERMS..................................................................................... 102
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ANNEX I AGREEMENT AND PLAN OF MERGER DATED AS OF FEBRUARY 12, 1996 AMONG
JACOR, ACQUISITION CORP. AND CITICASTERS........................... A-I-1
ANNEX II JACOR SHAREHOLDERS AGREEMENT DATED FEBRUARY 12, 1996 BETWEEN
ZELL/CHILMARK AND CITICASTERS...................................... A-II-1
ANNEX III STOCKHOLDERS AGREEMENT DATED FEBRUARY 12, 1996 AMONG THE CONSENTING
STOCKHOLDERS, JACOR AND ACQUISITION CORP........................... A-III-1
ANNEX IV FORM OF WARRANT AGREEMENT BETWEEN JACOR AND KEYCORP SHAREHOLDER
SERVICES, INC. .................................................... A-IV-1
ANNEX V FAIRNESS OPINION OF SALOMON BROTHERS INC............................... A-V-1
ANNEX VI LETTER OF CREDIT ESCROW AGREEMENT DATED MARCH 13, 1996 AMONG JACOR,
CITICASTERS AND PNC BANK........................................... A-VI-1
ANNEX VII FORM OF PLAN AND AGREEMENT OF MERGER PROVIDING FOR REINCORPORATION OF
JACOR AS A DELAWARE CORPORATION (INCLUDING THE FORMS OF NEW JACOR'S
CERTIFICATE OF INCORPORATION AND BYLAWS)........................... A-VII-1
ANNEX VIII CERTIFICATES OF MERGER FOR REINCORPORATION............................ A-VIII-1
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SUMMARY OF PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS
THE FOLLOWING IS A SUMMARY OF CERTAIN MATTERS DISCUSSED ELSEWHERE IN THIS
PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS. THIS SUMMARY SETS FORTH ALL
MATERIAL ELEMENTS OF SUCH MATTERS BUT DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION
APPEARING IN THIS PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS AND THE
ANNEXES HERETO. SHAREHOLDERS OF JACOR AND CITICASTERS ARE URGED TO READ THIS
PROXY STATEMENT/INFORMATION STATEMENT/PROSPECTUS AND THE ANNEXES HERETO IN THEIR
ENTIRETY. UNLESS OTHERWISE INDICATED OR APPARENT FROM THE CONTEXT IN WHICH SUCH
TERMS ARE USED, ALL REFERENCES HEREIN TO "JACOR COMMON STOCK" MEAN (I) PRIOR TO
THE REINCORPORATION, THE COMMON STOCK, NO PAR VALUE, OF JACOR COMMUNICATIONS,
INC. AND (II) AFTER THE REINCORPORATION, THE COMMON STOCK, $.01 PAR VALUE OF NEW
JACOR. SEE "PROPOSAL TO APPROVE THE REINCORPORATION OF JACOR."
PARTIES TO THE MERGER
JACOR. Jacor is a holding company engaged primarily in the radio
broadcasting business. As of March 1, 1996, Jacor entities owned and operated 20
radio stations located in six markets: Atlanta, San Diego, Tampa, Denver,
Cincinnati and Jacksonville. Jacor has time brokerage agreements to operate one
station in Atlanta, three stations in St. Louis and three stations in Toledo.
Jacor also has joint sales agreements to sell advertising time for three
stations in Cincinnati and one station in Denver. The mailing address and
telephone number of the principal executive offices of Jacor are 1300 PNC
Center, 201 East Fifth Street, Cincinnati, Ohio 45202, (513) 621-1300. See
"BUSINESS OF JACOR."
ACQUISITION CORP. JCAC is a wholly owned subsidiary of Jacor organized to
effect the Merger. The mailing address and telephone number of the principal
executive offices of JCAC are 1300 PNC Center, 201 East Fifth Street,
Cincinnati, Ohio 45202, (513) 621-1300.
CITICASTERS. Citicasters owns and operates nineteen radio stations located
in eight markets: Atlanta, Phoenix, Tampa, Portland, Kansas City, Cincinnati,
Sacramento and Columbus, and two television stations, one located in Tampa and
one in Cincinnati. In June 1994, the name of Citicasters was changed from Great
American Communications Company to Citicasters Inc. Citicasters' operations are
conducted through its principal subsidiary, Citicasters Co., an Ohio corporation
formerly known as Great American Television and Radio Company, Inc. The mailing
address and telephone number of the principal executive offices of Citicasters
are One East Fourth Street, Cincinnati, Ohio 45202, (513) 562-8000. See
"BUSINESS OF CITICASTERS."
NEW JACOR. New Jacor, a Delaware corporation, is a wholly owned subsidiary
of Jacor incorporated in March 1996 for the sole purpose of effecting the
Reincorporation. New Jacor has not conducted any business activities to date.
Upon consummation of the Reincorporation, New Jacor will be the legal successor
to Jacor and, as such, will assume all of Jacor's rights and obligations under
the Merger Agreement. Following the consummation of the Merger, Citicasters will
become a wholly owned subsidiary of New Jacor. Accordingly, the business of New
Jacor will be the business currently conducted by Jacor and Citicasters. The
mailing address and telephone number of the principal executive offices of New
Jacor are 1300 PNC Center, 201 East Fifth Street, Cincinnati, Ohio 45202, (513)
621-1300. See "BUSINESS OF NEW JACOR."
JACOR ANNUAL MEETING
The Jacor Annual Meeting will be held on Tuesday, July 23, 1996, at 10:30
a.m. local time, in the Fifth Third Theatre at the Aronoff Center for the Arts,
located at the corner of East Seventh Street and Main Street, Cincinnati, Ohio,
and any adjournment or postponement thereof. The holders of record at the close
of business on May 31, 1996 (the "Jacor Record Date") of shares of Jacor Common
Stock are entitled to notice of and to vote at the Jacor Annual Meeting. At the
Jacor Annual Meeting, Jacor shareholders will be asked to consider and vote on
the following: (i) to approve the reincorporation of Jacor under the laws of the
State of Delaware; (ii) to approve the issuance of the Jacor Warrants in
connection with the Merger and the issuance of the shares of Jacor Common Stock
issuable upon the exercise of any such Jacor Warrants; (iii) the election of
seven directors to serve on the Jacor Board until the next annual meeting or
until their successors are elected and qualified; and (iv) such other matters as
may properly be presented for the consideration of Jacor shareholders. None of
the proposals are dependent upon the adoption of any other proposal. Neither
Ohio law nor Delaware law requires the approval of the Merger Agreement by the
Jacor shareholders, and no such approval will be sought.
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Each share of Jacor Common Stock will be entitled to one vote on the
proposals described above. The affirmative vote of two-thirds of the outstanding
shares of Jacor Common Stock is required to approve the Reincorporation. The
affirmative vote of a majority of the votes cast at the Jacor Annual Meeting is
required to approve the issuance of the Jacor Warrants and the underlying Jacor
Common Stock. In the election of directors, those nominees receiving the
greatest number of votes will be elected as directors.
In conjunction with the execution of the Merger Agreement (a copy of which
is attached hereto as Annex I), Zell/Chilmark Fund L.P. ("Zell/Chilmark"), the
holder of approximately 69% of the outstanding Jacor Common Stock, as of the
Jacor Record Date, entered into the Jacor Shareholders Agreement dated February
12, 1996 between Citicasters and Zell/Chilmark (the "Jacor Shareholders
Agreement"). As required by the Jacor Shareholders Agreement, Zell/Chilmark
granted Citicasters an irrevocable proxy pursuant to which all of the shares of
Jacor Common Stock owned by Zell/Chilmark will be voted in favor of the issuance
of the Jacor Warrants as are necessary for the payment of the Merger
Consideration, and the shares of Jacor Common Stock issuable upon the exercise
thereof. A copy of the Jacor Shareholders Agreement is attached hereto as Annex
II. Zell/Chilmark has also informed Jacor that it intends to vote all of its
shares of Jacor Common Stock in favor of the Reincorporation and FOR the
election of the seven nominees to serve as directors on the Jacor Board. See
"JACOR ANNUAL MEETING; CITICASTERS ACTION BY WRITTEN CONSENT."
CITICASTERS ACTION BY WRITTEN CONSENT
On February 12, 1996, the Citicasters Board unanimously adopted the Merger
Agreement and determined that the terms of the Merger are fair to, and in the
best interests of, the holders of Citicasters Common Stock. Under the FBCA, the
affirmative vote of the holders of a majority of the outstanding Citicasters
Common Stock is required to approve the Merger Agreement. As of June 12, 1996
(the "Citicasters Record Date"), there were issued and outstanding 20,007,522
shares of Citicasters Common Stock. Holders of record of Citicasters Common
Stock at the close of business on the Citicasters Record Date are entitled to
one vote per share of Citicasters Common Stock held on all matters submitted to
a vote of shareholders.
In conjunction with Citicasters' execution of the Merger Agreement, Jacor,
JCAC and the holders of a majority of the outstanding shares of Citicasters
Common Stock: Great American Insurance Company, American Financial Corporation,
American Financial Enterprises, Inc., Carl H. Lindner, The Carl H. Lindner
Foundation, a charitable foundation, and S. Craig Lindner (collectively referred
to herein as the "Consenting Stockholders"), entered into the Stockholders
Agreement dated February 12, 1996 (the "Stockholders Agreement"). The
Stockholders Agreement provides, among other things, that the Consenting
Stockholders will not solicit other proposals for a Competing Transaction (as
defined in the Stockholders Agreement) and will take action by written consent
to approve the Merger Agreement. Certain of the Consenting Stockholders agreed
further to make certain payments to Jacor in the event the Merger Agreement was
terminated under certain circumstances and another transaction involving
Citicasters is consummated within eighteen months of such termination that
results in the Consenting Stockholders' receipt of certain payments in respect
of their shares of Citicasters Common Stock.
As required by the Stockholders Agreement and by the Merger Agreement, on
March 13, 1996, each Consenting Stockholder executed and delivered to Jacor his
or its written consent approving the Merger Agreement. On June 19, 1996, the
Consenting Stockholders delivered to Jacor new written consents to further
approve the Merger Agreement. Jacor subsequently delivered all such written
consents to Citicasters on the date hereof. Such written consents are
irrevocable and are sufficient under the FBCA, upon receipt by Citicasters, to
approve the Merger Agreement. Therefore, no further action by the shareholders
of Citicasters is necessary to approve the Merger Agreement or consummate the
Merger and no such approval will be sought. ACCORDINGLY, CITICASTERS IS NOT
ASKING ANY CITICASTERS SHAREHOLDER FOR A PROXY AND CITICASTERS SHAREHOLDERS ARE
REQUESTED NOT TO SEND A PROXY. NO MEETING OF CITICASTERS SHAREHOLDERS WILL BE
HELD TO CONSIDER APPROVAL OF THE MERGER AGREEMENT. A copy of the Stockholders
Agreement is attached hereto as Annex III. See "JACOR ANNUAL MEETING;
CITICASTERS ACTION BY WRITTEN CONSENT."
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THE MERGER
The Merger Agreement has been approved by the Jacor Board and the Merger
does not require the approval of the Jacor shareholders under either Ohio or
Delaware law. However, the rules of the Nasdaq National Market require
shareholder approval in connection with the acquisition of the stock of another
company where the potential issuance of common stock, or securities exercisable
for common stock, has or will have upon issuance voting power equal to or in
excess of 20% of the voting power outstanding before the issuance of such stock
or securities. At the time the Merger Agreement was executed, the approval by
the holders of a majority of the votes cast in person or by proxy at the Jacor
Annual Meeting on the proposal to issue the Jacor Warrants and the underlying
shares of Jacor Common Stock in the Merger would have been required by such
rules because the shares of Jacor Common Stock issuable upon exercise of all the
Jacor Warrants would have exceeded 20% of the shares of Jacor Common Stock then
outstanding.
As a result of the sale of shares of Jacor Common Stock in the 1996 Stock
Offering (as defined herein), the issuance of the Jacor Warrants will not equal
or exceed the 20% threshold and Jacor believes that the Nasdaq National Market
rules no longer require shareholder approval of the issuance of the Jacor
Warrants. Nonetheless, Jacor is seeking shareholder approval of the issuance of
the Jacor Warrants at the Jacor Annual Meeting to ensure compliance with those
rules in the event such rules would be deemed applicable. As required by the
Jacor Shareholders Agreement, all shares of Jacor Common Stock held by
Zell/Chilmark will be voted in favor of this proposal and, upon the taking of
such action, no additional corporate action by either Jacor or the Jacor
shareholders will be necessary to effect the Merger.
If the conditions to the Merger as set forth in the Merger Agreement are
satisfied or waived (where permissible under the terms of the Merger Agreement
or under applicable law), the Merger will be consummated and will become
effective at the time at which the Articles of Merger are accepted for filing by
the Department of State of Florida (the time of such filing being the "Effective
Time" and the day of such filing being the "Effective Date"). See "THE
MERGER--Certain Terms of the Merger Agreement and Related Agreements." It is
expected that the Effective Time will promptly follow completion of the Jacor
Annual Meeting, the Reincorporation and the receipt of all required regulatory
approvals. See "THE MERGER--Regulatory Matters." At the Effective Time, JCAC
will be merged with and into Citicasters and Citicasters will thereby become a
wholly-owned subsidiary of New Jacor, as the successor to Jacor upon the
consummation of the Reincorporation.
MERGER CONSIDERATION
In the Merger, each issued and outstanding share of Citicasters Common Stock
at the Effective Time will be converted into the right to receive the Merger
Consideration. The Merger Consideration will consist of (i) $29.50 in cash,
plus, in the event that the consummation of the Merger does not occur prior to
October 1, 1996, for each full calendar month ending prior to the Closing
commencing with October 1996, an additional amount of $.22125 in cash; plus (ii)
one Jacor Warrant to acquire a fractional share of Jacor Common Stock for each
share of Citicasters Common Stock converted in the Merger (which fractional
share is anticipated to be .2035247 of a share of Jacor Common Stock). See "THE
MERGER--Conversion of Citicasters Common Stock for the Merger Consideration" and
"--Description of Jacor Warrants."
The Jacor Warrants will have an exercise price of $28.00 per full share of
Jacor Common Stock, except that such exercise price will be reduced to $26.00
per full share of Jacor Common Stock if the Merger is not consummated by October
1, 1996. The Jacor Warrants are to be issued under the Warrant Agreement, to be
dated as of the Effective Date between Jacor and KeyCorp Shareholder Services
Corp., as Warrant Agent (the "Warrant Agent"). At the time of the exercise of
any Jacor Warrant the holder of such Jacor Warrant will receive, in lieu of any
fractional share of Jacor Common Stock, an amount in cash equal to the closing
price for one share of Jacor Common Stock on the trading day immediately
preceding the date the Jacor Warrant is presented for exercise, multiplied by
such fraction. Each Jacor Warrant may be exercised until 5:00 p.m., Cincinnati
time, on the fifth anniversary of the Effective Date. The form of the Warrant
Agreement is attached hereto as Annex IV. See "THE MERGER--Description of Jacor
Warrants."
AT THE EFFECTIVE TIME, ALL OUTSTANDING SHARES OF CITICASTERS COMMON STOCK
WILL CEASE TO BE OUTSTANDING AND CERTIFICATES REPRESENTING SHARES OF CITICASTERS
COMMON STOCK WILL REPRESENT THE RIGHT TO RECEIVE THE MERGER
9
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CONSIDERATION. AS SOON AS POSSIBLE AFTER THE EFFECTIVE TIME, SECURITIES TRANSFER
COMPANY (THE "EXCHANGE AGENT") WILL MAIL TRANSMITTAL INSTRUCTIONS TO EACH HOLDER
OF RECORD OF SHARES OF CITICASTERS COMMON STOCK AT THE EFFECTIVE TIME, ADVISING
THEM OF THE PROCEDURE FOR SURRENDERING CERTIFICATES. HOLDERS OF CITICASTERS
COMMON STOCK SHOULD NOT SEND IN ANY STOCK CERTIFICATES AT THIS TIME.
REASONS FOR THE MERGER
The Jacor Board and the Citicasters Board have each unanimously approved the
Merger Agreement and concluded that its terms are fair to and in the best
interests of their respective shareholders. Jacor believes that the Merger
offers significant strategic and financial benefits to its shareholders by
creating a larger, financially stronger company, and which will allow Jacor to
take advantage of complementary operational functions and reduce administrative
costs. For a further description of the negotiations leading up to the execution
of the Merger Agreement and related matters and the reasons for the Merger, see
"THE MERGER--Background of and Reasons for the Merger--Jacor," and
"--Citicasters."
OPINION OF CITICASTERS FINANCIAL ADVISOR
Citicasters has retained Salomon Brothers Inc ("Salomon Brothers") as its
financial advisor in connection with the Merger. Salomon Brothers has delivered
the Salomon Opinion (as defined herein) to the Citicasters Board, stating that,
as of the date of such opinion, the consideration to be paid by Jacor to holders
of Citicasters Common Stock in the Merger is fair to such holders from a
financial point of view. The Salomon Opinion was based upon the procedures and
subject to the assumptions described in the Salomon Opinion. A copy of the
Salomon Opinion is attached hereto as Annex V and should be read by Citicasters
shareholders carefully and in its entirety. See "THE MERGER--Opinion of
Citicasters Financial Advisor."
TERMINATION OF THE MERGER AGREEMENT; TERMINATION FEES
The Merger Agreement may be terminated before the consummation of the Merger
by either Jacor or Citicasters under various circumstances, including the
failure to consummate the Merger on or before May 31, 1997. If the Merger
Agreement is terminated upon the occurrence of certain triggering events,
Citicasters may draw upon an irrevocable, direct pay letter of credit in the
amount of $75.0 million obtained by Jacor and issued to PNC Bank, Ohio, N.A. as
escrow agent ("Escrow Agent") on behalf of Citicasters, pursuant to an Escrow
Agreement dated March 13, 1996 among Jacor, Citicasters and the Escrow Agent
(the "Escrow Agreement," a copy of which is attached hereto as Annex VI). Except
in certain circumstances, the right to terminate the Merger Agreement and
receive a maximum of $75.0 million pursuant to a draw on such letter of credit
is Citicasters' exclusive remedy upon the occurrence of a triggering event. See
"THE MERGER--Certain Terms of the Merger Agreement and Related
Agreements--Termination; Termination Fees."
FINANCING ARRANGEMENTS
Jacor expects that the funds necessary to pay the Cash Consideration will be
obtained from (i) the sale of 11,250,000 shares of Jacor Common Stock (the "1996
Stock Offering"), (ii) the issuance and sale of $226.0 million aggregate
principal amount at maturity of the Liquid Yield Option-TM- Notes ("LYONs") due
2011 (the "LYONs-TM- Offering) and (iii) the sale by JCAC of $100.0 million
aggregate principal amount of JCAC's Senior Subordinated Notes ("Notes") due
2006 (the "Notes Offering"), together with anticipated initial borrowings by
JCAC under a new credit facility with an available principal amount of $600.0
million (the "New Credit Facility"). Aggregate net proceeds of approximately
$497.8 million from the 1996 Stock Offering, the LYONs Offering and the Notes
Offering (collectively, the "Offerings") were obtained on June 12, 1996 at the
closings of the Offerings. The execution of the credit agreement creating the
New Credit Facility occurred simultaneously with those closings. A condition to
the initial borrowing under the New Credit Facility is the consummation of the
Merger prior to January 1, 1997. In addition, the Notes are subject to
repurchase by Jacor if the Merger is not consummated prior to January 1, 1997.
See "RISK FACTORS-- Pending Acquisitions" and "THE MERGER--Financing
Arrangements."
The 1996 Stock Offering constituted an event that permitted Jacor to convert
the warrants to purchase 2,014,233 shares of Jacor Common Stock issued by Jacor
to its shareholders in 1993 (the "1993 Warrants"), 1,808,609 of which were
outstanding as of May 31, 1996, into the right to receive fair market value (as
- -TM-Trademark of Merrill Lynch & Co., Inc.
10
<PAGE>
defined in the 1993 Warrants). Jacor so converted the 1993 Warrants as of the
closing of the 1996 Stock Offering on June 12, 1996 and the fair market value of
each 1993 Warrant was fixed at $19.70. Prior to such conversion, approximately
1,512,756 such 1993 Warrants were exercised to acquire shares of Jacor Common
Stock in lieu of accepting the fair market value thereof, including the exercise
by Zell/Chilmark of 629,117 such warrants. See "DESCRIPTION OF CAPITAL
STOCK--1993 Warrants."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
EMPLOYMENT CONTINUATION AGREEMENTS. Citicasters has entered into employment
continuation agreements with an executive officer and certain senior managers of
Citicasters, which agreements become operative upon a "change in control" of
Citicasters, which, as defined therein, includes the Merger. For a description
of these agreements, see "THE MERGER--Interests of Certain Persons in the
Merger."
CITICASTERS STOCK OPTIONS. Pursuant to the Merger Agreement, Citicasters
will use its reasonable best efforts to cause each outstanding Citicasters stock
option to become fully vested and to obtain from each option holder an agreement
that Jacor shall not be obligated to issue Citicasters Common Stock or Jacor
Common Stock upon exercise of such options. Instead, Jacor shall be obligated to
pay or issue to such option holder the Merger Consideration (less the exercise
price of such stock option) as though such stock options had been exercised
immediately prior to the Effective Time and each share of Citicasters Common
Stock that would have been issued pursuant to such exercise had been exchanged
in the Merger for the Merger Consideration. See "THE MERGER--Interests of
Certain Persons in the Merger."
As a result of the foregoing, each director of Citicasters (except John P.
Zanotti) shall receive Cash Consideration of $437,325 and 4,885 Jacor Warrants.
The executive officers of Citicasters, Messrs. John P. Zanotti, Gregory C.
Thomas and Samuel J. Simon, shall receive Cash Consideration of $12,493,125,
$2,206,913 and $1,086,019, respectively, and 114,483, 20,607 and 10,303 Jacor
Warrants, respectively. See "The Merger -- Interests of Certain Persons in the
Merger."
INDEMNIFICATION. The Merger Agreement requires Jacor to continue existing
indemnification rights in favor of directors, officers, employees and agents of
Citicasters and its subsidiaries for six years following the Effective Time. See
"THE MERGER--Interests of Certain Persons in the Merger."
REGISTRATION RIGHTS. Pursuant to the Stockholders Agreement, Jacor has
agreed to enter into an agreement prior to the closing of the Merger providing
for the shelf registration of resale of the Jacor Warrants and the underlying
shares of Jacor Common Stock to be issued to the Consenting Stockholders as part
of the Merger Consideration. Such agreement is anticipated to have terms and
conditions customary for transactions of such nature.
FEES. Equity Group Investments, Inc., an affiliate of Zell/Chilmark, has
provided Jacor with certain investment banking, financial advisory and other
similar services in connection with the Existing Credit Facility (as defined
herein), the Financing and the Acquisitions. In consideration for such services,
Jacor paid Equity Group Investments, Inc. a fee of approximately $3.4 million
upon the consummation of the Offerings. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."
REGULATORY MATTERS
The receipt of certain federal and state governmental or regulatory
approvals are required in order to consummate the Merger, including approvals or
waivers from the Federal Communications Commission ("FCC") and the expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Jacor and
Citicasters have agreed in the Merger Agreement to use their reasonable best
efforts to obtain such approvals or waivers, but there can be no assurance as to
when or if such approvals or waivers will be obtained such that the Merger may
be consummated. See "RISK FACTORS--Pending Acquisitions" and "THE
MERGER--Regulatory Matters."
NASDAQ LISTING
Under the Merger Agreement, Jacor has agreed to use its reasonable best
efforts to cause the Jacor Warrants to be listed for trading on the Nasdaq
National Market. See "THE MERGER--Nasdaq Listing."
11
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Assuming that a holder of Citicasters Common Stock holds his or her shares
as a capital asset, the holder will recognize capital gain or loss equal to the
difference between (i) the cash and the fair market value of the Jacor Warrant
received and (ii) the holder's basis in Citicasters Common Stock given up in the
exchange. Under the federal income tax backup withholding rules, unless an
exemption applies, the Exchange Agent will be required to withhold, and will
withhold, 31% of all payments to which a holder or other payee is entitled
pursuant to the Merger, unless the holder or other payee provides a tax
identification number (social security number, in the case of an individual, or
employer identification number in the case of other Citicasters shareholders)
and certifies that such number is correct. Any amounts withheld will be allowed
as a credit against the holder's Federal income tax liability.
ALL CITICASTERS SHAREHOLDERS SHOULD READ CAREFULLY THE DISCUSSION IN THE
"THE MERGER--CERTAIN FEDERAL INCOME TAX CONSEQUENCES" AND ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS AS TO SPECIFIC CONSEQUENCES TO THEM OF THE MERGER UNDER
FEDERAL, STATE, LOCAL OR ANY OTHER APPLICABLE TAX LAWS.
ACCOUNTING TREATMENT
The Merger will be accounted for as a "purchase," as such term is used under
generally accepted accounting principles. See "THE MERGER--Accounting
Treatment."
NO APPRAISAL OR DISSENTERS' RIGHTS
Under the FBCA, because Citicasters Common Stock was registered on the
Nasdaq National Market as of the Citicasters Record Date, holders of shares of
Citicasters Common Stock will not have appraisal rights or rights as dissenting
shareholders in the Merger. Under both Ohio law and Delaware law, the Merger
does not require the approval of the Jacor shareholders and, therefore, holders
of shares of Jacor Common Stock will not have appraisal rights or rights as
dissenting shareholders with respect to the Merger. See "THE MERGER--No
Appraisal or Dissenters' Rights."
NOBLE ACQUISITION
In February 1996, Jacor entered into an agreement to acquire Noble Broadcast
Group, Inc. ("Noble"), which owns 10 radio stations serving Denver, St. Louis
and Toledo. Pending the closing of this transaction (the "Noble Acquisition"),
Jacor and Noble have entered into time brokerage agreements with respect to
Noble's radio stations in St. Louis and Toledo. Jacor also acquired from Noble
the right to provide programming to and sell air time for one AM and one FM
station serving the San Diego market. The aggregate value of the Noble
Acquisition, when fully consummated, is estimated to be approximately $152.0
million, of which approximately $139.5 million has already been paid. In order
to fund the Noble Acquisition, refinance outstanding debt of $45.5 million (as
of February 21, 1996), and pay related costs and expenses of approximately $5.0
million, Jacor entered into the Existing Credit Facility (as defined herein) in
the principal amount of $300.0 million and immediately borrowed $190.0 million
thereunder. Such borrowing was repaid in full with the proceeds of the Offerings
on June 12, 1996. See "THE NOBLE ACQUISITION."
RECENT DEVELOPMENTS
Subsequent to Jacor's entering into the agreements to acquire Citicasters
and Noble, Jacor entered into agreements to acquire two radio stations in
Venice, Florida for a purchase price of approximately $4.4 million, two radio
stations in Toledo, Ohio for a purchase price of $13.0 million and three radio
stations in Lexington, Kentucky for a purchase price of approximately $14.0
million. In addition, Jacor has entered into two non-binding letters of intent
pursuant to which Jacor and the prospective sellers have agreed to negotiate
exclusively the terms and conditions of definitive acquisition agreements. If
such negotiations and transactions are successfully completed, Jacor would
acquire an additional ten radio stations for an aggregate purchase price of
approximately $52.5 million. There can be no assurance that Jacor will
successfully complete any such acquisitions or what the consequences thereof
would be. See "BUSINESS OF JACOR."
12
<PAGE>
SUMMARY PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
The following sets forth summary unaudited pro forma combined financial
information derived from the Unaudited Pro Forma Financial Information included
elsewhere in this Proxy Statement/Information Statement/Prospectus. The
unaudited pro forma condensed consolidated statements of operations for the year
ended December 31, 1995 and for the latest twelve months ended March 31, 1996
give effect to (i) Jacor's 1995 completed radio station acquisitions and
February 1996 radio station dispositions, (ii) Noble's completed 1995 radio
station acquisitions and dispositions, (iii) Citicasters' completed 1995 and
January 1996 radio station acquisitions, and (iv) the Merger and the Noble
Acquisition (collectively, the "Acquisitions") and the 1996 Stock Offering, the
LYONs Offering, the Notes Offering and the New Credit Facility (collectively,
the "Financing"). The pro forma condensed consolidated balance sheet as of March
31, 1996 has been prepared as if the Acquisitions and the Financing had occurred
on March 31, 1996.
The Summary Unaudited Pro Forma Financial Information does not purport to
present the actual financial position or results of operations of the Company
had the transactions and events assumed therein in fact occurred on the dates
specified, nor are they necessarily indicative of the results of operations that
may be achieved in the future. The Summary Unaudited Pro Forma Financial
Information is based on certain assumptions and adjustments described in the
notes to the Unaudited Pro Forma Financial Information and should be read in
conjunction therewith. See Consolidated Financial Statements and the Notes
thereto for each of Jacor, Citicasters and Noble, incorporated herein by
reference.
<TABLE>
<CAPTION>
LATEST TWELVE
YEAR ENDED MONTHS ENDED
DECEMBER 31, MARCH 31,
1995 1996
------------ --------------
<S> <C> <C>
OPERATING STATEMENT DATA:
Net revenue................................................................... $ 303,469 $ 305,883
Broadcast operating expenses.................................................. 195,744 197,854
Depreciation and amortization................................................. 46,840 47,118
Corporate general and administrative expenses................................. 6,655 6,733
Operating income.............................................................. 54,230 54,178
Interest expense.............................................................. 60,438 60,438
Loss before extraordinary items............................................... (8,895) (10,116)
OTHER FINANCIAL DATA:
Broadcast cash flow(1)........................................................ $ 107,725 $ 108,029
Broadcast cash flow margin(2)................................................. 35.5% 35.3%
EBITDA(1)..................................................................... $ 101,070 $ 101,296
Capital Expenditures.......................................................... 19,677 21,456
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH
31, 1996
--------------
<S> <C>
BALANCE SHEET DATA:
Working capital............................................................................. $ 79,792
Intangible assets........................................................................... 1,323,229
Total assets................................................................................ 1,575,556
Long-term debt.............................................................................. 625,000
LYONs....................................................................................... 100,000
Total shareholders' equity.................................................................. 493,600
</TABLE>
13
<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following sets forth summary historical financial data for Jacor,
Citicasters and Noble for the three years ended December 1995 and the three
month periods ended March 1995 and 1996. The comparability of the historical
consolidated financial data reflected in this financial data has been
significantly impacted by acquisitions, dispositions and restructurings. The
information presented below is qualified in its entirety by, and should be read
in conjunction with "Selected Historical Financial Data," and the Consolidated
Financial Statements and the Notes thereto for each of Jacor, Citicasters and
Noble, incorporated herein by reference.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- -----------------
JACOR 1993 1994 1995 1995 1996(3)
------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue........................... $ 89,932 $107,010 $118,891 $24,016 $30,074
Broadcast operating expenses.......... 69,520 80,468 87,290 19,960 23,871
Depreciation and amortization......... 10,223 9,698 9,483 2,112 2,619
Corporate general and administrative
expenses............................. 3,564 3,361 3,501 884 1,139
Operating income...................... 6,625 13,483 18,617 1,061 2,445
Net income............................ 1,438 7,852 10,965 751 891
OTHER FINANCIAL DATA:
Broadcast cash flow(1)................ $ 20,412 $26,542 $31,601 $4,057 $6,203
Broadcast cash flow margin(2)......... 22.7% 24.8% 26.6% 16.9% 20.6%
EBITDA(1)............................. $ 16,848 $23,181 $28,100 $3,173 $5,064
Capital expenditures.................. 1,495 2,221 4,969 707 3,437
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
CITICASTERS PREDECESSOR(4) CITICASTERS
------------- -------------------
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- -----------------
1993 1994(5) 1995 1995 1996
------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue........................... $ 205,168 $197,043 $136,414 $29,045 $31,177
Broadcast operating expenses.......... 133,070 117,718 80,929 19,879 21,728
Depreciation and amortization......... 28,119 22,946 14,635 3,319 4,065
Corporate general and administrative
expenses............................. 3,996 4,796 4,303 1,123 1,053
Operating income...................... 39,983 51,583 36,547 4,724 4,331
Net income (loss)..................... 341,344 63,106 14,317 1,278 (570)
OTHER FINANCIAL DATA:
Broadcast cash flow(1)................ $ 72,098 $79,325 $55,485 $9,166 $9,449
Broadcast cash flow margin(2)......... 35.1% 40.3% 40.7% 31.6% 30.3%
EBITDA(1)............................. $ 68,102 $74,529 $51,182 $8,043 $8,396
Capital expenditures.................. 5,967 7,569 11,857 2,591 1,820
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER(6) MARCH(6)
----------------------------------- -----------------
NOBLE 1993 1994(7) 1995 1995 1996(3)
------------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(8)
Net revenue........................... $ 47,509 $49,602 $41,902 $9,006 $6,058
Broadcast operating expenses.......... 36,944 37,892 31,445 7,638 5,626
Depreciation and amortization......... 6,916 6,311 4,107 1,027 1,079
Corporate general and administrative
expenses............................. 2,702 2,621 2,285 602 577
Operating income (loss)............... 947 (5,026) 4,065 (261) (1,224)
Net income (loss)..................... 13,452 (16,038) 56,853 (207) 10,142
OTHER FINANCIAL DATA:(8)
Broadcast cash flow(1)................ $ 10,565 $11,710 $10,457 $1,368 $ 432
Broadcast cash flow margin(2)......... 22.2% 23.6% 25.0% 15.2% 7.1%
EBITDA(1)............................. $ 7,863 $ 9,089 $ 8,172 $ 766 $(145)
Capital expenditures.................. 3,009 1,124 2,851 532 352
</TABLE>
14
<PAGE>
- ------------
(1) "Broadcast cash flow" means operating income before reduction in carrying
value of assets, depreciation and amortization, and corporate general and
administrative expenses. "EBITDA" means operating income before reduction in
carrying value of assets, depreciation and amortization. Broadcast cash flow
and EBITDA should not be considered in isolation from, or as a substitute
for, operating income, net income or cash flow and other consolidated income
or cash flow statement data computed in accordance with generally accepted
accounting principles or as a measure of a company's profitability or
liquidity. Although these measures of performance are not calculated in
accordance with generally accepted accounting principles, they are widely
used in the broadcasting industry as a measure of a company's operating
performance because they assist in comparing station performance on a
consistent basis across companies without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors such
as historical cost bases. Broadcast cash flow also excludes the effect of
corporate general and administrative expenses, which generally do not relate
directly to station performance. Pro forma EBITDA includes approximately
$5.1 million of annual estimated pretax station cost savings and
approximately $4.8 million of annual estimated pretax corporate overhead
savings resulting from the Acquisitions.
(2) Broadcast cash flow margin equals broadcast cash flow as a percentage of net
revenue.
(3) The February 1996 sale of Noble's San Diego operating assets to Jacor
significantly affects comparison of net revenue, operating expenses and
broadcast cash flow for the three months ended March 1996 as compared to the
three months ended March 1995.
(4) Prior to its emergence from Chapter 11 bankruptcy in December 1993,
Citicasters was known as Great American Communications Company (the
"Predecessor"). As a result of the application of "fresh-start reporting,"
the selected financial data for periods prior to December 31, 1993 are not
comparable to periods subsequent to such date.
(5) In 1994, the sale of four television stations significantly affects
comparison of net revenue, operating expenses and broadcast cash flow for
1994 as compared to 1993 and 1995.
(6) Noble's fiscal year ends on the last Sunday of December, and each of Noble's
fiscal quarters ends on the last Sunday of the respective fiscal quarter, to
coincide with the standard broadcast year.
(7) In 1994, Noble reduced intangible assets by $7.8 million to reflect the
carrying value of the broadcasting assets at their estimated fair market
values.
(8) The comparability of the information in the Summary Historical Financial
Data is affected by various acquisitions and dispositions of radio stations,
as well as the August 1995 restructuring.
COMPARATIVE PER SHARE DATA
Set forth below are historical earnings per share, cash dividends per share
and book value per share data of Jacor, Citicasters and Noble and unaudited pro
forma per share data of the combined companies. The data set forth below should
be read in conjunction with the Jacor, Citicasters and Noble audited
consolidated financial statements, including the notes thereto, which are
incorporated by reference in this Proxy Statement/Information
Statement/Prospectus. The data should also be read in conjunction with the
unaudited pro forma combined condensed financial statements, including the notes
thereto, included elsewhere in this Proxy Statement/Information
Statement/Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, 1995 MARCH 1996
--------------------------------- ---------------------------------
JACOR CITICASTERS NOBLE JACOR CITICASTERS NOBLE
--------- ----------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL:
Earnings per share........................... $ 0.52 $ 0.68 $ 45.40 $ 0.04 $ (0.03) $ 5.67
Cash dividends per share..................... -- 0.03 -- -- -- --
Book value per share......................... 7.66 7.99 (73.34) 7.70 7.96 (21.68)
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, 1995 1996
----------------- ---------------
<S> <C> <C>
PRO FORMA:
Loss per share........................................................... $ (0.29) $ (0.29)
Cash dividends per share................................................. N/A N/A
Book value per share..................................................... N/A 16.63
</TABLE>
15
<PAGE>
COMPARATIVE MARKET PRICES AND DIVIDENDS
Both Jacor Common Stock and Citicasters Common Stock are quoted on the
Nasdaq National Market. Jacor Common Stock is quoted under the symbol "JCOR" and
Citicasters Common Stock is quoted under the symbol "CITI."
On February 12, 1996, the last full trading day prior to the public
announcement of the execution and delivery of the Merger Agreement, the closing
price per share of (i) Jacor Common Stock was $18.50, and (ii) Citicasters
Common Stock was $26.625. On June 20, 1996, the most recent date for which it
was practicable to obtain market data prior to the printing of this Proxy
Statement/Information Statement/ Prospectus, the closing price per share of (i)
Jacor Common Stock was $27.50 and Citicasters Common Stock was $30.625. Jacor
does not anticipate paying dividends on Jacor Common Stock in the foreseeable
future. See "COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION."
16
<PAGE>
RISK FACTORS
PENDING ACQUISITIONS. The consummation of the Acquisitions requires FCC
approval with respect to the transfer of the broadcast licenses of Citicasters
and Noble to Jacor. Jacor has filed applications seeking FCC approval for the
Acquisitions. The FCC has granted its consent to Jacor's acquisition of Noble
and such consent is no longer subject to further administrative or judicial
review. To date, the FCC has not acted on the transfer application for the
Merger.
In addition, FCC rules generally prohibit the ownership of a television
station and of one or more radio stations serving the same market (termed the
"one-to-a-market rule"). In connection with its application seeking FCC approval
for the Merger, Jacor has requested a waiver of the one-to-a-market rule with
respect to the Cincinnati and Tampa markets. The FCC is currently in the process
of evaluating changes in its one-to-a-market waiver policy, which is anticipated
to be implemented in the fourth quarter of 1996. Jacor believes its waiver
request justifies grant of a permanent waiver under the FCC's current
one-to-a-market waiver policy. In some recent transactions where ownership
policies were under review by the FCC, it has granted temporary waivers to allow
multi-station transactions to be consummated without immediate station
divestitures. Jacor has indicated to the FCC that it would accept initially a
grant of a temporary waiver that would allow the consummation of the Merger,
without the immediate divestiture of any station. In such event, Jacor would
request that the FCC evaluate Jacor's permanent waiver request under the FCC's
new one-to-a-market policy, once adopted. The FCC has tentatively concluded that
the one-to-a-market rule should be modified in one of two ways: (1) elimination
of the one-to-a-market rule altogether, relying instead on compliance with the
separate radio and television local ownership limits; or (2) permit
radio-television combinations when at least 30 independent broadcast voices
remain in the local market, regardless of market ranking. The Merger would meet
either proposed standard. If the FCC does not grant either a permanent or
temporary waiver, but otherwise consents to the Merger, Jacor could consummate
the Merger if it divests the Citicasters television stations or the Citicasters
and Jacor radio stations in the Cincinnati and Tampa markets. If divestitures
are required, there can be no assurance that Jacor would be able to obtain full
value for such stations or that such sales would not have a material adverse
impact upon Jacor's business, financial condition and results of operations. In
such event, however, Jacor's intention would be to seek reconsideration and/or
appellate court review of the FCC's decision.
The consummation of the Acquisitions also is subject to the expiration or
termination of the applicable waiting period under the HSR Act. Jacor has
received second requests for information from the Antitrust Division of the
Department of Justice (the "Antitrust Division") relating to each of the Merger
and the Noble Acquisition which focus particularly on the Citicasters and Noble
radio stations in Cincinnati and Denver, respectively. The applicable waiting
period under the HSR Act for each of the Merger and Noble Acquisition will
expire 20 days after both parties in the applicable transaction substantially
comply with the second request relevant to that transaction. After such
expiration, the parties are free to consummate the applicable transaction unless
they voluntarily agree with the Antitrust Division to delay such closing or the
Antitrust Division seeks to, and is successful in its efforts to, through
judicial action, extend the waiting period or enjoin the applicable transaction.
Jacor believes that the parties have substantially complied with the second
request relative to the Merger, and further believes that the applicable waiting
period with respect to the Merger expired on June 9, 1996. Jacor also believes
that the parties completed substantial compliance with the second request
relevant to the Noble Acquisition on June 17, 1996, and anticipates that the
applicable waiting period with respect to the Noble Acquisition will expire on
July 7, 1996. The Antitrust Division has expressed concern regarding the
possible effect of the Merger in the Cincinnati market, and the parties to the
Merger are having ongoing discussions with the Antitrust Division to address
those concerns. To date the Antitrust Division has not expressed a substantive
view of the Noble Acquisition.
If the Merger is not consummated prior to January 1, 1997, JCAC will be
required to make an offer to repurchase the Notes and the commitments of the
banks and the financial institutions to fund the New Credit Facility would
terminate. In the event the Merger is not consummated prior to January 1, 1997
and Jacor is required to seek additional sources of financing, there can be no
assurance that Jacor could secure such financing or that such financing, if
available, would be on terms acceptable to Jacor. Accordingly, the failure by
Jacor to consummate the Merger prior to January 1, 1997 could result in Jacor
being unable to secure financing or could delay or prevent any subsequent
consummation of the Merger.
17
<PAGE>
There can be no assurance that (i) the FCC will approve (a) the transfer of
the broadcast licenses from Citicasters to Jacor, or (b) the one-to-a-market
rule waivers; (ii) the FCC or a court would affirm the FCC consent to the Noble
Acquisition if such review is undertaken; (iii) objections will not be raised by
the Antitrust Division that would require substantial changes to the terms of
the Acquisitions, (iv) Jacor will be successful in consummating the Acquisitions
in a timely manner or on the terms described herein, or (v) if the Merger is not
consummated prior to January 1, 1997 Jacor will be successful in securing
additional sources of financing. See "THE MERGER--Regulatory Matters."
RISKS OF ACQUISITION STRATEGY. Jacor intends to pursue growth through the
opportunistic acquisition of broadcasting companies, radio station groups and
individual radio stations. In this regard, Jacor routinely reviews such
acquisition opportunities. Jacor believes that currently there are available a
number of acquisition opportunities that would be complementary to its business.
Other than with respect to the Acquisitions and as described in "BUSINESS OF
JACOR." Jacor currently has no binding commitments to acquire any specific
business or other material assets. Jacor cannot predict whether it will be
successful in pursuing such acquisition opportunities or what the consequences
of any such acquisition would be.
The Acquisitions will increase Jacor's broadcast station portfolio by 29
radio and two television stations. Jacor's acquisition strategy involves
numerous risks, including difficulties in the integration of operations and
systems, the diversion of management's attention from other business concerns
and the potential loss of key employees of acquired stations. There can be no
assurance that Jacor's management will be able to manage effectively the
resulting business or that such acquisitions will benefit Jacor.
In addition to the expenditure of capital relating to the Acquisitions (see
"THE MERGER--Financing Arrangements"), future acquisitions also may involve the
expenditure of significant funds. Depending on the nature, size and timing of
future acquisitions, Jacor may be required to raise additional financing. There
is no assurance that such additional financing will be available to Jacor on
acceptable terms.
GOVERNMENTAL REGULATION OF BROADCASTING INDUSTRY. The broadcasting industry
is subject to extensive federal regulation which, among other things, requires
approval by the FCC for the issuance, renewal, transfer, and assignment of
broadcasting station operating licenses and limits the number of broadcasting
properties Jacor may acquire. Additionally, in certain circumstances, the
Communications Act of 1934, as amended (the "Communications Act") and FCC rules
will operate to impose limitations on alien ownership and voting of the capital
stock of Jacor. The Telecommunications Act of 1996 (the "Telecom Act"), which
became law on February 8, 1996, creates significant new opportunities for
broadcasting companies, but also creates uncertainties as to how the FCC and/or
the courts will enforce and/or interpret the Telecom Act. See "THE
MERGER--Regulatory Matters."
Jacor's business is dependent upon maintaining its broadcasting licenses
issued by the FCC, which are issued for maximum terms of eight years. The
majority of Jacor's radio operating licenses (and those to be acquired from
Citicasters and Noble) expire at various times in 1996 and 1997. Although it is
rare for the FCC to deny a renewal application, there can be no assurance that
the future renewal applications will be approved, or that such renewals will not
include conditions or qualifications that could adversely affect Jacor's
operations. Moreover, governmental regulations and policies may change over time
and there can be no assurance that such changes would not have a material
adverse impact upon Jacor's business, financial condition and results of
operations. See "THE MERGER--Regulatory Matters."
COMPETITION; BUSINESS RISKS. Broadcasting is a highly competitive business.
Jacor's, Noble's and Citicasters' radio stations and Citicasters' television
stations compete for audiences and advertising revenues directly with other
radio and television stations, as well as with other media, such as newspapers,
magazines, cable television, outdoor advertising, and direct mail, within their
respective markets. Audience ratings and market shares are subject to change and
any adverse change in a particular market could have a material and adverse
effect on the revenue of stations located in that market. Future operations are
further subject to many variables which could have an adverse effect upon
Jacor's financial performance. These variables include economic conditions, both
generally and relative to the broadcasting industry; shifts in population and
other demographics; the level of competition for advertising dollars with other
radio stations, television stations, and other entertainment and communications
media; fluctuations in operating costs; technological changes and innovations;
changes in labor conditions; and changes in governmental regulations and
policies
18
<PAGE>
and actions of federal regulatory bodies, including the FCC. Although Jacor
believes that each of its stations, and each station operated by Noble and
Citicasters, is able to compete effectively in its respective market, there can
be no assurance that any such stations will be able to maintain or increase its
current audience ratings and advertising revenues.
SUBSTANTIAL LEVERAGE AND LIMITED FINANCIAL FLEXIBILITY. The Acquisitions and
the Financing will result in a higher level of indebtedness for Jacor. At March
31, 1996, on a combined pro forma basis, Jacor would have had indebtedness of
$725.0 million representing approximately 59.5% of total capitalization. See
"UNAUDITED PRO FORMA FINANCIAL INFORMATION." Jacor's level of indebtedness
following the Acquisitions may have the following important consequences: (i)
significant interest expense and principal repayment obligations resulting in
substantial annual fixed charges; (ii) significant limitations on Jacor's
ability to obtain additional debt financing; and (iii) increased vulnerability
to adverse general economic and industry conditions. In addition, Jacor's
existing and anticipated credit facilities have or will have a number of
financial covenants, including interest coverage, debt service coverage and a
maximum debt to EBITDA ratio.
SHARE OWNERSHIP BY ZELL/CHILMARK. As of May 31, 1996, the Jacor Record Date,
Zell/Chilmark was the owner of approximately 70.0% of the then outstanding Jacor
Common Stock. As a result of the consummation of the 1996 Stock Offering on June
12, 1996 and exercises of the 1993 Warrants prior to conversion, Zell/ Chilmark
currently holds approximately 42.8% of the outstanding Jacor Common Stock. The
large share ownership of Zell/Chilmark may have the effect of discouraging
certain types of transactions involving an actual or potential change of control
of Jacor, including transactions in which the holders of Jacor Common Stock
might otherwise receive a premium for their shares over then-current market
prices.
Subject to certain restrictions under the Securities Act and under an
agreement with the underwriters for the 1996 Stock Offering restricting the sale
of shares of Jacor Common Stock by Zell/Chilmark for a period of 180 days after
the commencement date of the 1996 Stock Offering, Zell/Chilmark is free to sell
shares of Jacor Common Stock from time to time for any reason. By virtue of its
current control of Jacor, Zell/Chilmark could sell large amounts of Jacor Common
Stock by causing Jacor to file a registration statement with respect to such
stock. In addition, Zell/Chilmark could sell its shares of Jacor Common Stock
without registration pursuant to Rule 144 under the Securities Act. Jacor can
make no prediction as to the effect, if any, that such sales of shares of Jacor
Common Stock would have on the prevailing market price. Sales of substantial
amounts of Jacor Common Stock, or the availability of such shares for sale,
could adversely affect prevailing market prices. Sales or transfers of Jacor
Common Stock by Zell/Chilmark could result in another person or entity becoming
the controlling shareholder of Jacor.
LACK OF DIVIDENDS; RESTRICTIONS ON PAYMENTS OF DIVIDENDS. Jacor has not paid
any dividends to its shareholders. Jacor intends to retain all available
earnings, if any, generated by its operations for the development and growth of
its business and does not anticipate paying any dividends on Jacor Common Stock
in the foreseeable future. In addition, the payment of dividends on the Jacor
Common Stock is restricted under its credit facilities.
KEY PERSONNEL. Jacor's business is dependent upon the performance of certain
key employees, including its President and Co-Chief Operating Officers. Jacor
employs several on-air personalities with significant loyal audiences in their
respective markets. Jacor generally enters into long-term employment agreements
with its key on-air talent to protect its interests in those relationships, but
there can be no assurances that all such on-air personalities will remain with
Jacor.
POTENTIAL NEGATIVE IMPACT OF BLANK CHECK PREFERRED STOCK ISSUANCES. Assuming
Jacor is successful in reincorporating in Delaware as is currently proposed,
Jacor has authorized for issuance up to 4,000,000 shares of undesignated
preferred stock. The Jacor Board will have the authority, without further vote
or action by Jacor shareholders, to issue the undesignated shares of Jacor
preferred stock in one or more series and to fix all rights, qualifications,
preferences, privileges, limitations and restrictions of each such series,
including dividend rights, voting rights, terms of redemption, redemption
prices, liquidation preferences and the number of shares constituting any series
or the designation of such series. Although it currently has no plans to do so,
the Jacor Board, without shareholder approval, can issue Jacor preferred stock
with voting and conversion rights which would adversely affect the voting power
of the holders of Jacor Common Stock.
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In addition, the issuance of Jacor preferred stock may have the effect of
delaying, deferring or preventing a change in control of Jacor and could
therefore have a negative impact on the trading price of Jacor Common Stock. See
"DESCRIPTION OF JACOR CAPITAL STOCK."
FORWARD LOOKING STATEMENTS. This Proxy Statement/Information
Statement/Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act. Discussions containing such forward-looking
statements may be found in the material set forth under "SUMMARY OF PROXY
STATEMENT/INFORMATION STATEMENT/PROSPECTUS", as well as within the Proxy
Statement/ Information Statement/Prospectus generally. In addition, when used in
this Proxy Statement/Information Statement/Prospectus, the words "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially from those
described in the forward-looking statements as a result of the risk factors set
forth below and the matters set forth in the Proxy Statement/Information
Statement/Prospectus generally. Jacor undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements that may
be made to reflect any future events or circumstances. Jacor cautions the
reader, however, that this list of risk factors may not be exhaustive.
JACOR ANNUAL MEETING; CITICASTERS ACTION BY WRITTEN CONSENT
This Proxy Statement/Information Statement/Prospectus is being furnished (i)
to the holders of Jacor Common Stock in connection with the solicitation of
proxies by the Jacor Board from the holders of Jacor Common Stock for use at the
Jacor Annual Meeting, and (ii) to the holders of Citicasters Common Stock in
connection with the approval of the Merger Agreement upon action taken by
written consent of the holders of a majority of the outstanding shares of
Citicasters Common Stock.
JACOR ANNUAL MEETING
PURPOSE OF JACOR ANNUAL MEETING. At the Jacor Annual Meeting, Jacor
Shareholders will be asked to consider and vote on the following: (i) to approve
the reincorporation of Jacor from a corporation organized under the laws of the
State of Ohio to a corporation organized under the laws of the State of
Delaware; (ii) to approve the issuance of the Jacor Warrants pursuant to the
Merger Agreement and the shares of Jacor Common Stock issuable on the exercise
thereof; (iii) the election of seven directors to serve on the Jacor Board until
the next annual meeting or until their successors are elected and qualified; and
(iv) such other matters as may properly be presented for the consideration of
Jacor shareholders. The Jacor Board unanimously adopted the Merger Agreement and
unanimously recommends that Jacor shareholders vote FOR each of the proposals
listed above.
The Jacor Board does not know, as of the date of mailing of this Proxy
Statement/Information Statement/Prospectus, of any other business to be brought
before the Jacor Annual Meeting. However, the enclosed proxy card authorizes the
voting of shares represented by the proxy on all other matters that may properly
come before the Jacor Annual Meeting, and any adjournment or adjournments
thereof. It is the intention of the proxy holders to take such action in
connection therewith as shall be in accordance with their best judgment.
DATE, PLACE AND TIME; RECORD DATE. The Jacor Annual Meeting will be held on
Tuesday, July 23, 1996, in the Fifth Third Bank Theatre at the Aronoff Center
for the Arts located at the corner of East Seventh Street and Main Street,
Cincinnati, Ohio 45202, commencing at 10:30 a.m., local time, and at any
adjournment or postponement thereof. The Jacor Annual Meeting may be adjourned
to another date and/or place for any proper purpose (including, without
limitation, for the purposes of soliciting additional proxies). The Jacor Board
has fixed the close of business on May 31, 1996 as the Jacor Record Date. As of
the close of business on the Jacor Record Date, 18,439,694 shares of Jacor
Common Stock were issued and outstanding and entitled to vote at the Jacor
Annual Meeting.
VOTING RIGHTS. Each holder of record of Jacor Common Stock on the Jacor
Record Date will be entitled to one vote on each of the proposals listed above.
The affirmative vote of two-thirds of the outstanding shares of Jacor Common
Stock is required to approve the Reincorporation. The affirmative vote of a
majority of the votes cast by proxy or in person at the Jacor Annual Meeting is
required to approve the
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issuance of the Jacor Warrants pursuant to the Merger Agreement and the shares
of Jacor Common Stock issuable upon the exercise thereof. In the election of
directors, those nominees receiving the greatest number of votes will be elected
as the directors.
Pursuant to the Jacor Shareholders Agreement, Zell/Chilmark has granted to
Citicasters an irrevocable proxy to vote all of the shares of Jacor Common Stock
owned by Zell/Chilmark in favor of the proposal to issue the Jacor Warrants and
the underlying shares of Jacor Common Stock. Accordingly, this proposal will be
adopted at the Jacor Annual Meeting. Zell/Chilmark has further indicated that it
will vote FOR each of the other proposals and FOR the seven nominees for
election to the Jacor Board.
JACOR PROXIES. All shares of Jacor Common Stock which are represented by a
properly executed proxy received prior to or at the Jacor Annual Meeting will,
unless such proxies have been revoked, be voted in accordance with the
instructions indicated in such proxies. If no instructions are indicated on a
properly executed Jacor proxy, such shares will be voted as follows: FOR the
Reincorporation, FOR the issuance of Jacor Warrants pursuant to the Merger
Agreement and the shares of Jacor Common Stock issuable upon the exercise
thereof, and FOR the election of the Jacor Board's nominees for directors listed
on the enclosed proxy card. A Jacor shareholder may revoke a proxy at any time
prior to the Jacor Annual Meeting by delivering to the Secretary of Jacor a
notice of revocation bearing a later date, by a duly executed proxy bearing a
later date or by attending such meeting and voting in person.
In addition to soliciting proxies by mail, proxies may also be solicited by
Jacor and its respective directors, officers and employees (who will receive no
additional compensation therefor in addition to their regular salaries and fees)
by telephone, telegram, facsimile transmission and other electronic
communication methods or in person. All expenses of soliciting proxies from
Jacor shareholders will be borne by Jacor. Banks, brokerage firms and other
custodians who hold shares of Jacor Common Stock in their name or custody or in
the name of nominees for others will be reimbursed by Jacor for their reasonable
expenses incurred in forwarding proxy solicitation materials to those persons
for whom they hold such shares.
CITICASTERS ACTION BY WRITTEN CONSENT
On February 12, 1996, the Citicasters Board unanimously adopted the Merger
Agreement and determined that the terms of the Merger are fair to, and in the
best interests of, the holders of Citicasters Common Stock. Under the FBCA, the
affirmative vote of the holders of a majority of the outstanding Citicasters
Common Stock is required to approve the Merger. As of the Citicasters Record
Date, there were issued and outstanding 20,007,522 shares of Citicasters Common
Stock, holders of record of which are entitled to one vote per share of
Citicasters Common Stock held on all matters submitted to a vote of
shareholders. On February 12, 1996, the Consenting Stockholders entered into the
Stockholders Agreement with Jacor, pursuant to which each of the Consenting
Stockholders agreed to execute and deliver to Citicasters prior to the close of
business on the thirtieth day following the date of the Merger Agreement, unless
the Merger Agreement was terminated prior to such date, an irrevocable written
consent approving the Merger Agreement.
On March 13, 1996, the Consenting Stockholders, owners collectively of
approximately 54% of Citicasters Common Stock outstanding on the Citicasters
Record Date, executed and delivered the written consents to Jacor. On June 19,
1996, the Consenting Stockholders delivered to Jacor new written consents to
further approve the Merger Agreement. Jacor subsequently delivered all such
written consents to Citicasters on the date hereof. Such written consents are
irrevocable and are sufficient under the FBCA, upon receipt by Citicasters, to
approve the Merger Agreement. Therefore, no further action by the shareholders
of Citicasters is necessary to approve the Merger Agreement or consummate the
Merger and no such approval will be sought. ACCORDINGLY, CITICASTERS IS NOT
ASKING ANY CITICASTERS SHAREHOLDER FOR A PROXY AND CITICASTERS SHAREHOLDERS ARE
REQUESTED NOT TO SEND A PROXY. NO MEETING OF CITICASTERS SHAREHOLDERS WILL BE
HELD TO CONSIDER APPROVAL OF THE MERGER.
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THE MERGER
The description of the Merger Agreement set forth in this section includes
all material terms of the Merger Agreement but does not purport to be complete
and is qualified in its entirety by reference to the Merger Agreement which is
attached as Annex I to this Proxy Statement/Information Statement/Prospectus and
is incorporated by reference herein.
BACKGROUND OF AND REASONS FOR THE MERGER--JACOR
JACOR BACKGROUND. Since 1993, Jacor has been actively seeking to expand
through acquisitions and has identified numerous potential acquisition and
merger candidates. From the outset of Jacor's implementation of this strategy,
Jacor has considered Citicasters to be an attractive candidate with which to
engage in a strategic transaction. Jacor believed that a merger with Citicasters
could create numerous synergies and operating advantages for both companies and
from time to time engaged in very preliminary discussions with Citicasters about
such possibilities. Due in significant part to federal laws and regulations
governing the broadcasting industry, including limitations on the number of
radio stations that could be owned within a given market and in total, Jacor and
Citicasters were unable to seriously entertain the prospects of combining the
companies.
During the Fall of 1995, Jacor and Citicasters again commenced discussions
about a possible combination in light of proposed changes in federal
telecommunications laws and regulations and exchanged preliminary information
regarding their respective operations. Within this period of time, two meetings
and several telephone conversations occurred between Robert L. Lawrence, the
Co-Chief Operating Officer and a director of Jacor, and S. Craig Lindner, a
director of Citicasters. In the second meeting, Mr. Lawrence and Randy Michaels,
the President, Co-Chief Operating Officer and a director of Jacor both met with
Mr. Lindner, and Messrs. Michaels and Lindner subsequently met once thereafter.
During these meetings and conversations, the principals all expressed enthusiasm
for the strategic prospects of combining Jacor and Citicasters, notwithstanding
that the discussions remained very preliminary. However, the prospects for
passage of telecommunications law reform were uncertain, and such uncertainty
impeded the progress of discussions between Jacor and Citicasters.
Throughout this period, Jacor continued to explore numerous other
acquisition opportunities. In December 1995, Jacor commenced serious
negotiations to acquire Noble, which negotiations intensified in January 1996.
On January 16, 1996, the Jacor Board convened a special meeting in which several
merger and acquisition candidates were discussed, including Citicasters,
although consideration primarily revolved around the possible acquisition of
Noble. At the January 16 Jacor Board meeting, the Jacor Board approved continued
negotiations for the acquisition of Noble and authorized Jacor's management to
pursue additional negotiations including, but not limited to, Citicasters. The
Jacor Board also formed a special committee comprised of Messrs. Alexander,
Dammeyer and Michaels and Mrs. Rosenberg, which committee was empowered to
explore, analyze and recommend significant mergers and acquisitions to the full
Jacor Board.
Thereafter, Jacor continued to explore several such potential acquisitions
which appeared, based on preliminary information, to make strategic and economic
sense for Jacor and its shareholders. Upon further investigation and due
diligence relating to those potential acquisitions, Jacor management and the
special committee determined that the prices desired by those acquisition
candidates would not have constituted an economically sound investment for
Jacor. With respect to one such potential acquisition candidate which solicited
bids, Jacor submitted a bid but Jacor was not the high bidder.
In late January 1996, after the expiration of the exclusivity period that
Citicasters had granted to another potential acquiror, Jacor once again
initiated discussions with Citicasters as the prospects for passage of
telecommunications reform appeared more likely and the exclusive negotiating
rights that Citicasters had granted to a third party had expired without any
acquisition agreement being agreed upon by Citicasters and such third party.
During a telephone conversation between Mr. Lawrence and Mr. Lindner, Mr.
Lindner suggested to Mr. Lawrence that if Jacor wanted to seriously pursue an
acquisition of Citicasters, Jacor should proceed on an expedited basis.
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By the end of January 1996, Congress passed the Telecom Act and it appeared
imminent that President Clinton would sign the Telecom Act into law. With the
primary regulatory barrier to a strategic combination between Jacor and
Citicasters on the verge of being considerably lowered, Jacor and Citicasters
entered into a confidentiality agreement on February 1, 1996 and serious
negotiations between the companies ensued.
In early February 1996, Jacor's management, the special committee and their
legal, tax and accounting advisors commenced their review and analysis of
operational, financial, strategic and other aspects of a proposed merger of
Citicasters with Jacor. In particular, Jacor's legal, tax and accounting
advisors began their review of Citicasters' publicly-available financial
statements and analyzed certain tax considerations in connection therewith.
On February 6, 1996, Messrs. Michaels and Lawrence, Sheli Z. Rosenberg, a
member of the Jacor special committee, David J. Rosen, on behalf of Equity Group
Investments, Inc., an affiliate of Zell/ Chilmark which served as a financial
advisor to Jacor, and Samuel Zell, a principal of Zell/Chilmark, Jacor's
majority shareholder, and S. Craig Lindner, John P. Zanotti, the President and
Chief Executive Officer of Citicasters, James E. Evans, a director of
Citicasters, and Samuel J. Simon, Senior Vice President and General Counsel of
Citicasters, along with their respective legal representatives, met in
Cincinnati, Ohio and engaged in detailed discussions regarding the potential
acquisition price for Citicasters, the form of consideration that would be
payable, Jacor's desire that the Consenting Stockholders evidence their binding
commitment to approve the proposed acquisition and the economic obligations of
the parties to each other in the event the transaction would not close following
any public announcement.
Following the February 6, 1996 meeting, management and the respective
representatives and advisors of Jacor and Citicasters continued their due
diligence and began intensive negotiation and drafting of documents in the five
day period beginning February 7, 1996 through February 11, 1996. Counsel met at
length on three occasions and communicated by phone numerous times to negotiate
the details of the definitive agreements relating to the proposed Merger
including without limitation the following matters: the structure of the
proposed Merger, the amount and form of the proposed Merger consideration,
limitations on the time period during which Citicasters could entertain
competing offers, lock-up provisions relating to the Consenting Stockholders,
the irrevocable proxy desired by Citicasters of Zell/Chilmark, conditions
precedent to the closing of the proposed merger, the amount payable by Jacor to
Citicasters upon Jacor's failure to consummate the proposed merger, antidilution
and exercise price adjustments to the Jacor Warrants, drop dead dates, the time
periods in which Jacor could complete its due diligence and the representations
and warranties to be provided by each of Jacor and Citicasters. Through their
respective legal counsel in the course of these meetings and telephone
conferences, the parties negotiated key terms and conditions of the proposed
acquisition and Jacor's legal counsel consulted frequently with Jacor's
management as to unresolved issues. These negotiations resulted in the
preparation of a proposed definitive agreement which Jacor's management and
legal counsel believed reflected mutually agreeable terms and conditions to be
presented to the Jacor Board and the Citicasters Board, respectively, on
February 12, 1996.
On February 12, 1996, the Jacor Board held a special meeting (the "Jacor
February Board Meeting") to consider the terms of the Merger and the
transactions contemplated thereby, including the Merger Consideration and the
assumption of Citicasters' payment obligations under Employment Continuation
Agreements. The Jacor Board reviewed and discussed the issues raised during the
February 6, 1996 meeting as well as other terms of the proposed transaction,
such as the length of the period of time during which Citicasters could
entertain competing offers and a cash flow requirement or protection on
performance requirement. Jacor's management informed the Jacor Board that
management expected that the Telecom Act would cause broadcast entities to
diversify their properties and formats in order to reach a larger segment of the
target audience. Jacor's management presented a written overview of the radio
and television properties held by Jacor and Citicasters in each of their
respective markets and summarized the reasons why management believed that the
proposed transactions were in Jacor's best interest. Jacor's management
presented to, and discussed with, the Jacor Board its analysis of projected
returns on investment and its analysis of the potential dilution to net earnings
that would result from the proposed merger. These analyses focused primarily on
projected broadcast and operating cash flows of Citicasters, as estimated by
Jacor's management.
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Jacor's financial advisor, Equity Group Investments, Inc. ("EGI") reviewed
and commented on the materials prepared by Jacor's management prior to the Jacor
February Board Meeting. Representatives of EGI attended the Jacor February Board
Meeting and provided the Jacor Board with a matrix of possible values for the
proposed Jacor Warrants calculated by using the Black-Scholes methodology. EGI
also provided the Jacor Board with a schedule that set forth estimated
valuations of Citicasters based upon various assumed Citicasters stock prices.
EGI further discussed its estimate of the monies that could be required of Jacor
to pay the Merger Consideration and the potential sources of funds that Jacor
could access to raise the required monies.
In preparing the matrix of possible values for the Jacor Warrants, EGI's
calculations were based upon various assumed exercise prices for the Jacor
Warrants and various assumed volatilities in Jacor Common Stock. EGI concluded
that a reasonable estimated value of each Jacor Warrant would be $1.12 based
upon the negotiated $28.00 per share of Jacor Common Stock exercise price and
EGI's determination that the appropriate volatility was 35%. The appropriate
volatility was determined by the historical volatility in the market price of
Jacor Common Stock specifically and in radio industry stocks generally.
To assist the Jacor Board in analyzing the Merger Consideration, EGI
presented a valuation schedule. This valuation schedule estimated the total
value of Citicasters by adding the net equity value of Citicasters (defined as
the number of fully diluted shares outstanding multiplied by the various assumed
Citicasters share prices) and the total outstanding indebtedness of Citicasters.
Such schedule also set forth Jacor management's estimate of annual broadcast
cash flow that it believed Citicasters' properties would have generated in 1995
if Citicasters had operated all of its existing stations for the full year and
Jacor management's estimates of 1996 broadcast cash flow for these same
stations. EGI further calculated the multiples of such pro forma broadcast cash
flow to the total Citicasters' value under each scenario. Based upon the
negotiated $29.50 cash price for each share of Citicasters Common Stock, the
estimated value of Citicasters for purposes of EGI's analysis was $759.2 million
and the multiples to 1995 and 1996 pro forma broadcast cash flow were 13.4x and
11.7x, respectively. Based upon such multiples, EGI informed the Jacor Board
that it believed the range of multiples that Jacor had considered in negotiating
the Merger Consideration to be within the range of reasonable multiples then
being paid for radio broadcast companies having established, cash flow producing
properties; such reasonable multiples ranging from 10.5x to 16.0x in EGI's view.
EGI also provided the Jacor Board with a potential capital structure with
which to finance the Merger. This discussion included mention of the risks of
accessing the capital markets in general and the risks of entering into the
Merger Agreement with no financing contingency. This discussion of potential
capital structures was intended to be illustrative of ways in which Jacor could
obtain the necessary funds to pay the Merger Consideration and was not an
exhaustive overview of all of the financing sources potentially available to
Jacor.
Zell/Chilmark, the majority shareholder of Jacor, is an affiliate of EGI.
EGI is a privately owned investment and management company principally engaged
in the valuation of, investment in and oversight of businesses and real estate.
Jacor has had an ongoing advisory relationship with EGI and routinely consults
with EGI as to Jacor's potential acquisitions and other significant business
matters. Jacor imposed no restrictions on, and provided no instructions as to,
the analyses performed by EGI. In consideration of EGI's advisory services
rendered in connection with the Merger, as well as for EGI's services relating
to the Noble Acquisition, the Existing Credit Facility and the Financing, Jacor
paid EGI a fee of approximately $3.4 million. See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."
The Jacor Board, after considering numerous factors set forth below,
determined by a unanimous vote (i) that the transactions contemplated by the
Merger Agreement were in the best interests of Jacor and its shareholders, (ii)
to adopt and approve the Merger Agreement and the transactions contemplated
thereby, (iii) to adopt and approve the Stockholders Agreement and the forms of
the Warrant Agreement and the Escrow Agreement, and (iv) to recommend to Jacor's
shareholders for their approval the proposals contained in this Proxy
Statement/Information Statement/Prospectus with respect to the Merger and
related transactions. Jacor then executed the Merger Agreement and issued its
press release announcing the proposed Merger.
JACOR REASONS. The Jacor Board believes the terms of the Merger Agreement
and the transactions contemplated thereby are fair to, and in the best interests
of, Jacor and its shareholders. Accordingly, at the
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Jacor February Board Meeting, the Jacor Board unanimously approved the Merger.
In reaching its determination, the Jacor Board consulted with Jacor's
management, as well as its financial, accounting and legal advisors, and
considered a number of factors, including, without limitation, the following:
(i) the benefits of providing Jacor with the opportunity to combine with
Citicasters, an experienced company in radio and television operations, and
to thereby expand Jacor's existing business in telecommunications;
(ii) the potential synergies to be realized as a result of the
combination of the operations of Jacor and Citicasters, including the
centralization and consolidation of many management, accounting, legal,
engineering, purchasing and administrative functions, and the consolidation
of the facilities of most of the stations and their news gathering and
reporting activities, all of which will result in significant cost
efficiencies;
(iii) based on Citicasters' earnings history, the additional cash flow
from Citicasters after the consummation of the Merger could provide Jacor
with additional net operating income commencing in fiscal year 1997;
(iv) the Merger would diversify Jacor's existing business into
television broadcasting (unless divestiture of one or more television
stations would be required as described under "RISK FACTORS--Pending
Acquisitions"), making Jacor's overall results of operations less affected
by volatility within the radio industry;
(v) information with respect to the financial condition, business,
operations and prospects of both Jacor and Citicasters on a historical and
prospective basis, including certain information reflecting the two
companies on a pro forma combined basis; and
(vi) the terms of the Merger Agreement and related documents.
These factors were considered collectively by the Jacor Board, without
giving specific weight to any particular factor.
The Jacor Board also considered a number of potential negative factors,
including, without limitation, the following:
(i) Jacor's lack of experience in television operations;
(ii) the need for regulatory approvals of the transactions;
(iii) the required deposit into escrow of an irrevocable, direct pay
letter of credit in the amount of $75.0 million; and
(iv) the potential tax consequences to Jacor of effectuating the Merger
and acquiring Citicasters' low basis in its assets, which low tax basis
could limit Jacor's ability to swap or dispose of such assets on a favorable
basis.
The Jacor Board discussed these issues at length and determined that the
strategic economic advantages of proceeding with the Merger outweighed these
potential negative factors. The Jacor Board determined that Citicasters'
television operations were maintained by highly qualified station management
whom Jacor expects to retain following the Merger, that the required regulatory
approvals were likely to be obtained and that there were no other foreseeable
events that could be reasonably expected to trigger the payment of the letter of
credit proceeds to Citicasters, and that the tax issues had been fully
considered and reflected in management's projections.
BACKGROUND OF AND REASONS FOR THE MERGER--CITICASTERS
CITICASTERS BACKGROUND. In mid-summer 1995, Citicasters began to explore
strategic alternatives to enhance shareholder value, especially in light of
anticipated federal legislation easing certain ownership restrictions relating
to radio stations. Citicasters's efforts culminated on August 28, 1995, when it
announced that it had entered into an agreement with OmniAmerica Communications,
Inc. ("OmniAmerica") to merge the two companies, subject to shareholder and
regulatory approvals. On November 17, 1995, however,
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Citicasters announced that it had decided not to go forward with the merger with
OmniAmerica, but that instead it would proceed to acquire OmniAmerica's three
radio stations in Columbus, Ohio. This decision was based on management's
recommendation to the Executive Committee that it would not be in Citicasters'
best interests to proceed with the merger on the previously agreed to financial
terms.
From time to time, and particularly after the announcement of the
termination of the OmniAmerica merger, Citicasters had informal discussions with
several other parties, including Jacor, involving an array of possible
transactions with Citicasters. None of such discussions, however, resulted in
the presentation of any offer or formal proposal.
In late November 1995, a broadcast entity ("First Offeror") expressed what
management perceived as a bona fide interest in acquiring Citicasters at a
significant premium to the current trading prices for Citicasters Common Stock.
The First Offeror indicated that it was considering an offer for all of the
outstanding common stock at a price per share of $28.50 to $30.00. At the
request of the First Offeror and to assist it in formulating a formal proposal,
Citicasters agreed to provide the First Offeror and its representatives certain
non-public and proprietary information regarding Citicasters under a
confidentiality agreement dated December 8, 1995.
On or about December 20, 1995, the First Offeror submitted a formal proposal
to Citicasters that outlined the terms under which it would be prepared to
acquire all of the outstanding Citicasters Common Stock at a price of $30.00 per
share. These terms included, among other things, a thirty-day period during
which the First Offeror would complete its due diligence and the parties would
be obliged to negotiate exclusively with each other regarding a merger
transaction. If, upon completion of the exclusivity period, First Offeror was
prepared to enter into a definitive agreement for the purchase of all
outstanding Citicasters Common Stock at $30.00 per share, but Citicasters
declined to enter into the agreement, then, under certain conditions, First
Offeror would require Citicasters to reimburse it for its out of pocket expenses
relating to its due diligence review in an amount not to exceed $2.0 million.
At a meeting on December 22, 1995, the Board of Directors authorized
Citicasters to accept First Offeror's proposal for exclusive negotiations for a
period not to exceed thirty days. In addition, the Board authorized Citicasters
to engage Salomon Brothers to act as financial advisor to Citicasters in
connection with the proposal. On December 28, 1995, Citicasters and the First
Offeror executed the proposal, which called for the exclusivity rights to expire
on January 19, 1996.
The parties then commenced negotiations regarding the terms of a definitive
merger agreement. These negotiations involved members of the Citicasters Board's
Executive Committee and certain senior officers of Citicasters and certain
principals and representatives of the First Offeror. During the course of these
negotiations, First Offeror informed Citicasters that the per share purchase
price that it was prepared to pay to holders of Citicasters Common Stock was
reduced from $30.00 per share to $28.50 per share. Citicasters' management
believes that the reason for the price adjustment was not attributable to any
perceived change in Citicasters business prospects nor the discovery of any
undisclosed material liabilities or developments. In addition to discussions
regarding price, there were extensive negotiations regarding allocation of the
risk associated with obtaining the required regulatory approvals. On January 19,
1996, the exclusivity period expired with neither party willing to enter into a
binding agreement.
Thereafter, Citicasters and First Offeror continued negotiations although
Citicasters declined First Offeror's request for an extension of the exclusivity
arrangement. At the same time, members of the Citicasters Board's Executive
Committee were approached by representatives of Jacor regarding a possible
acquisition of Citicasters by Jacor. While Citicasters continued negotiations
with the First Offeror, it also engaged in preliminary discussions with Jacor
and made available to Jacor non-public and proprietary information relating to
Citicasters under a confidentiality agreement dated February 1, 1996. Such
information was substantially the same information provided the First Offeror
and included station budgets, sales reports and more detailed information
supporting Citicasters' financial statements. Jacor's management requested such
non-public and proprietary information in connection with its overall due
diligence and analysis of the radio and television properties held by
Citicasters in each of Citicasters' markets. Such
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information had been prepared by Citicasters' management for Citicasters
internal use, and neither the Citicasters Board nor the Jacor Board reviewed or
relied upon such information in determining whether or not to approve the
Merger.
Jacor's management utilized the historical costs and expenses reflected in
the various Citicasters station budgets to assist it in estimating potential
cost savings synergies that could be obtained after the Merger, particularly in
the Atlanta, Cincinnati and Tampa markets where Jacor also owns radio
properties. Jacor's management also utilized the 1995 revenue information
contained in each station budget, coupled with publicly available ratings
information for each station, in preparing its own estimates of projected
broadcast and operating cash flows of Citicasters following the Merger. Jacor's
management incorporated these estimates into its analyses of the radio and
television properties held by Citicasters and Jacor in their respective markets
as presented to EGI and the Jacor Board, but Jacor's management did not provide
copies of the underlying non-public and proprietary information of Citicasters
to either EGI or the Jacor Board.
On February 5, 1996, principals and representatives of Citicasters and the
First Offeror met to finalize the terms of a definitive merger agreement, which
included a $28.50 per share purchase price. However, the parties could not reach
agreement on several key terms, including an acceptable increase in the per
share purchase price if the Closing did not occur prior to July 1, 1996. As a
consequence, no agreement was finalized but the parties continued their
negotiations.
On February 6, 1996, at a meeting in Cincinnati, Ohio, Jacor presented a
proposal to acquire Citicasters. Those representing Citicasters at the meeting
included S. Craig Lindner and James E. Evans, both directors, John P. Zanotti,
Chief Executive Officer and President, Samuel J. Simon, Senior Vice President
and General Counsel and outside counsel. Those in attendance for Jacor included
Messrs. Michaels and Lawrence, Sheli Z. Rosenberg, David J. Rosen, Samuel Zell
and legal counsel. The terms of such proposal included: (i) a $29.50 per share
cash purchase price, (ii) warrants to purchase Jacor Common Stock to be issued
to the holders of Citicasters Common Stock, and (iii) an increase in the per
share cash purchase price if the Closing did not occur by October 1, 1996. In
addition, Jacor agreed to deposit in escrow an irrevocable, direct pay letter of
credit in the amount of $75.0 million, the proceeds of which would be payable to
Citicasters if, among other reasons, the merger between Citicasters and
Acquisition Corp. could not be consummated because of the failure to obtain
required regulatory approvals. Jacor's offer was also conditioned on
Citicasters' receipt of the written consents of the Consenting Stockholders.
Jacor's original offer mandated delivery of such written consents as of the date
of the execution of a definitive merger agreement between the parties.
Citicasters rejected this condition, as Citicasters desired a period of time in
which it could entertain competing offers, if any. The parties subsequently
agreed that the Consenting Stockholders would deliver the written consents to
Citicasters on the thirtieth day following the date of the merger agreement
(unless the merger agreement was terminated prior to such date).
Between February 7, 1996 and February 12, 1996, representatives of
Citicasters and Jacor negotiated the terms of the definitive merger agreement
and certain ancillary documents. During this period, the First Offeror remained
in contact with Citicasters, was made aware of the competing proposal but
declined to increase its $28.50 offer. On February 12, 1996, the Citicasters
Board unanimously adopted the Merger Agreement and the related documents and
authorized its officers to execute the Merger Agreement. Thereafter, the Merger
Agreement was executed and a press release announcing the agreement was issued
by Citicasters.
Following execution of the Merger Agreement, several parties contacted
Citicasters on an informal basis regarding possible transactions involving
Citicasters. However, these inquiries were general in nature, and none of these
parties contacted Citicasters again with any proposals or requests to review
non-public information. On March 13, 1996 and on June 19, 1996, the Consenting
Stockholders delivered to Jacor their irrevocable written consents approving the
Merger Agreement, which written consents are sufficient under the FBCA to
approve the Merger Agreement without further Citicasters shareholder action. On
March 18, 1996, Citicasters reimbursed the First Offeror in the amount of
$217,000 for legal and accounting fees incurred in connection with the merger
negotiations. This payment was in consideration of the First Offeror
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continuing good faith merger negotiations after the exclusivity period had
expired. Following the expiration of the exclusivity period, the parties were
under no obligation to continue negotiations with respect to the merger and no
definitive or preliminary agreements had been made.
CITICASTERS REASONS. In reaching its conclusion to adopt the Merger
Agreement, the Citicasters' Board considered a number of factors, including,
without limitation, the following:
(i) The terms and conditions of the Merger Agreement and related
documents, as reviewed by and discussed with Citicasters' management
and legal counsel. The Citicasters Board gave consideration to, among other
things, the structure of the proposed business combination and the amount
and form of consideration offered to Citicasters' shareholders (I.E., $29.50
per share in cash (which amount is subject to increase if the Closing does
not occur prior to October 1, 1996), which represents a significant premium
to the trading prices of Citicasters Common Stock during the period prior to
the announcement of the execution of the Merger Agreement, and the Warrant
Consideration, which provides the holders of Citicasters Common Stock with
an opportunity to benefit in the event of an increase in value of the Jacor
Common Stock in excess of the exercise price of the Jacor Warrants resulting
from, among other things, the Merger).
(ii)The historical market prices and trading volume of Citicasters Common
Stock and historical and projected earnings.
(iii)
The market prices and financial data related to companies engaged in
similar businesses to Citicasters and prices and premiums paid in
recent acquisitions of similar companies.
(iv)Citicasters' historical and recent operating results, its financial
condition, its borrowing and financing capacity and the Citicasters
Board's and management's evaluation of Citicasters' properties, assets and
prospects, including the potential impact of the Telecom Act.
(v) The absence of any term or condition which in the Citicasters Board's
view was unduly onerous or could materially impede or impair the
consummation of the Merger.
(vi)The financial condition and business reputation of Jacor and Jacor's
major investor, Zell/ Chilmark, the ability of Jacor to complete the
Merger in a timely manner and the security provided by the $75.0 million
irrevocable, direct pay letter of credit deposited in escrow by Jacor upon
delivery by the Consenting Stockholders of their written consents approving
the Merger Agreement, the proceeds of which are payable to Citicasters if,
among other reasons, the Merger cannot be consummated because of the failure
to obtain required regulatory approvals.
(vii)
The Citicasters Board's belief that the Merger represents the best
alternative available to Citicasters and its shareholders under the
present circumstances, based on presentations from management of Citicasters
and the consideration of all other factors considered relevant by the
Citicasters Board. In this regard, the Citicasters Board considered
Citicasters' recent history of discussions with third parties regarding the
possibility of an acquisition or other strategic transactions.
(viii)
The fact that the Merger Agreement did not preclude Citicasters,
prior to the delivery by the Consenting Stockholders of the written
consents approving the Merger Agreement, from (i) participating in
discussions or negotiations with, and during such period, furnishing
information to, persons or entities that sought to engage in discussions or
negotiations, requested information or made a proposal to acquire
Citicasters if the Citicasters Board determined in good faith that such
action was required for the discharge of its fiduciary obligations, and (ii)
terminating the Merger Agreement and accepting an alternative proposal if
the Citicasters Board determined that such proposal was on terms superior
for the holders of Citicasters Common Stock as compared to the Merger
(subject to payment of a $20.0 million fee to Jacor (the "Jacor Fee") upon
such termination, whether the transactions contemplated by such alternative
proposal or any other proposal are consummated by Citicasters). In
connection with its review of the terms of the Merger Agreement, the
Citicasters Board gave consideration to the size and the structure of the
Jacor Fee and the terms and conditions of the Stockholders Agreement. After
discussion, during which Salomon Brothers opined that the amount of the
Jacor Fee was within the range of reasonableness for a transaction the size
of the Merger, the Citicasters Board
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concluded that such terms, while necessary to induce Jacor to enter into the
Merger Agreement, did not, in the aggregate, preclude the possibility of a
competing bid for Citicasters prior to the Consenting Stockholders' delivery
of the written consents approving the Merger Agreement.
(ix)The written opinion of Salomon Brothers, dated February 12, 1996,
that on the basis of its review and analysis and subject to the
limitations set forth therein, the Merger Consideration to be received by
holders of Citicasters Common Stock pursuant to the Merger is fair, from a
financial point of view, to such holders.
The Citicasters Board did not assign relative weights to the foregoing
factors or determine that any factor was of more importance than other factors.
Rather, the Citicasters Board viewed its position and recommendations as being
based on the totality of the information presented to and considered by it.
OPINION OF CITICASTERS FINANCIAL ADVISOR
Citicasters retained Salomon Brothers on December 28, 1995 to act as
Citicasters financial advisor in connection with the Merger, including rendering
its opinion to the Citicasters Board as to the fairness, from a financial point
of view, of the Merger Consideration to be received by the holders of
Citicasters Common Stock.
At the February 12, 1996 meeting of Citicasters Board, representatives of
Salomon Brothers made a presentation with respect to the Merger and Salomon
Brothers rendered to the Board its oral opinion, subsequently confirmed in
writing as of the same date, that, as of such date, and subject to the
assumptions made, matters considered and limits on the review undertaken set
forth in such opinion and summarized below, the Merger Consideration was fair,
from a financial point of view, to the holders of Citicasters Common Stock. No
limitations were imposed by the Citicasters Board upon Salomon Brothers with
respect to the investigations made or procedures followed by it in rendering its
opinion.
The full text of Salomon Brothers' fairness opinion (the "Salomon Opinion"),
which sets forth, among other things, the assumptions made, matters considered
and limits on the review undertaken, is attached as Annex V to this Proxy
Statement/Information Statement/Prospectus and is incorporated herein by
reference. The holders of Citicasters Common Stock are urged to read the Salomon
Opinion in its entirety. Presented to the Citicasters Board, the Salomon Opinion
addresses only the fairness, from a financial point of view, to the holders of
Citicasters Common Stock of the Merger Consideration to be received by the
holders of Citicasters Common Stock in the Merger and does not address
Citicasters' underlying business decision to effect the Merger. The summary of
the Salomon Opinion set forth below is qualified in its entirety by reference to
the full text of such opinion attached as Annex V.
In connection with the Salomon Opinion, Salomon Brothers reviewed and
analyzed, among other things: (i) a draft of the Merger Agreement dated February
11, 1996 and certain related documents; (ii) certain publicly available and
other information concerning Citicasters and Jacor, including the Annual Reports
on Form 10-K of Citicasters and Jacor for each of the years in the five-year
period ended December 31, 1994 and the Quarterly Reports on Form 10-Q of
Citicasters and Jacor for the quarter ended September 30, 1995; (iii) certain
other internal information for Citicasters, primarily financial in nature,
including Citicasters' estimates of 1995 and 1996 earnings, concerning the
business and operations of Citicasters furnished to Salomon Brothers by
Citicasters for purposes of its analysis; (iv) certain publicly available
information concerning the historic and current trading of, and the historic and
current trading market for, Citicasters Common Stock and Jacor Common Stock; (v)
certain publicly available information concerning the historic and current
trading of, and the historic and current trading market for, the equity
securities of certain other companies that Salomon Brothers believed to be
comparable to Citicasters and Jacor; and (vi) certain publicly available
information concerning the nature and terms of certain other acquisition
transactions that Salomon Brothers considered relevant to its inquiry. Salomon
Brothers was not requested to and did not generally solicit third party interest
in Citicasters. Salomon Brothers also met with certain officers and employees of
Citicasters to discuss the foregoing as well as other matters Salomon Brothers
believed relevant to its inquiry. Salomon Brothers also considered such other
information, financial studies, analyses, investigations and financial, economic
and market criteria which it deemed relevant.
In conducting its review and analysis and in arriving at its opinion,
Salomon Brothers assumed and relied upon the accuracy and completeness of all of
the financial and other information provided to it or
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publicly available and neither attempted independently to verify nor assumed
responsibility for verifying any of such information. With respect to
Citicasters' estimates of earnings for 1995 and 1996, Salomon Brothers assumed
that they were reasonably prepared on bases reflecting the best currently
available estimates and judgments of Citicasters' management as to the financial
performance of Citicasters for the periods covered. Salomon Brothers did not
make or obtain any independent evaluations or appraisals of any of Citicasters'
or Jacor's assets, properties or facilities, nor was it furnished with any such
evaluations or appraisals. Salomon Brothers assumed that the Merger would be
consummated in accordance with the terms of the Merger Agreement. Salomon
Brothers also assumed that the definitive Merger Agreement and related documents
would not, when executed, contain any terms or conditions that differed
materially from the terms and conditions contained in the drafts of such
documents it reviewed.
In conducting its analysis and arriving at its opinion, Salomon Brothers
considered such financial and other factors as it deemed appropriate under the
circumstances, including, among others: (i) the historic and current financial
position and results of the operations of Citicasters and Jacor based on
publicly available financial information; (ii) the business prospects of
Citicasters, and, where such information was publicly available, of Jacor, (iii)
the historic and current trading of, and the historic and current trading market
for, Citicasters Common Stock and Jacor Common Stock and for the equity
securities of certain other companies that Salomon Brothers believed to be
comparable to Citicasters and Jacor; and (iv) the nature and terms of certain
other acquisition transactions that Salomon Brothers considered relevant to its
inquiry. Salomon Brothers also took into account its assessment of general
economic, market and financial conditions and its knowledge of the broadcasting
industry as well as its experience in connection with similar transactions and
securities valuation generally. The Salomon Opinion necessarily is based upon
conditions as they existed and could be evaluated on the date of the Salomon
Opinion.
In connection with its presentation to the Citicasters Board on February 12,
1996, Salomon Brothers advised the Citicasters Board that, in evaluating the
Merger Consideration to be received in the Merger by the holders of Citicasters
Common Stock, Salomon Brothers had performed a variety of financial analyses
with respect to Citicasters, all as summarized below.
HISTORIC STOCK TRADING ANALYSIS. Salomon Brothers reviewed the historic
trading prices for Citicasters Common Stock and the relationship between
movements of such stock and movements in a composite index of stock of selected
companies in the radio and television broadcasting industries (the "Radio Index"
and the "Television Index"). The Radio Index was composed of the following
companies: American Radio Systems Corporation, Clear Channel Communications,
Inc., Emmis Broadcasting Corporation, Evergreen Media Corporation, EZ
Communications, Inc., Infinity Broadcasting Corporation, Jacor, SFX
Broadcasting, Inc. and Saga Communications, Inc. The Television Index was
composed of the following companies: Argyle Television, Inc., Clear Channel
Communications, Inc., Granite Broadcasting Corporation, LIN Television
Corporation, Renaissance Communications Corporation, Sinclair Broadcast Group,
Inc. and Young Broadcasting Inc. Between January 1, 1995 and mid-February 1996,
the time at which Salomon Brothers delivered the Salomon Opinion to the
Citicasters Board, the trading price of Citicasters Common Stock substantially
outperformed both the Radio Index and Television Index.
The trading price of Citicasters common stock versus the performance of the
Radio Index and Television Index was believed by Citicasters financial advisor
to be relevant in determining the value of Citicasters common stock and in
analyzing the fairness of any transaction in which Citicasters common stock
would be exchanged. Given that the Merger Consideration in the proposed Merger
is primarily cash, Citicasters believes that this measure of valuation is not
relevant to a Citicasters stockholder in the context of this transaction.
ANALYSIS OF PURCHASE PRICE. Salomon Brothers evaluated the Merger
Consideration as a multiple of various standard evaluation benchmarks. The
multiples were as follows, in each case for 1995 and for 1996 (based on
management estimates), respectively: (a) the Merger Consideration as a multiple
of earnings before interest, taxes, depreciation and amortization
("EBITDA")--14.8x and 12.7x; and (b) the Merger Consideration as a multiple of
Broadcast Cash Flow (EBITDA before corporate expenses)--13.7x and 11.9x. For
1995 and for 1996 (based on management estimates), respectively, the Merger
Consideration as a multiple of earnings before interest and taxes ("EBIT") was:
21.0x and 17.4x, which multiples were derived from data presented to the
Citicasters Board.
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Salomon Brothers also evaluated the Cash Consideration as a multiple of the
evaluation benchmarks set forth above. Cash Consideration as a multiple of
EBITDA for 1995 and 1996 was as follows: 14.4x and 12.4x. Cash Consideration as
a multiple of Broadcast Cash Flow for 1995 and 1996 was as follows: 13.3x and
11.6x. Cash Consideration as a multiple of EBIT for 1995 and 1996 was as
follows: 20.4x and 16.9x. Salomon Brothers' analysis indicated that the Cash
Consideration represented a 11.3% premium over the closing price of $26.50 per
Share on February 9, 1996, the last trading day before Salomon Brothers rendered
its opinion to the Citicasters Board.
VALUATION SUMMARY OF SELECTED PUBLICLY TRADED COMPANIES. Salomon Brothers
reviewed and compared certain financial information relating to Citicasters with
the corresponding financial information for American Radio Systems Corporation,
Chancellor Broadcasting Company, Clear Channel Communications, Inc., Emmis
Broadcasting Corporation, Evergreen Media Corporation, EZ Communications, Inc.,
Infinity Broadcasting Corporation, Jacor and SFX Broadcasting, Inc. (the "Radio
Broadcasting Companies") and Argyle Television, Inc., Granite Broadcasting
Corporation, LIN Television Corporation, Renaissance Communications Corporation,
Sinclair Broadcast Group, Inc., United Television, Inc. and Young Broadcasting
Inc. (the "Television Broadcasting Companies"). The Radio Broadcasting Companies
and the Television Broadcasting Companies were chosen because they were publicly
traded companies with operations that for the purposes of analysis were
considered by Salomon Brothers to be reasonably similar to Citicasters. Salomon
Brothers calculated and compared various financial multiples and ratios for
Citicasters and each of the Radio Broadcasting Companies and Television
Broadcasting Companies. The multiples and ratios for Citicasters were based on
information provided by Citicasters' management and the multiples for each of
the Radio Broadcasting Companies and the Television Broadcasting Companies were
based on public filings and were derived from publicly available media industry
research reports.
Using trading prices as of February 9, 1996: (a) the Adjusted Firm Value
(fully diluted market capitalization plus net debt including other long-term
liabilities minus other assets) multiple of estimated 1995 Broadcast Cash Flow
was 13.7x for Citicasters, compared with a range of 10.2x to 18.8x (with a
median of 12.7x) for the Radio Broadcasting Companies, and a range of 8.2x to
11.9x (with a median of 9.3x) for the Television Broadcasting Companies; and (b)
the Adjusted Firm Value multiple of estimated 1996 Broadcast Cash Flow was 11.9x
for Citicasters, compared with a range of 9.4x to 16.9x (with a median of 11.4x)
for the Radio Broadcasting Companies, and a range of 7.5x to 10.8x (with a
median of 9.0x) for the Television Broadcasting Companies.
SELECTED TRANSACTION ANALYSIS. Salomon Brothers analyzed certain information
relating to 27 selected transactions in the radio and television broadcasting
industries during 1995 and 1996. The ten radio broadcasting transactions
(together the "Radio Broadcasting Industry") reviewed, in reverse chronological
order of public announcement, were: (i) Jacor of Noble (2/96); (ii) Citicasters
of OmniAmerica Communications, Inc. (Columbus stations) (11/95); (iii) SFX
Broadcasting, Inc. of Liberty Broadcasting (11/95); (iv) Infinity Broadcasting
Corporation of Alliance Broadcasting (9/95); (v) Citicasters of OmniAmerica
Communications, Inc. (8/95); (vi) Chancellor Broadcasting Company of Shamrock
Broadcasting (8/95); (vii) Evergreen Media Corporation of Pyramid
Communications, Inc. (7/95); (viii) Regent Communications of Apollo Group, Inc.
(4/95); (ix) River City Broadcasting L.P. of Keymarket Communications, Inc.
(3/95); and (x) Evergreen Media Corporation of Broadcasting Partners, Inc.
(2/95). The seventeen television broadcasting transactions (together the
"Television Broadcasting Industry") reviewed, in reverse chronological order of
public announcement, were: (i) Benedek Broadcasting Corporation of Brissette
Broadcasting (12/95); (ii) Benedek Broadcasting Corporation of Morris
Communications (11/95); (iii) Allbritton Communications Company of Price
Communications Corporation (10/95); (iv) Freedom Communication of Photo
Electronics (West Palm Beach) (9/95); (v) Tribune Company of Gaylord
Entertainment Company (Houston) (9/95); (vi) Young Broadcasting Inc. of Broad
Street Television (7/95); (vii) NBC of Outlet Communications, Inc. (7/95);
(viii) News Corporation Ltd. of New World Communications Group, Inc.
(Birmingham) (7/95); (ix) ABRY Broadcast Partners of ACT III Broadcasting, Inc.
(6/95); (x) Petracom of Banam Broadcasting (6/95); (xi) LIN Television
Corporation of King World Productions, Inc. (Buffalo) (5/95); (xii) Smith
Broadcasting of TV Stations Partners (4/95); (xiii) Granite Broadcasting
Corporation of Queen City Broadcasting, Inc. (4/95); (xiv) Lee Enterprises, Inc.
of KSNW, KSNT (3/95); (xv) CBS Inc. of WPRI (3/95); (xi) New York Times Company
of WTKR (2/95); and (xvii) Granite Broadcasting Corporation of Busse
Broadcasting Corporation (Kalamazoo) (1/95). This analysis indicated that the
aggregate consideration paid
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as a multiple of 1995 Broadcast Cash Flow for the Radio Broadcasting Industry
ranged from a low of 8.5x to a high of 17.6x (with a median of 11.7x). This
compared with a multiple of 13.7x for the Merger. The aggregate consideration
paid as a multiple of 1995 Broadcast Cash Flow for the Television Broadcasting
Industry ranged from 9.0x to 20.0x (with a median of 10.8x). This compared with
a multiple of 13.7x for the Merger.
DISCOUNTED CASH FLOW ANALYSIS. Salomon Brothers performed a discounted cash
flow analysis based on two scenarios for earnings and cash flow from fiscal
years 1996 to 2004 developed by Salomon Brothers and Citicasters' management
using forecasted financials prepared by Citicasters' management for 1996 and
publicly available industry trends and research estimates for years thereafter.
The first scenario reflected projected market growth rates over the projected
period (the "Base Case Performance Scenario"); the second scenario reflected an
annual improvement of approximately $5.0 million in EBITDA beyond 1997 as a
result of improved operating performance at the radio stations and improved
ratings at the television stations (the "Superior Case Performance Scenario").
Based upon the scenario analyses, Salomon Brothers estimated the unlevered
free cash flows and EBITDA for the fiscal years 1996 through 2004 for each of
Citicasters' two segments: television and radio stations. Salomon Brothers
applied to the EBITDA for fiscal year 2004 estimated terminal value multiples
ranging from 9.5x to 10.5x for each of the Base Case Performance Scenario and
the Superior Case Performance Scenario for the television stations segment, and
10.5x to 11.5x for each of the Base Case Performance Scenario and the Superior
Case Performance Scenario for the radio stations segment, from which Salomon
Brothers derived ranges for the terminal values for Citicasters on a segment
basis. Salomon Brothers then discounted the stream of unlevered free cash flows
for the fiscal years 1996 through 2004 as well as the terminal values of
Citicasters' segments at discount rates ranging from 11.5% to 12.5% for each of
the television stations and radio stations segments. Based on these
calculations, Salomon Brothers derived a valuation range for the television
stations and radio stations segments, respectively, of Citicasters which, in
turn, were used in deriving a range of implied equity value per share of
Citicasters Common Stock of $23.81 to $26.47 for the Base Case Performance
Scenario and $25.30 to $27.68 for the Superior Case Performance Scenario.
No company used in the analyses summarized above is identical to Citicasters
or Jacor. Accordingly, such analyses must take into account differences in the
financial and operating characteristics of such companies and other factors that
would affect the public trading value and acquisition value of the companies. In
addition, the analyses summarized above did not purport to be indicative of
actual values or expected values of Citicasters Common Stock before or after the
Merger.
The foregoing summary does not purport to be a complete description of the
analyses performed by Salomon Brothers or of its presentation to the Citicasters
Board. The preparation of a fairness opinion involves various determinations as
to the most appropriate and relevant methods of financial analysis and the
application of these methods to the particular circumstances and, therefore,
such an opinion is not readily susceptible to partial or summary description.
Salomon Brothers believes that its analyses (and the summary set forth above)
must be considered as a whole, and that selecting portions of such analyses and
of the factors considered by Salomon Brothers, without considering all of such
analyses and factors, could create an incomplete view of the processes
underlying the analyses conducted by Salomon Brothers and the Salomon Opinion.
Any estimates contained in Salomon Brothers' analyses are not necessarily
indicative of actual values, which may be significantly more or less favorable
than as set forth therein. Estimates of values of companies do not purport to be
appraisals or necessarily to reflect the prices at which companies may actually
be sold.
Salomon Brothers is an internationally recognized investment banking firm
engaged in, among other things, the valuation of businesses and their securities
in connection with mergers and acquisitions, restructurings, leveraged buyouts,
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes. After receipt of the First Offeror's proposal, the
Citicasters Board authorized the retention of Salomon Brothers to act as
financial advisor to Citicasters. Citicasters retained Salomon Brothers based on
Salomon Brothers'
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reputation and expertise in transactions similar to the Merger, as well as its
familiarity with Citicasters. The amount of the Merger Consideration was
determined by arms' length negotiations between Citicasters and Jacor, in
consultation with their respective financial advisors and other representatives.
Salomon Brothers has previously rendered, and in the future may render, certain
investment banking and financial advisory services to Citicasters and Jacor, for
which Salomon Brothers received and may in the future receive customary
compensation. In addition, in the ordinary course of its business, Salomon
Brothers actively trades the debt and equity securities of both Citicasters and
Jacor for its own account and for the accounts of customers and, accordingly,
may at any time hold a long or short position in such securities.
Pursuant to an engagement letter dated December 28, 1995, as amended on
February 12, 1996, between Citicasters and Salomon Brothers, the fees to date
paid to Salomon Brothers for rendering financial advisory services to
Citicasters in connection with the Merger have been $1.35 million, which amount
will be credited against the final fee of $3.0 million, payable upon
consummation of the Merger. Citicasters has also agreed to reimburse Salomon
Brothers for reasonable fees and expenses of Salomon Brothers' legal counsel in
excess of $100,000, and to indemnify Salomon Brothers and certain related
persons against certain liabilities and expenses relating to or arising out of
its engagement, including certain liabilities under the federal securities laws.
CONVERSION OF CITICASTERS COMMON STOCK FOR THE MERGER CONSIDERATION
At the Effective Time, all outstanding shares of Citicasters Common Stock
will cease to be outstanding, and subject to the terms, conditions and
procedures set forth in the Merger Agreement, holders of shares of Citicasters
Common Stock shall receive for each share of Citicasters Common Stock $29.50 in
cash, plus, in the event that the Closing does not occur prior to October 1,
1996, for each full calendar month ending prior to the Merger commencing with
October 1996, an additional amount of $.22125 in cash. In addition, for each
share of Citicasters Common Stock held, Citicasters shareholders will receive
one Jacor Warrant to purchase a fractional share of Jacor Common Stock (which
fraction is anticipated to be .2035247) at a price of $28.00 per full share of
Jacor Common Stock, such exercise price to be reduced to $26.00 per full share
of Jacor Common Stock if the Merger is not consummated by October 1, 1996. The
Warrant Consideration will represent the right to purchase a fraction of a
share, the numerator of which is 4,400,000 and the denominator of which is the
number of shares of Citicasters Common Stock, on a fully diluted basis,
outstanding on the date of the Closing.
Based on the number of shares of Citicasters Common Stock outstanding on the
date hereof, the Cash Consideration payable in the Merger is approximately
$624.2 million and the Warrant Consideration is 21,618,990.5 Jacor Warrants
exercisable for 4,400,000 shares of Jacor Common Stock.
EXCHANGE OF CITICASTERS CERTIFICATES IN THE MERGER
Promptly after the Effective Time, the Exchange Agent will mail to each
holder of record of certificates which immediately prior to the Effective Time
represented outstanding shares of Citicasters Common Stock (the "Citicasters
Certificates") a form of transmittal letter advising such holder of the terms of
the exchange effected by the Merger and the procedure to be used for the
surrender of the Citicasters Certificates in exchange for the Merger
Consideration such holder has the right to receive pursuant to the Merger
Agreement, without interest thereon, per share of Citicasters Common Stock.
CITICASTERS SHAREHOLDERS ARE REQUESTED NOT TO SURRENDER THEIR CITICASTERS
CERTIFICATES FOR EXCHANGE UNTIL AFTER THE EFFECTIVE TIME WHEN THE TRANSMITTAL
FORM AND INSTRUCTIONS ARE MAILED BY THE EXCHANGE AGENT AND RECEIVED BY THEM.
Jacor Warrants and cash payments shall be delivered to such holder promptly
after proper delivery of the applicable Citicasters Certificates and letters of
transmittal to the Exchange Agent.
At and after the Effective Time and until surrendered as provided above,
Citicasters Certificates will be deemed to represent, for all purposes, only the
right to receive cash and certificates representing the number of Jacor Warrants
into which the shares of Citicasters Common Stock formerly represented by such
Citicasters Certificates were converted in the Merger. Upon surrender as
provided above, Citicasters Certificates shall be cancelled.
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CERTAIN TERMS OF THE MERGER AGREEMENT AND RELATED AGREEMENTS
REPRESENTATIONS, WARRANTIES AND COVENANTS. The Merger Agreement contains
various representations and warranties of the parties, none of which survive the
consummation of the Merger, including, among other things, representations from
the parties, as of the date of the Merger Agreement and, except in certain
cases, as of the Effective Time, relating to (i) each party's organization and
similar corporate matters, (ii) each party's capital structure, (iii) the
authorization, execution, delivery, performance and enforceability of the Merger
Agreement and related matters, (iv) the procurement of required consents or
approvals, the absence of conflicts with contracts and other instruments or no
violations of applicable laws, (v) the documents and reports filed by each party
with the Commission and the accuracy of the information contained therein, (vi)
the accuracy of the information provided by each party with respect to this
Proxy Statement/Information Statement/Prospectus, (vii) the accuracy of
financial statements and compliance with other accounting and tax related
matters, (viii) good and marketable title to all their material properties and
assets, (ix) compliance with FCC regulations, (x) the absence of material
litigation, (xi) certain environmental matters, and (xii) Citicasters' cash flow
results as of December 31, 1995.
Pursuant to the Merger Agreement, Citicasters has agreed that prior to the
Effective Time, except as agreed by the parties at the time of signing of the
Merger Agreement, Citicasters shall not without the prior written consent of
Jacor: (i) except in the ordinary course consistent with past practice, as
required by law or in accordance with the provisions of any applicable program
or plan adopted by the Citicasters Board, grant any general increase in
compensation or benefits to its employees or to its officers, or enter into or
amend the terms of any severance agreements with its officers; (ii) amend, alter
or revise any existing employment contract, understanding, arrangement or
agreement between Citicasters and any person receiving compensation in excess of
$150,000 per year (unless such amendment is required by law) to increase the
compensation or benefits payable thereunder or pursuant thereto or enter into
any new employment contract, understanding, arrangement or agreement with any
person having a salary thereunder in excess of $150,000 that Citicasters does
not have the unconditional right to terminate without liability (other than
liability for services already rendered) at any time on or after the Effective
Time; (iii) adopt any new employee benefit plan or make any change in or to any
existing plans other than any such change that is 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 Citicasters; (iv) sell, lease or otherwise
dispose of any of its assets or acquire any business or assets, except in the
ordinary course of business, in each case for an amount not exceeding $1.0
million; (v) incur any material amount of indebtedness for borrowed money or
make any loans, advances or capital contributions to, or investments (other than
non-controlling investments in the ordinary course of business) in, any other
person other than a Citicasters' subsidiary, or issue or sell any debt
securities, other than certain borrowings otherwise permitted by the Merger
Agreement; (vi) except as disclosed to Jacor prior to signing the Merger
Agreement, to authorize, commit to or make capital expenditures in each case in
an amount exceeding $6.0 million; (vii) mortgage or otherwise encumber or
subject to any lien any material amount of properties or assets owned by
Citicasters as of the date of the Merger Agreement except in the normal course
of business; (viii) make any material change to its accounting (including tax
accounting) methods, principles or practices, except as may be required by
generally accepted accounting principles; (ix) amend or propose to amend its
articles of incorporation or by-laws or equivalent organizational documents; (x)
declare or pay any dividend or distribution with respect to the Citicasters
Common Stock; (xi) except pursuant to stock options granted prior to the Merger
Agreement, issue, sell, deliver or agree to issue, sell, deliver (whether
through issuance or granting of options, warrants, commitments, subscriptions or
rights to purchase) any Citicasters Common Stock or split, combine, reclassify
or subdivide the Citicasters Common Stock; (xii) make any tax election or settle
or compromise any material tax liability for an amount greater than reflected on
the Citicasters financial statements; (xiii) except pursuant to stock options
granted prior to the Merger Agreement, directly or indirectly redeem, purchase
or otherwise acquire any shares of its capital stock or other securities; (xiv)
enter into any new lines of business or otherwise make material changes to the
operation of its business; (xv) except as to liabilities accrued on the books of
Citicasters as of the date of the Merger Agreement, pay or agree to pay in
settlement or compromise of any suits or claims of liability against
Citicasters, its directors, officers, employees or agents, more than an
aggregate of $100,000 for all such suits and claims; (xvi) enter
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into any agreement providing for the acceleration of payment or performance or
other consequence as a result of a change in control of Citicasters; (xvii)
purchase any radio or television stations, enter into any local marketing
arrangements, joint sales agreements or similar agreements; (xviii) except as
permitted under the Merger Agreement, enter into any contract, agreement or
understanding, whether in the ordinary course of business or not, which would be
the type of agreement which, if entered into prior to the date of the Merger
Agreement, would have to be disclosed to Jacor or which would obligate
Citicasters to make payments of more than $150,000 per year; (xix) take any
action or agree, in writing or otherwise, to take any of the foregoing actions
or any action which would make any representation or warranty in the Merger
Agreement materially untrue or incorrect; or (xx) commit to any of the
foregoing.
The Merger Agreement also obligates Jacor and Citicasters to (i) use their
reasonable best efforts to cooperate with each other in determining which
governmental filings are required to be made prior to the Effective Time with,
and which consents, approvals, permits or authorizations are required to be
obtained prior to the Effective Time from, governmental authorities in
connection with the execution and delivery of the Merger Agreement and the
consummation of the transactions contemplated thereby, and timely making all
such filings and timely seeking all such consents, approvals, permits or
authorizations; and (ii) use their reasonable best efforts to take, or cause to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by the Merger Agreement and satisfy the conditions to
the transactions contemplated thereby. However, nothing in the Merger Agreement
shall require Jacor to divest or hold separate any station or stations, or asset
or groups of assets, or enter into new arrangements or terminate any existing
arrangement, or take any other specific action requested by any governmental
authorities.
The Merger Agreement further provides that Citicasters shall not, and
Citicasters shall direct and use its reasonable best efforts to cause its
officers, directors, employees, agents, advisors and other representatives not
to, directly or indirectly, solicit, initiate, knowingly encourage, or
participate in discussions or negotiations regarding, any proposals or offers
from any individual, corporation, partnership, limited liability corporation,
joint venture, trust, association, unincorporated organization, other entity,
group or governmental authority ("Person") relating to any Competing Transaction
(as defined below) or furnish to any other Person any nonpublic information or
access to such information with respect to, or otherwise concerning, any
Competing Transaction. Citicasters further agreed to immediately cease and cause
to be terminated any existing discussions or negotiations with any third parties
conducted prior to the date of the Merger Agreement with respect to any proposed
Competing Transaction, and to promptly disclose the identity of any Person who
attempts to initiate any discussions contemplating a Competing Transaction.
Notwithstanding the foregoing, prior to March 13, 1996 at which time the
irrevocable written consents required by the Stockholders Agreement were duly
executed and delivered, Citicasters was not prohibited from (i) participating in
discussions or negotiations with a Person that sought to engage in discussions
or negotiations, requested information or made a proposal to acquire Citicasters
pursuant to a Competing Transaction, if Citicasters directors determined in good
faith that such action was required for the discharge of their fiduciary
obligations, based upon the written advice of independent legal counsel (a
"Director Duty"); (ii) complying with Rule 14d-9 or Rule 14e-2 promulgated under
the Exchange Act with regard to a tender or exchange offer; (iii) making any
disclosure to the Citicasters shareholders in accordance with a Director Duty;
(iv) failing to make, modifying or amending its recommendations, consents or
approvals referred to in the Merger Agreement in accordance with a Director
Duty; or (v) terminating the Merger Agreement and entering into an agreement
providing for a Competing Transaction in accordance with a Director Duty. None
of such events took place prior to March 13, 1996. For the purposes of the
Merger Agreement, "Competing Transaction" is defined to mean any of the
following involving Citicasters: (i) any merger, consolidation, share exchange,
business combination or other similar transaction; (ii) any sale, lease,
exchange, transfer or other disposition of all or substantially all of the
assets of Citicasters, in a single transaction or series of related
transactions; or (iii) any tender offer or exchange offer for shares of
Citicasters Common Stock.
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The Merger Agreement may be terminated in the event of certain breaches of a
representation, warranty or covenant therein. In addition, the Merger Agreement
may be terminated if Citicasters or the Citicasters Board takes certain actions
with respect to a Competing Transaction. See "THE MERGER-- Certain Terms of the
Merger Agreement and Related Agreements--Termination; Termination Fees."
CONDITIONS PRECEDENT TO THE MERGER. The obligations of Jacor and Citicasters
to effect the Merger are subject to the fulfillment or waiver of certain
conditions specified in the Merger Agreement including, among others: (i) the
continuing accuracy in all respects of the parties' respective representations
and warranties contained in the Merger Agreement except to the extent that the
aggregate effect of the inaccuracies in such representations and warranties as
of the applicable times (excluding materiality qualifiers) does not constitute a
Material Adverse Effect (as defined below) on Jacor or Citicasters, as the case
may be, 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; (ii) in the case of Citicasters' obligation to close, the performance and
compliance in all material respects by Jacor of all obligations under the Merger
Agreement required to be performed by Jacor on or prior to the consummation of
the Merger, and in the case of Jacor's obligation to close, the performance and
compliance in all respects by Citicasters of all obligations under the Merger
Agreement except to the extent that the aggregate effect of any non-performance
or non-compliance by Citicasters (excluding materiality qualifiers) does not
constitute a Material Adverse Effect on Citicasters when compared to the state
of facts which would exist if all such agreements and covenants had been
performed and complied with by Citicasters; (iii) the receipt of certain
material consents, approvals and waivers from governmental authorities and third
parties (in the case of FCC approval, whether or not any appeal or request for
reconsideration or for any sua sponte action by the FCC has expired); (iv) the
absence of any injunction or other order by any federal or state court
preventing consummation of the Merger; (v) the absence of any stop order
suspending the effectiveness of the Registration Statement of which this Proxy
Statement/Information Statement/Prospectus is a part; and (vi) as to Jacor's
obligation to close, that Citicasters achieved at least 90% of its projected
cash flow through June 30, 1996 and at least 75% of its projected cash flow for
the period July 1, 1996 through September 30, 1996. All conditions to the Merger
may be waived in the discretion of the party in whose favor the condition would
apply.
For purposes of the Merger Agreement, "Material Adverse Effect" means, with
respect to Citicasters or Jacor, 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 the party to perform its obligations under the Merger Agreement;
PROVIDED, HOWEVER, that results of operations will not be a component of
Material Adverse Effect for events that occur after the date of the Merger
Agreement; PROVIDED, FURTHER, HOWEVER, that no Material Adverse Effect will be
deemed to have occurred by reason of a general deterioration in the economy or
in the broadcasting industry after the date of the Merger Agreement.
TERMINATION; TERMINATION FEES. The Merger Agreement may be terminated at any
time prior to the Effective Time (a) by mutual written consent, or (b) by either
party if (i) the Effective Time shall have not occurred on or before May 31,
1997 (the "Outside Date"), and such failure does not result from any material
non-fulfillment by the terminating party of any obligation under the Merger
Agreement; (ii) any Governmental Authority shall have issued an injunction,
order or decree, enjoining or otherwise prohibiting the Merger and such
injunction, order or decree shall have become final and non-appealable (provided
that the party seeking to so terminate the Merger Agreement shall have used all
reasonable efforts to remove such injunction, order or decree) or if a
Governmental Authority has otherwise made a final determination that any
required Regulatory Authorization would not be forthcoming; (iii) if any
condition to the terminating party's obligations to consummate the transactions
contemplated thereby is incapable of being satisfied on or prior to the Outside
Date; provided, however, that (x) the terminating party has not breached the
terms of the Merger Agreement; (y) if Citicasters is the terminating party, the
Consenting Stockholders have not breached the terms of the Stockholders
Agreement; and (z) if Jacor is the terminating party, Zell/Chilmark has not
breached the terms of the Jacor Shareholders Agreement, in each case in any
manner that proximately contributes to the failure to consummate the Merger by
the Outside Date; or (iv) if the FCC shall have issued an order or ruling or
taken other action denying approval of the transactions contemplated
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by the Merger Agreement, and such order, ruling or other action shall have
become final and non-appealable; provided, however, that the party seeking to
terminate the Merger Agreement pursuant to such clause has used all required
efforts to obtain such FCC approval.
The Merger Agreement provides that Jacor may terminate the Merger Agreement
if (i) there shall have been any breach by a Consenting Stockholder of any
material representation, warranty, covenant or agreement contained in the
Stockholders Agreement, other than a breach that would not materially affect the
benefits Jacor is to receive thereunder; (ii) prior to the delivery of the
irrevocable written consents by the Consenting Stockholders, the Citicasters
Board shall withdraw or modify in any manner adverse to Jacor its approval or
recommendation of the Merger Agreement or the Merger, because the Citicasters
Board has determined to recommend any Competing Transaction, in accordance with
a Director Duty; and (iii) within 100 days of the date of the Merger Agreement,
Jacor reasonably believes, on the basis of its environmental inspection of
Citicasters' real properties, that Citicasters representations and warranties
regarding environmental matters as set forth in the Merger Agreement are not
true and correct both as of the date of the Merger Agreement and at all times
within 100 days after the date of the Merger Agreement.
The Merger Agreement provides that Citicasters may terminate the Merger
Agreement if (i) there shall have been any breach of any representation,
warranty, covenant or agreement by Zell/Chilmark under the Jacor Shareholders
Agreement which would have a material adverse effect on the benefits Citicasters
is to receive thereunder; or (ii) all required authorizations of the Jacor
shareholders have not been obtained.
If Jacor terminates the Merger Agreement due to the failure of a Consenting
Stockholder to perform his or its obligations under the Stockholders Agreement
at the time of termination, and there has been no misrepresentation by or breach
of any obligation of Jacor under the Merger Agreement other than a breach of or
non-compliance with any obligation which would not constitute a Material Adverse
Effect on Jacor, Citicasters must pay Jacor $20.0 million within two business
days after the Merger Agreement is terminated. In addition, the Stockholders
Agreement provides that if the Merger Agreement is terminated for such reason
and a transaction is consummated within eighteen months thereafter that results
in (i) the sale or other exchange of all or some of the Citicasters Common Stock
owned by the Consenting Stockholders who are natural persons (the "Individual
Consenting Stockholders"), or (ii) a payment being made with respect to the
shares of Citicasters Common Stock owned by the Consenting Stockholder following
a sale of substantially all of the assets of Citicasters, a recapitalization,
restructuring or other similar event, the Individual Consenting Stockholders
shall immediately after the consummation of such transaction pay to Jacor the
Compensating Payment (as defined below). The Compensating Payment shall be equal
to the number of shares of Citicasters Common Stock sold or otherwise disposed
of with respect to which the Individual Consenting Stockholders received a
payment multiplied by one-half of the Per Share Difference (as defined below).
Per Share Difference equals (x) the fair market value, valued as of the time the
other transaction is consummated, of the consideration per share of Citicasters
Common Stock received by the Individual Consenting Stockholders less (y) the
expected fair market value per share as of December 1, 1996, that would have
been received by the Individual Consenting Stockholders in the Merger.
If the Individual Consenting Stockholders and Jacor cannot agree on the
amount of the Compensating Payment, the Individual Consenting Stockholders shall
pay Jacor immediately a sum equal to what the Individual Consenting Stockholders
believe the Compensating Payment to be (the "Immediate Payment") plus interest
at 9% per year on the Immediate Payment for the period between the time the
other transaction is consummated and the time the Immediate Payment is made, and
the final amount of the Compensating Payment shall be determined in accordance
with the commercial arbitration rules of the American Arbitration Association.
Jacor shall, upon receipt of the arbitration award, be paid by the Individual
Consenting Stockholders the difference between the final amount of the
Compensating Payment and the Immediate Payment plus interest at 9% per year on
the difference from the date the other transaction was consummated to date of
the payment the final amount of the Compensating Payment pursuant to the
arbitration award.
If the Merger Agreement is terminated upon the occurrence of an event
described below, Citicasters after providing two days advance notice to Jacor
may draw on the irrevocable, direct pay $75.0 million letter of credit (the
"Letter of Credit") obtained by Jacor and issued to the Escrow Agent.
Citicasters may draw on the Letter of Credit only in the event that the Merger
Agreement is terminated by Citicasters (or, in the case
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of clauses (i), (ii) and (iv) below, by Jacor) because (i) of the failure by the
parties to consummate the Merger on or prior to the Outside Date, unless such
failure is due to the failure of the party seeking termination to perform or
observe in all material respects the covenants and agreements to be performed or
observed by it, except if there has been a failure to satisfy any of the
conditions to closing of Jacor (other than those conditions to closing which are
also conditions to closing of Citicasters); (ii) the issuance by a governmental
authority of a final and non-appealable injunction, order or decree enjoining or
otherwise prohibiting the consummation of the transactions contemplated by the
Merger Agreement or if a Governmental Authority has otherwise made a final
determination that any required Regulatory Authorization would not be
forthcoming, provided that the party seeking termination used all required
efforts to remove such injunction, order or decree; (iii) any condition to
Citicasters' obligations to consummate the transactions contemplated by the
Merger Agreement is incapable of being satisfied on or prior to the Outside
Date, provided that Citicasters has not materially breached the terms of the
Merger Agreement and the Consenting Stockholders have not materially breached
the terms of the Stockholders Agreement; (iv) of any final and non-appealable
action by the FCC denying approval of the transactions contemplated by the
Merger Agreement, provided that the party seeking termination used all required
efforts to obtain such FCC approval; or (v) the failure to obtain all of the
required Jacor shareholder authorizations to effect the transactions
contemplated by the Merger Agreement, or the breach by Zell/Chilmark of any
material representation or warranty or the failure of Zell/Chilmark to perform
any covenant or duty contained in the Jacor Shareholders Agreement, other than a
breach or noncompliance that would not materially affect Citicasters' benefits
under the Jacor Shareholders Agreement.
The right to terminate the Merger Agreement and receive a maximum of $75.0
million pursuant to a draw on the Letter of Credit is Citicasters' exclusive
remedy unless the Merger has not been consummated, Citicasters has not
terminated the Merger Agreement, and Citicasters believes that Jacor wilfully
breached the Merger Agreement. In that case, Citicasters may choose to
irrevocably waive the right to draw on the Letter of Credit and instead bring an
action against Jacor or its affiliates for such alleged wilful breach of the
Merger Agreement.
AMENDMENT; WAIVER. The Merger Agreement may be amended, modified or
supplemented, but only in writing signed by Jacor, Acquisition Corp. and
Citicasters; provided, however, that no amendment may be made that would
adversely change the Merger Consideration payable to the Citicasters
shareholders without the further approval of such shareholders. No waiver by a
party of any condition or of any breach of any term, covenant, representation or
warranty contained in the Merger Agreement shall be effective unless in writing,
and no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any such condition or breach in other instances or a waiver
of any other condition or breach of any other term, covenant, representation or
warranty.
EXPENSES. Except for certain filing fees required under the HSR Act and by
the Commission and the FCC and certain expenses incurred in connection with the
printing and mailing of this Proxy Statement/ Information Statement/Prospectus
(which filing fees and expenses shall be shared equally by Jacor and
Citicasters), the Merger Agreement provides that each party thereto will pay its
own expenses in connection with the Merger.
DESCRIPTION OF JACOR WARRANTS
GENERAL. The Jacor Warrants are to be issued under the Warrant Agreement.
The description of the Warrant Agreement set forth below includes all material
elements of the Warrant Agreement but does not purport to be complete and is
qualified in its entirety by reference to the Warrant Agreement which is
attached as Annex IV to this Proxy Statement/Information Statement/Prospectus
and is incorporated by reference herein.
Each Jacor Warrant initially will entitle the holder thereof to purchase a
fractional share of Jacor Common Stock (which fraction, the numerator of which
is 4,400,000 and the denominator of which is the number of shares of Citicasters
Common Stock, on a fully diluted basis, outstanding on the date of the Closing,
is currently anticipated to be .2035247) at a price of $28.00 per full share of
Jacor Common Stock, such exercise price to be reduced to $26.00 if the Merger is
not consummated prior to October 1, 1996 (the "Warrant Price"). The Warrant
Price and the number of shares of Jacor Common Stock issuable upon the
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exercise of each Jacor Warrant will be subject to adjustment in certain events
described below. Each Jacor Warrant may be exercised on or after the issuance
thereof and until 5:00 pm., Eastern Time, on the fifth anniversary of the date
of the Effective Time (the "Expiration Date") in accordance with the terms of
the Jacor Warrants and the Warrant Agreement. To the extent that any Jacor
Warrant remains outstanding after such time, such unexercised Jacor Warrant will
automatically terminate.
EXERCISE. Jacor Warrants may be exercised by surrendering to the Warrant
Agent a signed Jacor Warrant certificate together with the form of election to
purchase on the reverse thereof indicating the Jacor warrantholder's election to
exercise all or a portion of the Jacor Warrants evidenced by such certificate.
Surrendered certificates must be accompanied by payment of the aggregate Warrant
Price in respect of the Jacor Warrants to be exercised, which payment may 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 payable to the order of Jacor. No adjustments as to cash dividends with
respect to the Jacor Common Stock will be made upon any exercise of Jacor
Warrants.
If fewer than all the Jacor Warrants evidenced by any certificate are
exercised, the Warrant Agent will deliver to the exercising warrantholder a new
Jacor Warrant certificate representing the unexercised Jacor Warrants. Jacor
will not be required to issue fractional shares of Jacor Common Stock upon
exercise of any Jacor Warrant and in lieu thereof will pay in cash an amount
equal to the closing price per share of Jacor Common Stock on the trading day
immediately preceding the date the Jacor Warrant is presented for exercise,
multiplied by such fraction. Jacor has reserved for issuance a number of shares
of Jacor Common Stock sufficient to provide for the exercise of the rights of
purchase represented by the Jacor Warrants.
A Jacor Warrant may not be exercised in whole or in part if in the
reasonable opinion of counsel to Jacor the issuance of Jacor Common Stock upon
such exercise would cause Jacor to be in violation of the Communications Act or
the rules and regulations in effect thereunder.
ANTIDILUTION AND EXERCISE PRICE ADJUSTMENTS. The number of shares of Jacor
Common Stock purchasable upon the exercise of each Jacor Warrant and the Warrant
Price are subject to adjustment in connection with (i) the issuance of a stock
dividend to holders of Jacor Common Stock, a combination or subdivision or
issuance by reclassification of Jacor Common Stock; (ii) the issuance of rights,
options or warrants to all holders of Jacor Common Stock without charge to such
holders to subscribe for or purchase shares of Jacor Common Stock at a price per
share which is lower than the current market price; and (iii) certain
distributions by Jacor to the holders of Jacor Common Stock of evidences of
indebtedness or of its assets (excluding cash dividends or distributions out of
earnings or out of surplus legally available for dividends) or of convertible
securities, all as set forth in the Warrant Agreement. Notwithstanding the
foregoing, no adjustment in the number of Warrant Shares will be required 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 Jacor
Warrant. In addition, Jacor may at its option reduce the Warrant Price to any
amount deemed appropriate by the Jacor Board.
In case of any consolidation or merger of Jacor with or into another
corporation, or any sale, transfer or lease to another corporation of all or
substantially all the property of Jacor, the Warrant Agreement will require that
effective provisions will be made so that each holder of an outstanding Jacor
Warrant will have the right thereafter to exercise the Jacor Warrant for the
kind and amount of securities and property receivable in connection with such
consolidation, merger, sale, transfer or lease by a holder of the number of
shares of Jacor Common Stock for which such Jacor Warrant were exercisable
immediately prior thereto. In addition, if Jacor takes any action prior to the
issuance of the Jacor Warrants that would have required an adjustment in the
exercise price of the Jacor Warrants or in the number of shares purchasable upon
exercise of the Jacor Warrants, then the exercise price of the Jacor Warrants or
such number of shares will be adjusted upon issuance of the Jacor Warrants to
give effect to the adjustment which would have been required as a result of such
action.
MODIFICATION OF WARRANT AGREEMENT. The Warrant Agreement may be amended or
supplemented without the consent of the holders of Jacor Warrants to cure any
ambiguity or to correct or supplement any defective or inconsistent provision
contained therein, or to make such other necessary or desirable changes which
shall not adversely affect the interests of the warrantholders. Any other
amendment to the Warrant
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Agreement shall require the consent of warrantholders representing not less than
50% of the Jacor Warrants then outstanding provided that no change in the number
or nature of the securities purchasable upon the exercise of any Jacor Warrant,
or the Warrant Price therefor, or the acceleration of the Expiration Date, and
no change in the antidilution provisions which would adversely affect the
interests of the holders of Jacor Warrants, shall be made without the consent of
the holder of such Jacor Warrant, other than such changes as are specifically
prescribed by the Warrant Agreement or are made in compliance with applicable
law.
FORM AND DENOMINATIONS. The certificates representing the Jacor Warrants
will be in registered form. Any Jacor Warrant certificate may be transferred,
split up, combined or exchanged for another Jacor Warrant certificate or
certificates entitling the holder thereof to purchase a like number of shares of
Jacor Common Stock on the same terms as the Jacor Warrant certificate or
certificates surrendered.
OFFICE FOR PRESENTATION. Jacor Warrants may be presented upon exercise, or
for registration of transfer or exchange, at the office of the Warrant Agent
maintained for such purpose, which office is currently located at 4900 Tiedeman
Road, Cleveland, Ohio 44144.
CERTAIN TAXES. Jacor will bear the cost of all documentary stamp taxes
payable in connection with the initial issuance of Warrant Shares (as defined in
the Warrant Agreement) upon the exercise of Jacor Warrants, but will not be
responsible for the payment of any such taxes in respect of any transfer
involved in the issue or delivery of any Jacor Warrants or certificates for
Warrant Shares in a name other than that of the registered holder of Jacor
Warrants in respect of which such Warrant Shares are issued.
MISCELLANEOUS. No holder of Jacor Warrants shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Jacor Common Stock
until such Jacor Warrants are properly exercised as provided in the Warrant
Agreement.
FINANCING ARRANGEMENTS
THE OFFERINGS. Jacor expects that the funds necessary to pay the Cash
Consideration will be obtained from the sale of 11,250,000 shares of Jacor
Common Stock, the sale of $226.0 million aggregate principal amount at maturity
of LYONs and the sale by JCAC of $100.0 million aggregate principal amount of
Notes. Jacor intends to use a portion of the net proceeds from the Offerings,
together with anticipated borrowings by JCAC under the New Credit Facility to
finance the Merger and the remaining purchase price of the Noble Acquisition and
for general corporate purposes, including working capital. Jacor has used $196.5
million of proceeds from the Offerings to repay all outstanding indebtedness
under the Existing Credit Facility.
Net proceeds of approximately $497.8 million from the Offerings were
obtained on June 12, 1996 at the closings of the Offerings and the execution of
the credit agreement creating the New Credit Facility occurred simultaneously
with those closings. If the underwriters exercise their over-allotment option in
the 1996 Stock Offering, Jacor could obtain additional net proceeds of
approximately $45.5 million. On June 20, 1996, the underwriter for the LYONs
Offering informed Jacor that it has exercised its over-allotment option, and
Jacor expects to obtain additional net proceeds of approximately $14.6 million
upon the over-allotment closing which is scheduled for June 25, 1996. A
condition to the initial borrowing under the New Credit Facility is the
consummation of the Merger prior to January 1, 1997. In addition, the Notes are
subject to repurchase by Jacor if the Merger is not consummated prior to January
1, 1997. See "RISK FACTORS--Pending Acquisitions" and "THE MERGER--Financing
Arrangements--The Senior Subordinated Notes Due 2006."
EXISTING CREDIT FACILITY. Jacor's existing credit facility ("Existing Credit
Facility") is provided by a syndicate of banks and other financial institutions
pursuant to a credit agreement. The Existing Credit Facility provides up to
$300.0 million of loans to Jacor in two components: (i) a $190.0 million
revolving portion with mandatory quarterly commitment reductions beginning on
March 31, 1997 and a final maturity date of December 31, 2003; and (ii) a $110.0
million revolving portion with scheduled quarterly reductions beginning on March
31, 1998 and ending on December 31, 2003.
Borrowings under the Existing Credit Facility bear interest at rates that
fluctuate with a bank base rate and/or the Eurodollar rate.
The loans under the Existing Credit Facility are guaranteed by each of
Jacor's direct and indirect subsidiaries other than certain immaterial
subsidiaries. Jacor's obligations with respect to the Existing Credit
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Facility and each guarantor's obligations with respect to the related guaranty
are secured by substantially all of their respective assets, including, without
limitation, inventory, equipment, accounts receivable, intercompany debt and, in
the case of Jacor's subsidiaries, capital stock.
The Existing Credit Facility contains covenants and provisions that
restrict, among other things, Jacor's ability to: (i) incur additional
indebtedness; (ii) incur liens on its property; (iii) make investments and
advances; (iv) enter into guarantees and other contingent obligations; (v) merge
or consolidate with or acquire another person or engage in other fundamental
changes; (vi) engage in certain sales of assets; (vii) make capital
expenditures; (viii) enter into leases; (ix) engage in certain transactions with
affiliates; and (x) make restricted junior payments. The Existing Credit
Facility also requires the satisfaction of certain financial performance
criteria (including a consolidated interest coverage ratio, a
leverage-to-operating cash flow ratio and a consolidated operating cash flow
available for fixed charges ratio) and the repayment of loans under the Existing
Credit Facility with proceeds of certain sales of assets and debt or equity
issuances, and with 50% of Jacor's Excess Cash Flow (as defined in the Existing
Credit Facility).
The Existing Credit Facility provides for certain customary events of
default, including a Change of Control (as defined in the Existing Credit
Facility).
NEW CREDIT FACILITY. JCAC has entered into the New Credit Facility with a
syndicate of banks and other financial institutions. A condition to the initial
borrowing under the New Credit Facility is the consummation of the Merger prior
to January 1, 1997; the New Credit Facility will expire in the event the Merger
is not consummated prior to January 1, 1997. See "RISK FACTORS--Pending
Acquisitions." The New Credit Facility provides availability of up to $600.0
million of loans to JCAC in three components: (i) a revolving credit facility of
up to $200.0 million with mandatory semi-annual commitment reductions beginning
on the third anniversary of the closing of the New Credit Facility and a final
maturity date of seven years after initial funding; (ii) a term loan of up to
$300.0 million with scheduled semi-annual reductions beginning on the second
anniversary of the closing of the New Credit Facility and a final maturity date
of seven years after initial funding; and (iii) a tranche B term loan of up to
$100.0 million with scheduled semi-annual reductions beginning on the third
anniversary of the closing of the New Credit Facility and a final maturity date
of eight years after initial funding. JCAC may elect to use the New Credit
Facility to purchase the Citicasters Notes (as defined herein) tendered pursuant
to a Change of Control Offer (as defined in the Citicasters Note Indenture).
Borrowings under the New Credit Facility will bear interest at rates that
fluctuate with a bank base rate and/or the Eurodollar rate.
Loans under the New Credit Facility will be guaranteed by each of Jacor's
direct and indirect subsidiaries other than certain immaterial subsidiaries.
Jacor's obligations with respect to the New Credit Facility and each guarantor's
obligations with respect to the related guaranty will be secured by
substantially all of their respective assets, including, without limitation,
inventory, equipment, accounts receivable, intercompany debt and, in the case of
Jacor's subsidiaries, capital stock. JCAC's obligations under the New Credit
Facility will be secured by a first priority lien on the capital stock of
Jacor's subsidiaries.
The New Credit Facility contains covenants and provisions that restrict,
among other things, Jacor's ability to: (i) incur additional indebtedness; (ii)
incur liens on its property; (iii) make investments and advances; (iv) enter
into guarantees and other contingent obligations; (v) merge or consolidate with
or acquire another person or engage in other fundamental changes; (vi) engage in
certain sales of assets; (vii) make capital expenditures; (viii) enter into
leases; (ix) engage in certain transactions with affiliates; and (x) make
restricted junior payments. The New Credit Facility also requires the
satisfaction of certain financial performance criteria (including a consolidated
interest coverage ratio, a leverage-to-operating cash flow ratio and a
consolidated operating cash flow available for fixed charges ratio) and the
repayment of loans under the New Credit Facility with proceeds of certain sales
of assets and debt issuances, and with 50% of the Company's Consolidated Excess
Cash Flow (as defined in the New Credit Facility).
Events of default under the New Credit Facility include various events of
default customary for such type of agreement, such as failure to pay scheduled
payments when due, cross defaults on other indebtedness, change of control
events under other indebtedness (including the LYONs, the Notes and the
Citicasters
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Notes) and certain events of bankruptcy, insolvency and reorganization. In
addition, the New Credit Facility includes events of default for JCAC and the
cessation of any lien on any of the collateral under the New Credit Facility as
a perfected first priority lien and the failure of Zell/Chilmark appointees to
represent at least 30% of the Jacor Board of Directors.
For purposes of the New Credit Facility, a change of control includes the
occurrence of any event that triggers a change of control under the LYONs, the
Notes or the Citicasters Notes. Such change of control under the New Credit
Facility would constitute an event of default which would give the syndicate the
right to accelerate the unpaid principal amounts due under the New Credit
Facility. Upon such acceleration, there is no assurance that JCAC will have
funds available to fund such repayment or that such funds will be available or
terms acceptable to JCAC.
THE CITICASTERS NOTES DUE 2004. The 9 3/4% Senior Subordinated Notes due
2004 (the "Citicasters Notes") are general unsecured obligations of Citicasters
and are subordinated in rights of payment to all Senior Indebtedness (as defined
in the Citicasters Note Indenture). The Citicasters Notes were issued pursuant
to an Indenture between Citicasters and Shawmut Bank Connecticut, National
Association, as Trustee (the "Citicasters Note Indenture").
The December 31, 1995 aggregate outstanding principal amount of the
Citicasters Notes is $122.5 million and the Citicasters Notes mature on February
15, 2004. Interest on the Citicasters Notes accrues at the rate of 9 3/4% per
annum.
The Citicasters Notes are not redeemable at Citicasters' option before
February 15, 1999 (other than in connection with certain public offerings of
Citicasters Common Stock, as described below). Thereafter, the Citicasters Notes
are subject to redemption at the option of Citicasters, at redemption prices
declining from 104.875% of the principal amount for the twelve months commencing
February 15, 1999 to 100.00% on and after February 15, 2002, plus, in each case,
accrued and unpaid interest thereon to the applicable redemption date.
In addition, at any time on or before February 15, 1999, (i) up to 25% of
the aggregate principal amount of the Citicasters Notes may be redeemed at a
redemption price of 108.75% of the principal amount thereof, plus accrued and
unpaid interest, out of the net proceeds of public offerings of primary shares
of Citicasters Common Stock, and after giving effect to such redemption at least
$100.0 million in Citicasters Notes remains outstanding and (ii) upon a Change
of Control (as defined in the Citicasters Note Indenture), the Citicasters Notes
can be redeemed provided at least $100.0 million of Citicasters Notes remain
outstanding and such redemption occurs within 180 days of the date of a Change
of Control. In addition, prior to December 31, 1996, Citicasters can redeem the
Citicasters Notes from the proceeds of Asset Sales (as defined in the
Citicasters Note Indenture) subject to certain restrictions.
Within 60 days after any Change of Control, Citicasters or its successor
must make an offer to purchase the Citicasters Notes at a purchase price equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest to the date of purchase. The Merger will constitute a Change of
Control. Any Citicasters Notes which are not acquired in connection with such
Change of Control offer, subject to the successor's right to redeem the
Citicasters Notes as described above, will remain outstanding. Subsequent to the
consummation of the Merger, the definition of change of control under the
indenture governing the Citicasters Notes will be substantially similar to the
definition of change of control in the Indenture governing the Notes. Jacor will
comply with the requirements of Rule 14e-1 in connection with the repurchase of
the Citicasters Notes, as such rule might apply to any such repurchase at the
time thereof.
The Citicasters Note Indenture contains certain covenants which impose
certain limitations and restrictions on the ability of Citicasters to incur
additional indebtedness, pay dividends or make other distributions, make certain
loans and investments, apply the proceeds of Asset Sales (and use the proceeds
thereof), create liens, enter into certain transactions with affiliates, merge,
consolidate or transfer substantially all its assets, and make investments in
unrestricted subsidiaries.
The Indenture for the Citicasters Notes includes various events of default
customary for such type of agreements, such as failure to pay principal and
interest when due on the Citicasters Notes, cross defaults on other indebtedness
and certain events of bankruptcy, insolvency and reorganization.
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THE 10 1/8 SENIOR SUBORDINATED NOTES DUE 2006. Concurrently with the
consummation of the 1996 Stock Offering and the LYONs Offering, Jacor and JCAC
consummated the Notes Offering. JCAC intends to lend the net proceeds to Jacor
in connection with the financing for the Acquisitions.
The Notes due 2006 will mature on June 15, 2006. The Notes will bear
interest at the rate per annum of 10 1/8% from the date of issuance or from the
most recent interest payment date to which interest has been paid or provided
for, payable semi-annually on June 15 and December 15 of each year, commencing
December 15, 1996, to the persons in whose names such Notes are registered at
the close of business on the June 1 or December 1 immediately preceding such
interest payment date. Interest will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. The trustee under the indenture for the
Senior Subordinated Notes (the "Senior Subordinated Note Indenture")
authenticated and delivered the Notes for original issue in an aggregate
principal amount of $100.0 million.
The Notes are not redeemable at JCAC's option before June 15, 2001.
Thereafter, the Notes are subject to redemption at the option of JCAC, at
redemption prices declining from 105.063% of the principal amount for the twelve
months commencing June 15, 2001 to 100% on and after June 15, 2004, plus in each
case, accrued and unpaid interest thereon to the applicable redemption date.
Notwithstanding the foregoing, in the event that the Merger has not become
effective prior to March 15, 1997, JCAC may redeem the Notes at a redemption
price equal to 102% of the principal amount thereof, in each case plus accrued
and unpaid interest, if any, to the redemption date; provided that such
redemption, if made, must occur within 35 days of March 15, 1997.
The Senior Subordinated Note Indenture contains certain covenants which
impose certain limitations and restrictions on the ability of Jacor to incur
additional indebtedness, pay dividends or make other distributions, make certain
loans and investments, apply the proceeds of asset sales (and use the proceeds
thereof), create liens, enter into certain transactions with affiliates, merge,
consolidate or transfer substantially all its assets and make investments in
unrestricted subsidiaries.
If a change of control occurs, JCAC is required to offer to repurchase all
outstanding Notes at a price equal to 101% of their principal amount, plus
accrued and unpaid interest, if any, to the date of repurchase. There can be no
assurance that JCAC will have sufficient funds to purchase all of the Notes in
the event of a change of control offer or that JCAC would be able to obtain
financing for such purpose on favorable terms, if at all. In addition, the New
Credit Facility restricts JCAC's ability to repurchase the Notes, including
pursuant to a change of control offer. Furthermore, a change of control under
the Senior Subordinated Note Indenture will result in a default under the New
Credit Facility.
Upon consummation of the Merger, a Change of Control under the indenture
governing the Notes means any transaction or series of transactions in which any
of the following occurs: (i) any person or group (within the meaning of Rule
13d-3 under the Exchange Act and Sections 13(d) and 14(d) of the Exchange Act),
other than Zell/Chilmark or any of its Affiliates, becomes the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
(A) greater than 50% of the total voting power (on a fully diluted basis as if
all convertible securities had been converted) entitled to vote in the election
of directors of JCAC or Citicasters, or the surviving person (if other than the
Company), or (B) greater than 20% of the total voting power (on a fully diluted
basis as if all convertible securities had been converted) entitled to vote in
the election of directors of JCAC or Citicasters, or the surviving person (if
other the JCAC), and such person or group has the ability to elect, directly or
indirectly, a majority of the members of the Board of Directors of JCAC; or (ii)
JCAC or Citicasters consolidates with or merges into another person, another
person consolidates with or merges into JCAC or Citicasters, JCAC or Citicasters
issues shares of its Capital Stock or all or substantially all of the assets of
JCAC or CC are sold, assigned, conveyed, transferred, leased or otherwise
disposed of to any person as an entirety or substantially as an entirety in one
transaction or a series of related transactions and the effect of such
consolidation, merger, issuance or sale is as described in clause (i) above.
Additionally, in the event the Merger has not become effective prior to
January 1, 1997, JCAC is required to make an offer to repurchase the Notes at a
price equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase (the "Nonconsummation
Offer"). There can be no assurance that JCAC will have sufficient funds to
purchase all of the Notes in the
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event of a Nonconsummation Offer or that JCAC would be able to obtain financing
for such purpose on favorable terms, if at all. JCAC currently has no material
assets or operations. Upon consummation of the Merger, however, Jacor will,
directly or indirectly, contribute, convey, or transfer all of the equity
interests of its wholly owned subsidiaries to JCAC.
Events of default under the Senior Subordinated Note Indenture include
various events of default customary for such type of agreement, including the
failure to pay principal and interest when due on the Notes, cross defaults on
other indebtedness for borrowed monies in excess of $5.0 million (which
indebtedness therefore includes the Existing Credit Facility, the New Credit
Facility, the LYONs and the Citicasters Notes) and certain events of bankruptcy,
insolvency and reorganization.
THE LYONS DUE 2011. Concurrently with the consummation of the 1996 Stock
Offering and the Notes Offering, Jacor consummated the LYONs Offering whereby
Jacor issued and sold LYONs due June 12, 2011 in the aggregate principal amount
at maturity of $226.0 million (excluding $33.9 million aggregate principal
amount at maturity subject to the over-allotment option). Each LYON had an Issue
Price of $443.4 and has a principal amount at maturity of $1,000.
Each LYON is convertible, at the option of the holder, at any time on or
prior to maturity, unless previously redeemed or otherwise purchased, into
Common Stock at a conversion rate of 13.412 shares per LYON. The conversion rate
will not be adjusted for accrued original issue discount, but is subject to
adjustment upon the occurrence of certain events affecting the Common Stock.
Upon conversion, the holder will not receive any cash payment representing
accrued original issue discount; such accrued original issue discount will be
deemed paid by the Common Stock received by the holder on conversion.
The LYONs are not be redeemable by Jacor prior to June 12, 2001. Thereafter,
the LYONs are redeemable for cash at any time at the option of Jacor, in whole
or in part, at redemption prices equal to the issue price plus accrued original
issue discount to the date of redemption.
The LYONs will be purchased by Jacor, at the option of the holder, on June
12, 2001 and on June 12, 2006 for a Purchase Price of $581.25 and $762.39
(representing issue price plus accrued oringinal issue discount to each date),
respectively, representing a 5.50% yield per annum to the Holder on such date,
computed on a semiannual bond equivalent basis. Jacor, at its option, may elect
to pay the purchase price on any such purchase date in cash or Jacor Common
Stock, or any combination thereof. In addition, as of 35 business days after the
occurrence of a change in control of Jacor occurring on or prior to June 12,
2001, each LYON will be purchased for cash, by Jacor, at the option of the
holder, for a change in control purchase price equal to the issue price plus
accrued original issue discount to the change in control purchase date set for
such purchase. The change in control purchase feature of the LYONs may in
certain circumstances have an anti-takeover effect.
Under the indenture for the LYONs (the "LYONs Indenture"), a "Change in
Control" of Jacor is deemed to have occurred at such time as (i) any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) other than Zell/Chilmark, Jacor, any subsidiary of Jacor, or any
employee benefit plan of either Jacor or any Subsidiary of Jacor, files a
Schedule 13D or 14D-1 under the Exchange Act (or any successor schedule, form or
report) disclosing that such person has become the beneficial owner of 50% or
more of the Common Stock or other capital stock of Jacor into which such Common
Stock is reclassified or changed, with certain exceptions, or (ii) there shall
be consummated any consolidation or merger of Jacor (a) in which Jacor is not
the continuing or surviving corporation or (b) pursuant to which the Common
Stock would be converted into cash, securities or other property, in each case,
other than a consolidation or merger of Jacor in which the holders of Common
Stock immediately prior to the consolidation or merger own, directly or
indirectly, at least a majority of Common Stock of the continuing or surviving
corporation immediately after the consolidation or merger. A Change of Control
under the LYONs Indenture constitutes an event of default under the New Credit
Facility. See "-- New Credit Facility."
The LYONs Indenture includes various events of default customary for such
type of agreement, such as cross defaults on other indebtedness for borrowed
monies in excess of $10.0 million (which indebtedness therefore includes the
Existing Credit Facility, the New Credit Facility, the Notes and the Citicasters
Notes)
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and certain events of bankruptcy, insolvency and reorganization. A change of
control under the indenture which governs each of the Notes, the Citicasters
Notes and the LYONs will result in a default under the New Credit Facility.
Additionally, unless JCAC is successful in seeking consents from its lenders
under the New Credit Facility to permit change of control repurchase offers for
each of the Notes, the Citicasters Notes or the LYONs or JCAC is successful in
refinancing such borrowings, such event of default under the New Credit Facility
constitutes an event of default under each of the Notes, the Citicasters Notes
and the LYONs. Such events of default could result in the immediate acceleration
of all then outstanding indebtedness under each of the Notes, Citicasters Notes
and LYONs. As a result, differences in the definitions of change of control
under the indentures for the Notes and the Citicasters Notes and the LYONs will
not have a difference in the effect on JCAC or the respective holders other than
where the lenders under the New Credit Facility have waived such event of
default. In the event of such waiver there could be a change of control under
the Notes and the Citicasters Notes which would not result in a change of
control under the LYONs or VICE VERSA.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendations of the Jacor Board and the Citicasters
Board with respect to the Merger, shareholders should be aware that certain
members of Citicasters' management and the Citicasters Board (as well as other
employees of Citicasters) have certain interests described below that may
present them with actual or potential conflicts of interest in connection with
the Merger. Each of the Jacor Board and Citicasters Board was aware of these
interests and considered them, among other matters, in approving the Merger
Agreement and the transactions contemplated thereby.
EMPLOYMENT CONTINUATION AGREEMENTS. The Merger Agreement provides that
within sixty days after the execution of the Merger Agreement, Citicasters will
offer to enter into Employment Continuation Agreements with Gregory C. Thomas,
Executive Vice President and Chief Financial Officer of Citicasters, and certain
senior managers of Citicasters. The Employment Continuation Agreement for Mr.
Thomas, which becomes operative upon a Change in Control (which, as defined
therein, includes the Merger), provides that Citicasters will continue to employ
Mr. Thomas for a period of two years, commencing on the date of the occurrence
of a Change in Control. Under the Employment Continuation Agreement, Mr. Thomas
will receive annual compensation of $335,000 and certain employee benefits that
are available generally to other executives of Citicasters after the Effective
Time. Mr. Thomas will receive certain severance benefits if (i) he is terminated
other than for cause (as defined in the Employment Continuation Agreement) or
permanent disability or (ii) during the sixty-day period immediately following a
Change in Control, he declines or terminates Citicasters' offer of continued
employment. The Employment Continuation Agreements for Citicasters senior
managers, which also become operative upon a Change in Control, have the same
term, compensation and benefit arrangements as Mr. Thomas' agreement, but
provide that such senior managers will receive certain severance benefits if
during the term of their respective agreements (i) they are terminated other
than for cause or permanent disability, or (ii) if the nature or scope of their
employment suffers a significant adverse change. In addition, certain senior
managers are entitled to such severance payments only so long as he or she
complies with certain noncompetition and nonsolicitation provisions set forth in
their respective Employment Continuation Agreements. The aggregate payments
offered to senior managers under the Employment Continuation Agreements are
$6.73 million.
CITICASTERS STOCK OPTIONS. The Merger Agreement provides that prior to the
Effective Time, Citicasters will use its reasonable best efforts to (i) cause
all 1,611,437.5 outstanding options to purchase shares of Citicasters Common
Stock (each, an "Option") issued pursuant to Citicasters' 1993 Stock Option Plan
or 1994 Directors Stock Option Plan (collectively, the "Stock Option Plans") to
become fully vested and exercisable and (ii) obtain from each holder of any
Option an agreement, in form and substance reasonably satisfactory to Jacor, to
surrender as of the Effective Time all outstanding Options, in consideration of
the payment at the Effective Time of an amount of cash per share subject to each
such Option equal to the difference between the exercise price of such Option
and the Cash Consideration (less an amount equal to all taxes required to be
withheld from such payment), plus for each share subject to such Option, the
Warrant Consideration, or, alternatively, acquire upon payment of the exercise
price an amount of cash equal to the Cash Consideration (less an amount equal to
all taxes required to be withheld) in lieu of each share of Citicasters Common
Stock formerly covered thereby, plus for each share covered by such Option, the
Warrant Consideration.
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Pursuant to the foregoing treatment of the Options, Options to acquire an
aggregate of 90,000 shares of Citicasters Common Stock at $10.33 per share and
Options to acquire an aggregate of 7,500 shares of Citicasters Common Stock at
$25.50 per share held by the directors of Citicasters, which were previously
unvested and unexercisable at the time the Merger Agreement was entered into,
will become immediately vested and exercisable. In addition, Options to acquire
an aggregate of 327,375 shares of Citicasters Common Stock at $6.67 per share
and Options to acquire an aggregate of 135,000 shares of Citicasters Common
Stock at $9.77 per share held by the executive officers of Citicasters, which
were previously unvested and unexercisable at the time the Merger Agreement was
entered into, will become immediately vested and exercisable. The surrender of
all outstanding Options in consideration of the payment at the Effective Time of
the Cash Consideration and the Warrant Consideration will result in aggregate
cash payments of $34.3 million and the issuance of Jacor Warrants for
approximately 328,000 shares of Jacor Common Stock.
As a result of the foregoing, each director of Citicasters (except John P.
Zanotti) shall receive Cash Consideration of $437,325 and 4,885 Jacor Warrants.
The executive officers of Citicasters, Messrs. John P. Zanotti, Gregory C.
Thomas and Samuel J. Simon, shall receive Cash Consideration of $12,493,125,
$2,206,913 and $1,086,019, respectively, and 114,483, 20,607 and 10,303 Jacor
Warrants, respectively. See "The Merger -- Interests of Certain Persons in the
Merger."
INDEMNIFICATION. The Merger Agreement provides that Jacor will, for not less
than six years following the Effective Time, indemnify and hold harmless each
present and former director, officer, agent and employee of Citicasters and its
subsidiaries ("Indemnified Parties") from and against any and all claims arising
out of or in connection with activities in such capacity, or on behalf of, or at
the request of, Citicasters, its subsidiaries or their affiliates, and will
advance expenses incurred with respect to the foregoing, as they are incurred,
to the fullest extent permitted by applicable law; PROVIDED, HOWEVER, that if
any claim or claims are asserted or made within such six-year period, all rights
to indemnification in respect of such claims will continue until the final
disposition of any and all such claims.
Jacor is further obligated by the Merger Agreement to cause Citicasters to
keep in effect provisions in the Citicasters Restated Articles of Incorporation
and By-laws providing for exculpation of director and officer liability and its
indemnification of or advancement of expenses to the Indemnified Parties to the
fullest extent permitted under the FBCA, which provisions shall not be amended
except as required by applicable law or except to make changes permitted by law
that would enhance the Indemnified Parties' right of indemnification or
advancement of expenses. If, after the Effective Time, Jacor 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 Jacor assume all of Jacor's
foregoing indemnity obligations.
REGISTRATION RIGHTS. Pursuant to the Stockholders Agreement, Jacor has
agreed to enter into an agreement prior to the closing of the Merger providing
for the shelf registration of resale of the Jacor Warrants and the underlying
shares of Jacor Common Stock to be issued to the Consenting Stockholders as part
of the Merger Consideration. Such agreement is anticipated to have terms and
conditions customary for transactions of such nature.
REGULATORY MATTERS
The receipt of certain federal and state governmental or regulatory
approvals are required in order to consummate the Merger, including the approval
of the FCC, and the expiration or termination of the applicable waiting period
under the HSR Act. Jacor and Citicasters have agreed in the Merger Agreement to
use all reasonable efforts to obtain such approvals or waivers, but there can be
no assurance as to when or if such approvals or waivers will be obtained. See
"RISK FACTORS--Pending Acquisitions."
FCC OWNERSHIP RULES. Rules of the FCC limit the number and location of
broadcast stations in which one licensee (or any party with a control position
or attributable ownership interest therein) may have an attributable interest.
The "national radio ownership rule" had generally prohibited any one
non-minority individual or entity from having a control position or attributable
ownership interest in more than 20 AM or
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more than 20 FM radio stations nationwide. The Telecom Act directs the FCC to
modify its rules to eliminate any provisions limiting the number of radio
stations which may be owned or controlled by one entity nationally. The FCC
adopted this rule change by an order which became effective on March 15, 1996.
Consequently, there now is no limit imposed by the FCC to the number of radio
stations one party may own nationally.
The "local radio ownership rule" limits the number of stations in a radio
market in which any one individual or entity may have a control position or
attributable ownership interest. The local radio ownership rule had provided for
markets with 15 or more radio stations, a limit of two AMs and two FMs, provided
generally that the combined audience shares of the co-owned stations did not
exceed 25% of the radio ratings market at the time of acquisition. The Telecom
Act directs the FCC to revise its rules to increase the local radio ownership
limits as follows: (a) in markets with 45 or more commercial radio stations, a
party may own up to eight commercial radio stations, no more than five of which
are in the same service (AM or FM); (b) in markets with 30-44 commercial radio
stations, the limit is seven commercial radio stations, no more than four of
which are in the same service; (c) in markets with 15-29 commercial radio
stations, the limit is six commercial radio stations, no more than four of which
are in the same service; and (d) in markets with 14 or fewer commercial radio
stations, a party may own up to five commercial radio stations, no more than
three of which are in the same service, provided that no party may own more than
50% of the commercial stations in the market. The FCC adopted these changes to
the local radio ownership rule by an order which became effective on March 15,
1996. In addition, the FCC has a "cross interest" policy that may prohibit a
party with an attributable interest in one station in a market from also holding
either a "meaningful" non-attributable equity interest (e.g., non-voting stock,
voting stock, limited partnership interests) or key management position in
another station in the same market, or which may prohibit local stations from
combining to build or acquire another local station. The FCC is presently
evaluating its cross-interest policy as well as policies governing attributable
ownership interests. Jacor cannot predict whether the FCC will adopt any changes
in these policies or, if so, what the new policies will be.
The rules also generally prohibit the acquisition of an ownership or control
position in a television station and one or more radio stations serving the same
market (termed the "one-to-a-market" rule). Current FCC policy looks favorably
upon waiver requests relating to television and AM/FM radio combinations in the
top 25 television markets where at least 30 separately owned broadcast stations
will remain after the combination. One-to-a-market waiver requests in other
markets, as well as those in the top 25 television markets that involve the
combination of a television station and more than one same service (AM or FM)
radio station, presently are evaluated by the FCC pursuant to a fact-based
five-part, case-by-case review. The FCC also has an established policy for
granting waivers that involve "failed" stations. The FCC currently is
considering changes to its one-to-a-market waiver standards in a pending
rule-making proceeding. The Telecom Act instructs the FCC to extend its top 25
market/30 voices waiver policy to the top 50 markets, consistent with the public
interest, convenience, and necessity. The Telecom Act conferees stated that they
expect the FCC in its future implementation of its current one-to-a-market
waiver policy, as well as in any future changes the FCC may adopt in the pending
rule-making, to take into account increased competition and the need for
diversity in today's radio marketplace. The FCC also plans to review and
possibly modify its current prohibitions relating to ownership or control
positions in a daily newspaper and a broadcast station in the same market.
FCC APPROVALS. On February 22, 1996, Citicasters and Jacor filed an
application (the "Citicasters Transfer Application") with the FCC requesting the
FCC's consent to transfer control of Citicasters Co., which is the FCC licensee
for each of Citicasters' radio and television stations, from the holders of
Citicasters Common Stock to Jacor. Jacor presently owns and/or has time
brokerage agreements with one AM and two FM stations in the Atlanta market, two
AM and two FM stations in the Tampa market and two AM and two FM stations in the
Cincinnati market. The Citicasters Transfer Application provides a technical
statement demonstrating that, pursuant to the FCC's methodology for calculating
market size, the relevant radio market in each of Atlanta, Tampa and Cincinnati
contains more than 45 commercial radio stations, and Jacor would own less than
eight commercial radio stations, and less than five in the same service in each
such radio market. The television stations licensed to Citicasters are in
markets in which Jacor and Citicasters own radio stations. Consequently, the
Citicasters Transfer Application requests waivers pursuant to a five-part,
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case-by-case review of the one-to-a-market rule to permit the permanent
co-ownership of these television and radio stations. The Citicasters Transfer
Application notes that the FCC may choose to grant initially temporary waivers
of the one-to-a-market rule in connection with the transfer of Citicasters to
Jacor and thereafter rule on the permanent waiver requests. If the FCC does not
grant either a permanent or temporary one-to-a-market waiver, but otherwise
consents to the Merger, Jacor could not consummate the Merger unless the
Citicasters television stations or the Citicasters and Jacor radio stations in
the Cincinnati and Tampa markets were assigned to third parties. If divestitures
are required, there can be no assurance that Jacor would be able to obtain full
value for such stations nor that such sales would not have a material adverse
impact upon Jacor's business, financial condition and results of operations. In
such event, Jacor's intention would be to seek reconsideration and/or appellate
court review of the FCC's decision.
The Citicasters Transfer Application has been accepted by the FCC and,
pursuant to the Communications Act and the FCC's rules, interested third parties
could have filed petitions to deny the Citicasters Transfer Application until
April 4, 1996, and thereafter may file informal objections until the Citicasters
Transfer Application is granted. No party has filed a timely petition to deny
or, to Jacor's knowledge, other objection to the Citicasters Transfer
Application. To date, the FCC has not acted on the Citicasters Transfer
Application.
In the event that an opposition against the Citicasters Transfer Application
is filed that raises substantial issues, the FCC would determine on the basis of
the opposition, responses to the opposition that may be filed by Jacor and/or
Citicasters, and such other facts as it may officially notice, whether there
were substantial and material issues of fact that would require an evidentiary
hearing to resolve. In the absence of issues requiring an evidentiary hearing,
and upon a finding that a grant of the Citicasters Transfer Application (and the
associated waivers noted above) would serve the public interest, convenience and
necessity, the FCC, or the FCC's staff acting by delegated authority, will grant
the Citicasters Transfer Application. In the unlikely event that there are any
issues of fact which cannot be resolved without an evidentiary hearing, the FCC
could designate the Citicasters Transfer Application for such a hearing, and the
consummation of the Merger could be jeopardized due to the length of time
ordinarily required to complete such proceedings.
Within thirty days following FCC public notice of such a grant, parties in
interest may file a petition for reconsideration requesting that the FCC (or the
FCC's staff in the case of a staff grant), reconsider its action. Alternatively
in the case of a staff grant, parties in interest may within the same thirty-day
period file an "Application for Review" requesting that the FCC review and set
aside the staff grant. In the event of a staff grant, a party in interest could
take both actions, by first filing a petition for reconsideration with the staff
and later, within thirty days following public notice of the denial of that
petition, filing an Application for Review. In the case of a staff grant, the
FCC may also review the staff action on its own motion within forty days
following public notice of the staff's action. The FCC may review any of its own
actions on its own motion within thirty days following public notice of the
action.
Within thirty days of public notice of an action by the FCC (i) granting the
Citicasters Transfer Application, (ii) denying a petition for reconsideration of
such a grant or (iii) denying an Application for Review of a staff grant,
parties in interest may appeal the FCC's action to the U. S. Court of Appeals
for the District of Columbia Circuit.
In the event that the Citicasters Transfer Application should be denied or
the requested waivers not granted by the FCC or its staff, Jacor and Citicasters
would have the same rights to seek reconsideration or review and to appeal as
set forth above with respect to adverse parties.
If the FCC does not, on its own motion, or upon a request by an interested
party for reconsideration or review, review a staff grant or its own action
within the time periods set forth above, an action by the FCC or its staff
granting the Citicasters Transfer Application would become final. The Merger
Agreement provides that if all other conditions to the Merger are satisfied or
waived, the parties are obligated to consummate the Merger upon the issuance of
an FCC grant of the Citicasters Transfer Application, even if such grant has not
become final.
FCC LICENSE RENEWALS. Applications for regular renewal of the licenses of
Jacor's four Ohio radio stations and of Citicasters' seven Ohio radio stations
were filed with the FCC in May 1996. In normal course,
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such applications would be granted by the end of September 1996. Similar renewal
applications will be due to be filed by October 1, 1996 for Citicasters' Kansas
City radio stations and its Florida television station. Such applications would
normally be granted by the end of January 1997. The licenses of Citicasters'
stations in Phoenix, Sacramento and Portland will not come due for renewal prior
to May 31, 1997.
Except for Jacor's Florida stations and Georgia stations (other than
WGST-FM), whose licenses have been renewed for seven years expiring in 2003, the
current seven-year terms of the broadcasting licenses of all of Jacor's stations
expire in 1996, 1997 and 1998. Jacor does not anticipate any material difficulty
in obtaining license renewals for full terms in the future.
When the FCC considers a proposed transfer of control of an FCC licensee
that holds multiple FCC licenses, some of which licenses are subject to pending
renewal applications, the FCC's past policy has been either to defer action on
the transfer application until the pending renewals have been granted or to
grant the transfer application conditioned on the transfer not being consummated
until the renewals have been granted. The FCC has recently modified that policy
to provide that so long as there are no unresolved issues pertaining to the
qualifications of the transferor or the transferee and so long as the transferee
is willing to substitute itself as the renewal applicant, the FCC will grant a
transfer application for a licensee holding multiple licenses and permit
consummation of the transfer notwithstanding the pendency of renewal
applications for one or several of the licensee's stations. This new policy
should permit the parties to consummate the Merger (assuming satisfaction or
waiver of all other conditions and the FCC's grant of the Citicasters Transfer
Application) during those periods when renewal applications are pending for one
or more Citicasters' stations. It is anticipated that Citicasters will have
renewal applications pending from June 1996 through January 1997 and from June
1997 through January 1998, although these periods could be extended in the event
that the FCC does not grant the subject renewal applications promptly. However,
because the policy is so new, there can be no assurance that further
clarifications of the policy will not make it impossible or inadvisable to
consummate the Merger during such periods. In such event, if the consummation of
the Merger does not occur prior to October 1, 1996, the Cash Consideration to be
paid by Jacor will be increased each month by $.22125 for each issued and
outstanding share of Citicasters Common Stock and the exercise price of the
Jacor Warrants will be reduced from $28.00 to $26.00 per full share of Jacor
Common Stock. In the event that the Merger is not consummated on or before May
31, 1997, Citicasters may terminate the Merger Agreement and draw upon an
irrevocable, direct pay letter of credit obtained by Jacor in the amount of
$75.0 million.
REINCORPORATION OF JACOR. The reincorporation of Jacor as a Delaware
corporation requires prior FCC approval as a corporate restructuring that does
not involve a substantial change in ownership or control. Such approval is
obtained by the filing of a "short-form" assignment application with the FCC.
Such short-form applications do not require public notice or a waiting period
before grant by the FCC. Third parties do not have a right to petition for the
denial of such applications. The FCC typically grants uncontested short-form
applications within two weeks to one month from filing.
ANTITRUST. Certain acquisitions by Jacor of broadcasting companies, radio
station groups or individual radio stations will be subject to review by the
Antitrust Division and the Federal Trade Commission pursuant to the provisions
of the HSR Act. Generally, acquisitions involving assets valued at $15.0 million
or more, and certain acquisitions of voting securities, come within the purview
of the HSR Act. Although it is likely that many proposed acquisitions will not
require the parties to the transaction to comply with the HSR Act, or if such
compliance is required, will result in rapid clearance by the antitrust
agencies, in certain instances, such as is the case with the Acquisitions, the
antitrust agencies may choose to investigate the proposed acquisition,
particularly if it appears that such acquisition will result in substantial
concentration within a specific market. Any decision by an antitrust agency to
challenge a proposed acquisition could affect the ability of Jacor to consummate
the proposed acquisition, or to consummate the acquisition on the proposed
terms.
Under the HSR Act and the rules promulgated thereunder, the Merger may not
be consummated until notifications have been given and certain information has
been furnished to the Antitrust Division and the Federal Trade Commission (the
"FTC") and specified waiting period requirements have been satisfied. Jacor and
Citicasters each filed with the Antitrust Division and the FTC a Notification
and Report Form (the "Notification and Report Form") with respect to the Merger
on February 16, 1996.
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The Antitrust Division and the FTC determine between themselves which agency
is to take a closer look at a proposed transaction. The Antitrust Division or
the FTC, as the case may be, may then issue a formal request for additional
information ("the Second Request"). Under the HSR Act, if a Second Request is
issued, the waiting period then would be extended and would expire at 11:59
p.m., on the twentieth calendar day after the date of substantial compliance by
both parties with such Second Request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with the
consent of the parties. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. On March 15, 1996, the Antitrust Division issued a Second
Request to Jacor and Citicasters.
In format and specifications, the Second Request closely follows the model
routinely used by the Antitrust Division. The Second Request focuses
particularly on the sale of radio advertising time in the Cincinnati area and
does not raise questions regarding the acquisition of Citicasters' Cincinnati TV
station or the Citicasters radio stations in other cities. The Antitrust
Division has expressed concern regarding the possible effect of the Merger in
the Cincinnati market. Jacor believes that the parties have substantially
complied with the Second Request relative to the Merger, and further believes
that the applicable waiting period with respect to the Merger expired on June 9,
1996. The Antitrust Division has expressed concern regarding the possible effect
of the Merger in the Cincinnati market, and the parties to the Merger are having
ongoing discussions with the Antitrust Division to address those concerns.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Merger. At any time before or
after the Jacor Annual Meeting, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the Merger or seeking the
divestiture of substantial assets of Citicasters or its subsidiaries or Jacor or
its subsidiaries.
In addition, state antitrust authorities may also bring legal action under
the antitrust laws. Such action could include seeking to enjoin the consummation
of the Merger or seeking divestiture of certain assets of Jacor or Citicasters.
No state authorities have indicated that they will undertake an investigation of
the Merger. Private parties may also seek to take legal action under the
antitrust laws under certain circumstances. There can be no assurance that a
challenge to the Merger on antitrust grounds will not be made or, if such a
challenge is made, what the result of such challenge may be.
REQUIRED APPROVALS FOR NOBLE ACQUISITION. Jacor's acquisition of Noble also
requires the approval of the FCC and the expiration or termination of the
applicable waiting period under the HSR Act.
On February 8, 1996, Jacor filed an application with the FCC for its consent
to the transfer of control of Noble Broadcast Licenses, Inc. ("Noble Licenses"),
the licensee of ten full-powered radio stations in the Toledo, St. Louis and
Denver markets, from John T. Lynch et al., to Jacor (the "Noble Transfer
Application"). Jacor presently owns two AM and two FM stations in the Denver
market, and Noble presently owns two AM and two FM stations serving the Denver
market. The Noble Transfer Application was granted on March 27, 1996 by the Mass
Media Bureau of the FCC acting pursuant to delegated authority. No party filed
an opposition to the Noble Transfer Application. The FCC issued on April 1,
1996, a public notice of the grant by the Mass Media Bureau. Pursuant to the
Communications Act and the FCC's rules, interested third parties could have
filed petitions for reconsideration of the Noble Transfer Application until May
1, 1996. Third parties that did not object to an application prior to its grant
must establish good cause for filing a petition for reconsideration. The Mass
Media Bureau of the FCC also could have reconsidered the grant of the Noble
Transfer Application on its own motion until May 1, 1996. In addition, the full
FCC on its own motion could have reviewed the Mass Media Bureau grant until May
13, 1996. No such action was taken, so consequently the grant of the Noble
Transfer Application has become "final," that is, the grant is no longer subject
to further administrative or judicial review. Pursuant to the Noble agreement,
however, Jacor at its option may defer the closing until all Noble station
licenses have been renewed and such renewal grants are final.
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On February 26, 1996, Jacor and Noble also each filed with the Antitrust
Division and the FTC a Notification and Report Form with respect to Jacor's
acquisition of Noble's Denver, St. Louis, and Toledo radio stations. On March
29, 1996, the Antitrust Division issued a Second Request to Jacor and Noble.
Jacor believes that the parties completed substantial compliance with the Second
Request relevant to the Noble Acquisition on June 17, 1996, and anticipates that
the applicable waiting period with respect to the Noble Acquisition will expire
on July 7, 1996. In format and specifications, the Second Request closely
follows the model routinely used by the Antitrust Division. The Second Request
focuses particularly on the sale of radio advertising time in the Denver area
and does not raise questions regarding the acquisition of the Noble radio
stations in other cities. Although the Second Request seeks considerable
information, the Antitrust Division has not expressed a substantive view of the
Noble Acquisition to date.
Previously, on February 6, 1996, Jacor and Noble filed a Notification and
Report Form with respect to Jacor's acquisition of Noble as related to the San
Diego radio market, and were granted early termination of the applicable waiting
period under the HSR Act. Promptly following such early termination, Jacor
consummated its purchase of certain assets relating to Noble's San Diego
operations on February 21, 1996. See "THE NOBLE ACQUISITION."
NASDAQ LISTING
Under the Merger Agreement, Jacor has agreed to use its reasonable best
efforts to cause the Jacor Warrants to be listed for trading on the Nasdaq
National Market.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a description of material federal income tax consequences
applicable to holders of Citicasters Common Stock and to holders of options to
acquire Citicasters Common Stock who receive cash and warrants pursuant to the
Merger. Except as otherwise expressly indicated, the following only describes
certain tax consequences to United States persons (E.G., citizens or residents
of the United States and domestic corporations) (a) who hold shares of
Citicasters Common Stock as capital assets and will hold the Jacor Warrants
received in the Merger as capital assets or (b) who hold options to acquire
Citicasters Common Stock that were received in consideration for the performance
of services to Citicasters. It does not discuss the tax consequences that might
be relevant to holders of Citicasters Common Stock or options to acquire
Citicasters Common Stock entitled to special treatment under the federal income
tax law, such as life insurance companies, tax exempt organizations, S
corporations, and taxpayers subject to alternative minimum tax.
Citicasters has been advised by its counsel, Jones, Day, Reavis & Pogue,
that in its opinion the Merger will be a taxable event to holders of Citicasters
Common Stock and to holders of options to acquire Citicasters Common Stock who
receive cash and warrants pursuant to the Merger. Counsel has further advised
Citicasters that it is counsel's opinion that, while the following does not
purport to discuss all tax matters relating to the Merger, the following are
material federal income tax consequences of the Merger, subject to the
qualifications herein.
TAX CONSEQUENCES TO HOLDERS OF CITICASTERS COMMON STOCK. Holders of
Citicasters Common Stock will be treated as if, at the Effective Time, they had
sold each of their shares for cash and a Jacor Warrant. A holder will recognize
capital gain or loss equal to the difference between (a) the cash and the fair
market value, if any, of the Jacor Warrant received and (b) the holder's basis
in Citicasters Common Stock given up in exchange. The tax basis of the Jacor
Warrant received by a holder of Citicasters Common Stock will be the fair market
value of the warrant at the Effective Time. The preceding discussion assumes
that the Closing occurs prior to October 1, 1996.
In the event that the Closing does not occur prior to October 1, 1996, for
each share of Citicasters Common Stock, a holder will receive an additional
amount of $.22125 in cash for each full calendar month ending prior to the
Closing. In this event, the facts and circumstances surrounding the delay in the
Closing may affect the tax character of any additional amount received (I.E.,
whether the additional amount is treated as additional purchase price that would
increase the capital gain (or decrease the capital loss) recognized by a holder
on the disposition of his or her shares in the Merger or interest that would be
taxable as ordinary income). For example, if the event causing the delay is
considered to be within the control of Jacor, the
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Internal Revenue Service may attempt to recharacterize the additional amount as
interest that is taxable as ordinary income. Due to the facts and circumstances
of the inquiry, Jones, Day, Reavis & Pogue has expressed no tax opinion on this
issue. Jacor and Citicasters each have indicated its intention to treat any
additional amounts received as additional purchase price that would increase the
capital gain (or decrease the capital loss) recognized by a holder on the
disposition of his or her shares in the Merger. Holders should note, however,
that, depending on the facts and circumstances, there is a risk that the
Internal Revenue Service may attempt to recharacterize all or a portion of any
additional amount received as interest, rather than as additional purchase
price.
If a former holder of Citicasters Common Stock disposes of the Jacor
Warrants received pursuant to the Merger in a future sale or in an exchange with
an unrelated party of such warrants for cash or stock of an unrelated party, the
holder will recognize a capital gain or loss equal to the difference between (a)
the proceeds received on disposition and (b) the holder's tax basis in the Jacor
Warrants. Former holders of Citicasters Common Stock, however, will not be taxed
at the time they exercise Jacor Warrants. Instead, the holders will have a basis
in the Jacor Common Stock received on exercise of the Jacor Warrants equal to
the exercise price plus the holder's tax basis in the Jacor Warrants. If Jacor
Warrants expire prior to their exercise, the holder of the Jacor Warrants will
recognize a capital loss at that time equal to the holder's tax basis in the
Jacor Warrants.
Under the federal income tax backup withholding rules, unless an exemption
applies, the Exchange Agent will be required to withhold, and will withhold, 31%
of all payments to which a holder of Citicasters Common Stock or other payee is
entitled pursuant to the Merger, unless the holder or other payee provides a tax
identification number (social security number, in the case of an individual, or
employer identification number in the case of other Citicasters shareholders)
and certifies under penalties of perjury, that such number is correct. Each
holder of Citicasters Common Stock, and, if applicable, each other payee, should
complete and sign the substitute Form W-9 which will be included as part of the
letter of transmittal to be returned to the Exchange Agent in order to provide
the information and certification necessary to avoid backup withholding, unless
an applicable exception exists and is proved in a manner satisfactory to the
Exchange Agent. The exceptions provide that certain holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, however, he or she must submit a
signed statement (I.E., Certificate of Foreign Status on Form W-8) attesting to
his or her exempt status. Any amounts withheld will be allowed as a credit
against the holder's federal income tax liability for such year.
TAX CONSEQUENCES TO HOLDERS OF OPTIONS TO ACQUIRE CITICASTERS COMMON
STOCK. Holders of options to acquire Citicasters Common Stock will exchange each
of their options for cash and a Jacor Warrant. A holder will recognize ordinary
income equal to the amount of cash received. In addition, while the matter may
not be free from doubt, it is likely that the holder also will recognize
ordinary income equal to the fair market value of the Jacor Warrants received.
Due however to the lack of direct authority regarding the receipt of warrants by
a holder of options, Jones, Day, Reavis & Pogue has expressed no opinion on this
issue. Citicasters has indicated its intention to report on Form W-2 for each
holder the sum of the cash and the fair market value of the Jacor Warrants
received. Assuming that a holder recognizes income on receipt of the Jacor
Warrants, the tax consequences on disposition or expiration of the warrants
should be similar to those described above in the case of holders of Citicasters
Common Stock who received Jacor Warrants, provided that the warrants are held as
capital asset.
In addition to the tax consequences described above, certain options that
become fully vested as a result of the Merger, as well as other items, may
constitute "excess parachute payments" associated with a change in control of
Citicasters. Such payments can result in a special 20 percent excise tax on the
holder under Section 4999 of the Code and a loss of the deduction associated
with the payments to Citicasters under Section 280G of the Code.
TAX CONSEQUENCES TO JACOR. The consummation of the Merger will not be a
taxable event to Jacor.
THE FOREGOING IS A SUMMARY DESCRIPTION OF MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER AND RELATED TRANSACTIONS, WITHOUT CONSIDERATION OF
THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER OF
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CITICASTERS COMMON STOCK OR HOLDER OF OPTIONS TO ACQUIRE CITICASTERS COMMON
STOCK. IN ADDITION, IT DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN TAX ASPECTS
OF THE MERGER. THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE
CODE, EXISTING AND PROPOSED TREASURY REGULATIONS THEREUNDER AND CURRENT
ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO
CHANGE AND ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THE
DISCUSSION. EACH CITICASTERS SHAREHOLDER SHOULD CONSULT ITS OWN TAX ADVISOR AS
TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THE HOLDER, INCLUDING THE
APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
ACCOUNTING TREATMENT
The Merger will be accounted for as a "purchase," as such term is used under
generally accepted accounting principles. Accordingly, from and after the
Effective Date, Citicasters' consolidated results of operations will be included
in Jacor's consolidated results of operations. For purposes of preparing Jacor's
consolidated financial statements, Jacor will establish a new accounting basis
for Citicasters' assets and liabilities based upon the fair market values
thereof and Jacor's purchase price, including the costs of the acquisition.
Accordingly, the purchase accounting adjustments made in connection with the
development of the pro forma condensed financial information appearing elsewhere
in this Proxy Statement/Information Statement/Prospectus are preliminary and
have been made solely for purposes of developing such pro forma consolidated
financial information to comply with disclosure requirements of the Commission.
Although the final allocation will differ, the pro forma consolidated financial
information reflects management's best estimate based upon currently available
information. See "UNAUDITED PRO FORMA FINANCIAL INFORMATION."
FEDERAL SECURITIES LAW CONSEQUENCES
All Jacor Warrants received by Citicasters shareholders in the Merger will
be freely transferable, except that Jacor Warrants received by persons who are
deemed to be "affiliates" (as such term is defined under the Securities Act) of
Citicasters prior to the Merger may be resold by them only in transactions
permitted by the resale provisions of Rule 145 promulgated under the Securities
Act (or Rule 144 in the case of such persons who become affiliates of Jacor) or
as otherwise permitted under the Securities Act. Persons who may be deemed to be
affiliates of Jacor or Citicasters generally include individuals or entities
that control, are controlled by, or are under common control with, such party
and may include certain officers and directors of such party as well as
principal shareholders of such party. The Merger Agreement requires Citicasters
to use its best efforts to cause each of its affiliates to execute a written
agreement to the effect that such affiliate will not offer or sell or otherwise
dispose of any of the Jacor Warrants, or the shares of the Jacor Common Stock
issued upon exercise of a Jacor Warrant, issued to such affiliate in or pursuant
to the Merger in violation of the Securities Act or the rules and regulations
promulgated by the Commission thereunder.
The shares of Jacor Common Stock issuable upon exercise of Jacor Warrants
have been registered under the Registration Statement of which this Proxy
Statement/Information Statement/Prospectus is a part. In the Merger Agreement,
Jacor has covenanted that upon consummation of the Merger it will use its
reasonable best efforts to prepare and file with the Commission a registration
statement in connection with the issuance of such shares of Jacor Common Stock
upon exercise of Jacor Warrants, and use its reasonable best efforts to cause
such registration statement to become effective. In addition, the Stockholders
Agreement provides that Jacor and the Consenting Stockholders will, prior to the
Closing, enter into an agreement providing for shelf registration of resale of
the Warrants and the underlying shares of Jacor Common Stock with terms and
conditions customary for transactions that are similar to the Merger.
NO APPRAISAL OR DISSENTERS' RIGHTS
Because Citicasters Common Stock was registered on the Nasdaq National
Market on the Citicasters Record Date, holders of Citicasters Common Stock will
not have appraisal rights or dissenters' rights under the FBCA in connection
with the Merger. Under the general corporation laws of both Ohio and Delaware,
the Merger does not require the approval of the Jacor shareholders and,
therefore, holders of Jacor Common Stock are not entitled to appraisal rights or
dissenters' rights with respect to the Merger.
53
<PAGE>
THE NOBLE ACQUISITION
On February 21, 1996, Jacor entered into an agreement with the stockholders
of Noble to acquire all of the outstanding Class B common stock of Noble for
approximately $12.5 million. At the same time, Jacor also purchased a warrant,
for a purchase price of approximately $52.8 million, entitling Jacor to acquire
the Class A common stock of Noble comprising a 79.1% equity interest in Noble.
Upon consummation of the purchase of the outstanding Noble capital stock from
the Noble stockholders and the exercise of Jacor's warrant, Jacor will own 100%
of the equity interests in Noble. The consummation of Jacor's acquisition of
Noble is subject to various conditions including the approval of the FCC and the
expiration or termination of the applicable waiting period under the HSR Act.
See "RISK FACTORS--Pending Acquisitions" and "THE MERGER--Regulatory
Matters--Required Approvals for Noble Acquisition."
Noble owns 10 radio stations serving Denver, St. Louis and Toledo. Pending
the closing of Jacor's acquisition of Noble, Jacor and Noble have entered into
time brokerage agreements with respect to Noble's radio stations in St. Louis
and Toledo.
On February 21, 1996, Jacor purchased from certain Noble subsidiaries for
approximately $47.0 million certain assets relating to Noble's San Diego
operations. Noble's San Diego operations assets included an exclusive sales
agency agreement under which Noble provided programming to and sold the air time
for two radio stations serving San Diego (XTRA-AM, XTRA-FM). These two radio
stations are licensed by, and subject to the regulatory control of, the Mexican
government. As part of its purchase of Noble's San Diego operations, Jacor was
assigned all of Noble's rights under the exclusive sales agency agreement, and
Jacor is now providing the programming to and selling air time for such
stations. In addition, another wholly owned subsidiary of Jacor provided a
credit facility to Noble in the amount of $41.0 million. Noble applied the
proceeds of this credit facility to repay in full its outstanding indebtedness
as of February 21, 1996.
The aggregate value of the Noble Acquisition, when fully consummated, is
estimated to be approximately $152.0 million, of which approximately $139.5
million has already been paid. In order to fund the Noble Acquisition, refinance
outstanding debt of $45.5 million (as of February 21, 1996), and pay related
costs and expenses of approximately $5.0 million, Jacor entered into the
Existing Credit Facility in the principal amount of $300.0 million. See "THE
MERGER--Financing Arrangements."
54
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information (the "Pro Forma
Financial Information") is based on the historical financial statements of
Jacor, Noble and Citicasters and has been prepared to illustrate the effects of
the acquisitions described below and the related financing transactions.
The unaudited pro forma condensed consolidated statements of operations for
the year ended December 31, 1995 and for the latest twelve months ended March
31, 1996 give effect to each of the following transactions as if such
transactions had been completed as of January 1, 1995: (i) Jacor's 1995
completed radio station acquisitions and the February 1996 radio station
dispositions, (ii) Noble's completed 1995 radio station acquisitions and
dispositions, (iii) Citicasters' completed 1995 and January 1996 radio station
acquisitions, (iv) the Acquisitions, and (v) the related financing transactions.
The unaudited pro forma condensed consolidated statements of operations for the
three months ended March 31, 1996 and for the latest twelve months ended March
31, 1996 give effect to each of the following transactions as if such
transactions had been completed as of January 1, 1996: (i) Jacor's February 1996
radio station dispositions, (ii) the Acquisitions, and (iii) the related
financing transactions. The pro forma condensed consolidated balance sheet as of
March 31, 1996 has been prepared as if such acquisitions and the related
financing transactions had occurred on that date.
The Acquisitions will be accounted for using the purchase method of
accounting. The total purchase costs of the Acquisitions will be allocated to
the tangible and intangible assets and liabilities acquired based upon their
respective fair values. The allocation of the aggregate purchase price reflected
in the Unaudited Pro Forma Financial Information is preliminary. The final
allocation of the purchase price will be contingent upon the receipt of final
appraisals of the acquired assets and liabilities.
The Unaudited Pro Forma Financial Information does not purport to present
the actual financial position or results of operations of the Company had the
transactions and events assumed therein in fact occurred on the dates specified,
nor are they necessarily indicative of the results of operations that may be
achieved in the future. The Unaudited Pro Forma Financial Information is based
on certain assumptions and adjustments described in the notes hereto and should
be read in conjunction therewith. The Unaudited Pro Forma Financial Information
should also be read in conjunction with the Consolidated Financial Statements
and the Notes thereto for each of Jacor, Citicasters and Noble incorporated by
reference in this Proxy Statement/Information Statement/Prospectus.
55
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------------------
JACOR NOBLE PRO JACOR/NOBLE
HISTORICAL PRO FORMA JACOR PRO HISTORICAL FORMA COMBINED
JACOR ADJUSTMENTS FORMA NOBLE ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue......................................... $ 118,891 $ (678)(a) $118,213 $41,902 $ 87(b) $160,202
Broadcast operating expenses........................ 87,290 (1,425)(a) 85,865 31,445 (429)(b) 116,881
Depreciation and amortization....................... 9,483 400(a) 9,883 4,107 2,710(c) 16,700
Corporate general and administrative expenses....... 3,501 3,501 2,285 (1,388)(d) 4,398
---------- ----------- --------- ---------- ----------- -----------
Operating income................................ 18,617 347 18,964 4,065 (806) 22,223
Interest expense.................................... (1,444) (1,444) (9,913) (3,143)(e) (14,500)
Interest and investment
income............................................ 1,260 (854)(a) 406 406
Other income (expense), net......................... (168) 6(a) (162) 2,619 (2,619)(f) (162)
---------- ----------- --------- ---------- ----------- -----------
Income (loss) before income taxes and
extraordinary items............................ 18,265 (501) 17,764 (3,229) (6,568) 7,967
Income tax expense.................................. (7,300) 200(g) (7,100) (63) 2,100(g) (5,063)
---------- ----------- --------- ---------- ----------- -----------
Income (loss) before extraordinary items........ $ 10,965 $ (301) $ 10,664 $(3,292) $(4,468) $ 2,904
---------- ----------- --------- ---------- ----------- -----------
---------- ----------- --------- ---------- ----------- -----------
Income per common
share.......................................... $ 0.52 $ 0.51 $ 0.14
---------- --------- -----------
---------- --------- -----------
Number of common shares used in per share
computations...................................... 20,913 20,913 20,913
---------- --------- -----------
---------- --------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
56
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
LATEST TWELVE
YEAR ENDED DECEMBER 31, 1995 MONTHS ENDED
------------------------------------------------------------------ MARCH 31, 1996
JACOR/NOBLE CITICASTERS -----------------------
COMBINED HISTORICAL PRO FORMA JACOR/NOBLE/CITICASTERS JACOR/NOBLE/CITICASTERS
PRO FORMA CITICASTERS ADJUSTMENTS COMBINED PRO FORMA COMBINED PRO FORMA
----------- ----------- ------------ ----------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Net revenue.......................... $160,202 $ 136,414 $ 6,853(h) $303,469 $305,883
Broadcast operating expenses......... 116,881 80,929 4,366(h) 195,744 197,854
(1,322)(i)
(5,110)(j)
Depreciation and amortization........ 16,700 14,635 15,505(k) 46,840 47,118
Corporate general and administrative
expenses........................... 4,398 4,303 1,322(i) 6,655 6,733
(3,368)(l)
----------- ----------- ------------ -------- --------
Operating income................. 22,223 36,547 (4,540) 54,230 54,178
Interest expense..................... (14,500) (13,854) (32,084)(m) (60,438) (60,438)
Interest and investment income....... 406 1,231 (767)(h) 870 595
Other income (expense), net.......... (162) (607) 175(h) (594) (896)
----------- ----------- ------------ -------- --------
Income (loss) before income taxes
and extraordinary items......... 7,967 23,317 (37,216) (5,932) (6,561)
Income tax expense................... (5,063) (9,000) 11,100(n) (2,963) (3,555)
----------- ----------- ------------ -------- --------
Income (loss) before
extraordinary items............. $ 2,904 $ 14,317 $(26,116) $ (8,895) $(10,116)
----------- ----------- ------------ -------- --------
----------- ----------- ------------ -------- --------
Income (loss) per common share... $ 0.14 $ (0.29) $ (0.34)
----------- -------- --------
----------- -------- --------
Number of common shares used in per
share computations................. 20,913 30,158(o) 29,433
----------- -------- --------
----------- -------- --------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
57
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
------------------------------------------------------------------------------
JACOR NOBLE PRO JACOR/NOBLE
HISTORICAL PRO FORMA JACOR PRO HISTORICAL FORMA COMBINED
JACOR ADJUSTMENTS FORMA NOBLE ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue........................................ $ 30,074 $ 1,850(p) $ 31,924 $ 6,058 $ (2,154)(r) $ 35,828
Broadcast operating
expenses......................................... 23,871 1,693(p) 25,564 5,626 (2,075)(r) 29,115
Depreciation and amortization...................... 2,619 30(p) 2,649 1,079 625(c) 4,353
Corporate general and administrative expenses...... 1,139 1,139 577 (378)(s) 1,338
---------- ----------- --------- ---------- ------------ -----------
Operating income............................... 2,445 127 2,572 (1,224) (326) 1,022
Interest expense................................... (2,111) (2,111) (1,875) 361(e) (3,625)
Interest and investment
income...........................................
Other income (expense), net........................ 2,767 (2,539)(q) 228 37,669 (37,669)(r) 228
---------- ----------- --------- ---------- ------------ -----------
Income (loss) before income taxes and
extraordinary items........................... 3,101 (2,412) 689 34,570 (37,634) (2,375)
Income tax expense................................. (1,259) 965(g) (294) (14,683) 14,925(g) (52)
---------- ----------- --------- ---------- ------------ -----------
Income (loss) before extraordinary items....... $ 1,842 $(1,447) $ 395 $ 19,887 $(22,709) $ (2,427)
---------- ----------- --------- ---------- ------------ -----------
---------- ----------- --------- ---------- ------------ -----------
Income per common
share......................................... $ 0.09 $ 0.02 $ (0.13)
---------- --------- -----------
---------- --------- -----------
Number of common shares used in per share
computations..................................... 20,503 20,503 18,183
---------- --------- -----------
---------- --------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
58
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
THREE MONTHS ENDED MARCH 31, 1996 ENDED
------------------------------------------------------------------ MARCH 31, 1995
JACOR/NOBLE CITICASTERS -----------------------
COMBINED HISTORICAL PRO FORMA JACOR/NOBLE/CITICASTERS JACOR/NOBLE/CITICASTERS
PRO FORMA CITICASTERS ADJUSTMENTS COMBINED PRO FORMA COMBINED PRO FORMA
----------- ----------- ------------ ----------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Net revenue.......................... $ 35,828 $ 31,177 $ 67,005 $ 64,591
Broadcast operating expenses......... 29,115 21,728 $ (330)(i) 49,235 47,125
(1,278)(j)
Depreciation and amortization........ 4,353 4,065 3,470(k) 11,888 11,610
Corporate general and administrative
expenses........................... 1,338 1,053 330(i) 1,879 1,801
(842)(l)
----------- ----------- ------------ -------- --------
Operating income................. 1,022 4,331 (1,350) 4,003 4,055
Interest expense..................... (3,625) (3,734) (7,750)(m) (15,109) (15,109)
Interest and investment income....... 55 55 330
Other income (expense), net.......... 228 (1,522) 1,489(t) 195 497
----------- ----------- ------------ -------- --------
Income (loss) before income taxes
and extraordinary items......... (2,375) (870) (7,611) (10,856) (10,227)
Income tax expense................... (52) 300 2,090(n) 2,338 2,930
----------- ----------- ------------ -------- --------
Income (loss) before
extraordinary items............. $ (2,427) $ (570) $ (5,521) $ (8,518) $ (7,297)
----------- ----------- ------------ -------- --------
----------- ----------- ------------ -------- --------
Income (loss) per common share... $ (0.13) $ (0.29) $ (0.24)
----------- -------- --------
----------- -------- --------
Number of common shares used in per
share computations................. 18,183 29,433(o) 30,848
----------- -------- --------
----------- -------- --------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
59
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
---------------------------------------------------------
NOBLE PRO JACOR/NOBLE
HISTORICAL HISTORICAL FORMA COMBINED PRO
JACOR NOBLE ADJUSTMENTS FORMA
---------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash.......................................... $ 5,889 $ 592 $ 6,481
Accounts receivable........................... 25,301 3,239 28,540
Broadcast program rights......................
Prepaid expenses and other current assets..... 8,460 3,377 11,837
---------- ---------- --------------
Total current assets...................... 39,650 7,208 46,858
Property and equipment............................ 39,214 4,670 $ 4,980(u) 48,864
Intangible assets................................. 165,282 49,965 99,009(u) 314,256
Deferred charges and other assets................. 109,102 1,289 (54,275)(u) 16,116
(40,000)(v)
---------- ---------- -------------- --------------
Total assets.............................. $ 353,248 $ 63,132 $ 9,714 $426,094
---------- ---------- -------------- --------------
---------- ---------- -------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued liabilities and
other current liabilities.................... $ 14,601 $ 11,493 $ 26,094
Current portion of long-term debt............. 40,000 $(40,000)(v)
---------- ---------- -------------- --------------
Total current liabilities................. 14,601 51,493 (40,000) 26,094
Long-term debt, net of current maturities......... 183,500 15,125(v) 198,625
Other liabilities................................. 14,772 18,228 28,000 (u)(w 61,000
Shareholders' equity:
Common stock.................................. 1,824 1,824
Additional paid-in capital.................... 117,102 49,791 (49,791)(x) 117,102
Common stock warrants......................... 388 388
Retained earnings............................. 21,061 (56,380) 56,380(x) 21,061
---------- ---------- -------------- --------------
Total shareholders' equity................ 140,375 (6,589) 6,589 140,375
---------- ---------- -------------- --------------
Total liabilities and shareholders'
equity................................... $ 353,248 $ 63,132 $ 9,714 $426,094
---------- ---------- -------------- --------------
---------- ---------- -------------- --------------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
60
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
------------------------------------------------------------------------------
JACOR/NOBLE HISTORICAL CITICASTERS PRO JACOR/NOBLE/CITICASTERS
COMBINED PRO FORMA CITICASTERS FORMA ADJUSTMENTS COMBINED PRO FORMA
------------------ ----------- ----------------- -----------------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash................................ $ 6,481 $ 6,238 $ 35,300(z) $ 12,719
Accounts receivable................. 28,540 27,835 56,375
Broadcast program rights............ 4,596 4,596
Prepaid expenses and other current
assets............................. 11,837 2,687 14,524
-------- ----------- -------- -----------
Total current assets............ 46,858 41,356 35,300 123,514
Broadcast program rights, less current
portion............................... 2,406 2,406
Property and equipment.................. 48,864 37,159 $ 9,719(z) 95,742
Intangible assets....................... 314,256 331,258 651,315(z) 1,323,229
(3,300)(aa)
Deferred charges and other assets....... 16,116 14,549 30,665
-------- ----------- -------- -----------
Total assets.................... $426,094 $ 426,728 $722,734 $1,575,556
-------- ----------- -------- -----------
-------- ----------- -------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued
liabilities and other current
liabilities........................ $ 26,094 $ 12,983 $ 39,077
Broadcast program right fees
payable............................ 4,645 4,645
-------- ----------- -----------
Total current liabilities....... 26,094 17,628 43,722
Broadcast program right fees payable,
less current portion.................. 2,212 2,212
Long-term debt, net of current
maturities............................ 198,625 148,532 $277,843(y) 625,000
LYONs................................... 100,000(y) 100,000
Other liabilities....................... 61,000 99,022 151,000(z) 311,022
Shareholders' equity:
Common stock........................ 1,824 200 (200)(x) 2,949
1,125(bb)
Additional paid-in capital.......... 117,102 82,948 (82,948)(x) 418,602
301,500(bb)
Common stock warrants............... 388 53,900(cc) 54,288
Retained earnings................... 21,061 76,186 (76,186)(x) 17,761
(3,300)(aa)
-------- ----------- -------- -----------
Total shareholders' equity...... 140,375 159,334 193,891 493,600
-------- ----------- -------- -----------
Total liabilities and
shareholders' equity........... $426,094 $ 426,728 $722,734 $1,575,556
-------- ----------- -------- -----------
-------- ----------- -------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
61
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
(a) These adjustments reflect additional revenues and expenses for Jacor's
acquisitions of radio stations WDUV-FM and WBRD-AM in Tampa Bay and WJBT-FM,
WSOL-FM, and WZAZ-AM in Jacksonville, which were completed at various dates
in 1995, net of the elimination of 1995 revenues and expenses for radio
stations WMYU-FM and WWST-FM in Knoxville, which were sold in February 1996.
(b) These adjustments reflect additional revenues and expenses for Noble's
acquisition of radio stations WRVF-FM (formerly WLQR-FM) and WSPD-AM in
Toledo, and the elimination of revenues and expenses for the sale of radio
stations KBEQ-FM and KBEQ-AM in Kansas City, and other miscellaneous
non-recurring expenses related to dispositions of properties in 1995. The
acquisitions were completed in August 1995 and the dispositions were
completed in March 1995.
(c) The adjustment reflects the additional depreciation and amortization expense
resulting from the allocation of Jacor's purchase price to the assets
acquired including an increase in property and equipment and identifiable
intangible assets, to their estimated fair market values and the recording
of goodwill associated with the acquisition of Noble. See Note (u). Goodwill
is amortized over 40 years.
(d) The adjustment represents $1,513 of corporate overhead savings for the
elimination of redundant management costs and other expenses resulting from
the combination of the Jacor and Noble entities, net of $125 additional
corporate expenses associated with the purchase of the Toledo stations.
(e) The adjustment represents additional interest expense associated with
Jacor's borrowings under the Existing Credit Facility to finance the Noble
acquisition and refinance existing outstanding borrowings. The assumed
interest rate is 7.3%, which represents the current rate as of May 1996 on
outstanding borrowings.
(f) The adjustment reflects the elimination of the gain on the sale of radio
stations KBEQ-FM and AM in Kansas City, and WSSH-AM in Boston, which were
sold in March 1995 and January 1995, respectively.
(g) To provide for the tax effect of pro forma adjustments using an estimated
statutory rate of 40%. The Noble pro forma adjustments include
non-deductible amortization of goodwill estimated to be approximately $1,300
for the year ended December 31, 1995 and $325 for the three months ended
March 31, 1996.
(h) The adjustments represent additional revenue and expenses associated with
Citicasters June 1995 acquisition of KKCW-FM in Portland and the January
1996 acquisition of WHOK-FM, WLLD-FM, and WLOH-AM in Columbus, including
adjustments to investment income related to cash expended in the
acquisitions and miscellaneous non-recurring costs.
(i) Adjustments to reclassify miscellaneous broadcast operating expenses to
conform with Jacor's presentation.
(j) The adjustments reflect $5,110 and $1,278 of cost savings for the year ended
December 31, 1995 and the three months ended March 31, 1996, respectively,
resulting from the elimination of redundant broadcast operating expenses
arising from the operation of multiple stations in certain markets. Such pro
forma cost savings are expected to be as follows:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1995 MARCH 31, 1996
----------------- ---------------
<S> <C> <C>
Programming and promotion................................. $ 2,220 $ 555
News...................................................... 970 243
Technical and engineering................................. 360 90
General and administrative................................ 1,560 390
------ ------
$ 5,110 $ 1,278
------ ------
------ ------
</TABLE>
62
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)--(CONTINUED)
(k) The adjustment reflects the additional depreciation and amortization expense
resulting from the allocation of Jacor's purchase price to the assets
acquired including an increase in property and equipment and identifiable
intangible assets to their estimated fair market values and the recording of
goodwill associated with the acquisition of Citicasters. See Note (z).
Goodwill is amortized over 40 years.
(l) The adjustments represent $3,368 and $842 of corporate overhead savings for
the year ended December 31, 1995 and the three months ended March 31, 1996,
respectively, for the elimination of redundant management costs and other
expenses resulting from the combination with Citicasters.
(m) Represents the adjustment to interest expense associated with the Notes, the
Citicasters Notes, the LYONs and borrowings under the New Credit Facility
with an assumed blended rate of 8.336%. The adjustment reflects additional
interest expense on borrowings necessary to complete the Merger, and to
refinance outstanding borrowings under the Existing Credit Facility incurred
in connection with the Noble Acquisition. A change of .125% in interest
rates would result in a change in interest expense and income (loss) before
extraordinary items of approximately $900 and $540, respectively. See Note
(y) for composition of borrowings.
(n) To provide for the tax effect of pro forma adjustments using an estimated
statutory rate of 40%. The Citicasters pro forma adjustments include
non-deductible amortization of goodwill estimated to be approximately $9,540
for the year ended December 31, 1995 and $2,385 for the three months ended
March 31, 1996.
(o) The pro forma weighted average shares outstanding includes all shares of
Common Stock outstanding prior to the 1996 Stock Offering and shares to be
issued in the 1996 Stock Offering. The pro forma weighted average shares of
Jacor do not reflect any options and warrants outstanding prior to the 1996
Stock Offering or warrants to be issued to the Citicasters shareholders to
consummate the Merger, as they are antidilutive. The LYONs are not common
stock equivalents and are therefore, excluded from the computation.
(p) These adjustments reflect additional revenues and expenses for Jacor's
February 1996 acquisition of Noble's operating assets in San Diego, net of
the elimination of revenues and expenses for radio stations WMYU-FM and
WWST-FM in Knoxville, which were sold in February 1996.
(q) The adjustment reflects the elimination of the gain on the sale of radio
stations WMYU-FM and WWST-FM in Knoxville, which were sold in February 1996
for $6,500.
(r) These adjustments represent the elimination of revenues, operating expenses
and the related gain from the sale of the San Diego operating assets in
February 1996. See note (u).
(s) The adjustment represents corporate overhead savings from the elimination of
redundant management costs and other expenses resulting from the combination
of the Jacor and Noble entities.
(t) The adjustment represents the elimination of non-recurring expenses directly
associated with the sale of Citicasters to Jacor.
63
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)--(CONTINUED)
(u) The adjustment represents the allocation of the remaining purchase price of
Noble and the portion of the Noble Acquisition already funded, including the
Noble warrant in the amount of $54,275, to the estimated fair value of the
assets acquired and liabilities assumed, and the recording of goodwill
associated with the acquisition. In February 1996, Jacor completed the
acquisition of Noble's operating assets in San Diego and certain assets
related to the Mexican properties for $50,800 and recorded the transaction
as a purchase.
<TABLE>
<CAPTION>
ESTIMATED FAIR
MARKET VALUE
--------------
<S> <C>
Property and equipment........................................................ $ 9,650
Intangible assets............................................................. 148,974
Cash.......................................................................... 592
Accounts receivable........................................................... 3,239
Prepaid expenses and other current assets..................................... 3,377
Deferred charges and other assets............................................. 1,289
Accounts payable, accrued liabilities and other current liabilities........... (11,493)
Other liabilities............................................................. (46,228)
--------------
$ 109,400
--------------
--------------
</TABLE>
(v) The adjustment represents the net additional borrowings to complete the
Noble Acquisition as follows:
<TABLE>
<S> <C>
Historical Jacor debt.......................................... $ 183,500
Historical Noble debt.......................................... 40,000
Loan receivable from Noble..................................... (40,000)
Pro forma adjustment........................................... 15,125
-----------
Assumed borrowings after Noble Acquisition..................... $ 198,625
-----------
-----------
</TABLE>
(w) The adjustment represents the additional deferred tax liability associated
with the difference between the book and tax basis of assets and
liabilities, excluding goodwill, after the allocation of the purchase price.
(x) The adjustment reflects the elimination of historical stockholders' equity,
as the Noble Acquisition will be accounted for as a purchase.
(y) The pro forma adjustment represents the net additional borrowings required
to complete the Merger as follows:
<TABLE>
<S> <C>
Historical Citicasters debt....................................... $ 148,532
Jacor/Noble pro forma debt........................................ 198,625
Pro forma adjustments, including a $2,468 fair market value
adjustment for Citicasters debt................................. 377,843
---------
Assumed borrowings after Acquisitions............................. $ 725,000
---------
---------
</TABLE>
The assumed borrowings after the Acquisitions are as follows:
<TABLE>
<S> <C>
Borrowings under the New Credit Facility.......................... $ 400,000
Issuance of the LYONs............................................. 100,000
Issuance of the Notes............................................. 100,000
Citicasters Notes................................................. 125,000
---------
$ 725,000
---------
---------
</TABLE>
64
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)--(CONTINUED)
(z) The adjustments represent the allocation of the purchase price of
Citicasters to the estimated fair value of the assets acquired and
liabilities assumed, and the recording of goodwill associated with the
Merger as follows:
<TABLE>
<CAPTION>
ESTIMATED FAIR
MARKET VALUE
--------------
<S> <C>
Property and equipment........................................................ $ 46,878
Intangible assets............................................................. 1,012,273
Cash.......................................................................... 6,238
Accounts receivable........................................................... 27,835
Broadcast program rights...................................................... 7,002
Prepaid expenses and other current assets..................................... 2,687
Deferred charges and other assets............................................. 14,549
Accounts payable, accrued liabilities and other current liabilities........... (12,983)
Broadcast program rights fees payable......................................... (6,857)
Other liabilities............................................................. (250,022)
Long-term debt................................................................ (151,000)
--------------
$ 696,600
--------------
--------------
</TABLE>
The purchase price is summarized as follows:
<TABLE>
<S> <C>
Pro forma borrowings........................................... $ 375,375
Merger Warrants issued......................................... 53,900
Common Stock issued............................................ 302,625
Excess Cash.................................................... (35,300)
-----------
$ 696,600
-----------
-----------
</TABLE>
(aa) Adjustment to write-off deferred financing costs for the Existing Credit
Facility anticipated to be refinanced in connection with the Merger.
(bb) Adjustment represents assumed proceeds of $315,000 from the 1996 Stock
Offering, net of offering costs estimated to be $12,375. (Offering costs
include a $1,000 financial advisory fee.)
(cc) Adjustment represents the value assigned to the Merger Warrants to be
issued to Citicasters shareholders in connection with the consummation of
the Merger, which Merger Warrants will be exercisable for 4,400,000 shares
of Common Stock in the aggregate. The value was determined assuming that the
exercise price for each full share of Common Stock issued upon exercise of
Merger Warrants is $28 per share.
65
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
JACOR
The selected consolidated financial data for Jacor presented below for, and
as of the end of each of the years in the five-year period ended December 31,
1995, is derived from Jacor's Consolidated Financial Statements which have been
audited by Coopers & Lybrand L.L.P., independent accountants. The consolidated
financial statements at December 31, 1994 and 1995 and for each of the three
years in the period ended December 31, 1995 and the auditors' report thereon are
incorporated herein by reference. The selected financial data as of March 31,
1996 and for the three months ended March 31, 1995 and 1996 are unaudited. In
the opinion of Jacor's management, the unaudited financial statements from which
such data have been derived include all adjustments (consisting only of normal,
recurring adjustments) which are necessary for a fair presentation of results of
operations for such periods. This selected consolidated financial data should be
read in conjunction with the "Unaudited Pro Forma Financial Information."
Comparability of Jacor's historical consolidated financial data has been
significantly impacted by acquisitions, dispositions and the recapitalization
and refinancing completed in the first quarter of 1993.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA:(1)
Net revenue................................ $ 64,238 $ 70,506 $ 89,932 $ 107,010 $ 118,891 $ 24,016 $ 30,074
Broadcast operating expenses............... 48,206 55,782 69,520 80,468 87,290 19,960 23,871
--------- --------- --------- --------- --------- --------- -----------
Station operating income excluding
depreciation and amortization............. 16,032 14,724 20,412 26,542 31,601 4,056 6,203
Depreciation and amortization.............. 7,288 6,399 10,223 9,698 9,483 2,112 2,619
Reduction in carrying value of assets to
net realizable value...................... 8,600
Corporate general and administrative
expenses.................................. 2,682 2,926 3,564 3,361 3,501 884 1,139
--------- --------- --------- --------- --------- --------- -----------
Operating income (loss).................... 6,062 (3,201) 6,625 13,483 18,617 1,060 2,445
Net interest income (expense).............. (16,226) (13,443) (2,476) 684 (184) 205 (1,884)
Gain on sale of radio stations............. 13,014 2,539
Other non-operating expenses, net.......... (302) (7,057) (11) (2) (168)
--------- --------- --------- --------- --------- --------- -----------
Income (loss) from continuing operations
before income tax and extraordinary
item...................................... $ 2,548 $ (23,701) $ 4,138 $ 14,165 $ 18,265 $ 1,265 $ 3,101
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
Income (loss) from continuing operations
after income taxes but before
extraordinary items and the cumulative
effect of accounting changes.............. $ (364) $ (23,701) $ 1,438 $ 7,852 $ 10,965 $ 751 $ 1,842
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
Net income (loss).......................... $ 1,468 $ (23,701) $ 1,438 $ 7,852 $ 10,965 $ 751 $ 891(2)
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
Net income (loss) per common share:(3)
Primary and fully diluted.................. $ 2.32 $ (61.50) $ 0.10 $ 0.37 $ 0.52 $ 0.04 $ 0.04
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
Weighted average shares outstanding:(3)
Primary and fully diluted.................. 406 381 14,505 21,409 20,913 21,347 20,503
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
OTHER FINANCIAL DATA:(1)
Broadcast cash flow(4)..................... $ 16,032 $ 14,724 $ 20,412 $ 26,542 $ 31,601 $ 4,056 $ 6,203
--------- --------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- --------- -----------
Broadcast cash flow margin(5).............. 25.0% 20.9% 22.7% 24.8% 26.6% 16.9% 20.6%
EBITDA(4).................................. $ 13,350 $ 11,798 $ 16,848 $ 23,181 $ 28,100 $ 3,172 $ 5,064
Capital expenditures....................... 1,181 915 1,495 2,221 4,969 707 3,437
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
----------------------------------------------------- MARCH 31,
1991 1992(6) 1993 1994 1995 1996
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(1)
Working capital (deficit).................. $(128,455) $(140,547) $ 38,659 $ 44,637 $ 24,436 $ 25,049
Intangible assets (net of accumulated
amortization)............................. 81,738 70,038 84,991 89,543 127,158 165,282
Total assets............................... 125,487 122,000 159,909 173,579 208,839 353,248
Total long-term debt (including current
portion).................................. 137,667 140,542 45,500 183,500
Common stock purchase warrants............. 2,342 1,383 390 390 388 388
Shareholders' equity (deficit)............. (27,383) (50,840) 140,413 149,044 139,073 140,374
</TABLE>
66
<PAGE>
- ---------
(1) The comparability of the information reflected in this selected financial
data is affected by Jacor's purchase of radio station KBPI-FM (formerly
KAZY-FM), in Denver (July 1993); the purchase and interim operation of radio
station WOFX-FM (formerly WPPT-FM) under a local marketing agreement in
Cincinnati (April 1994); the purchase of radio stations WJBT-FM, WZAZ-AM,
and WSOL-FM (formerly WHJX-FM) in Jacksonville (August 1995); the purchase
of radio stations WDUV-FM and WBRD-AM in Tampa (August 1995); the purchase
of Noble's operating assets in San Diego (February 1996); the sale of radio
stations WMJI-FM, in Cleveland and WYHY(FM), in Nashville (January 1991),
the sale of Telesat Cable TV (May 1994), the January 11, 1993
recapitalization plan, that substantially modified Jacor's debt and capital
structure (such recapitalization was accounted for as if it had been
completed January 1, 1993) and the March 1993 refinancing. For information
related to acquisitions in 1993, 1994 and 1995 see Notes 2 and 3 of Notes to
Consolidated Financial Statements, incorporated herein by reference. For
information related to the disposition during 1994, see Note 4 of Notes to
Consolidated Financial Statements, incorporated herein by reference.
(2) Net income for the three months ended March 31, 1996 includes, as an
extraordinary item, a loss of approximately $1.0 million for the write-off
of unamortized costs associated with the 1993 credit agreement which was
replaced in February, 1996 by the Existing Credit Facility.
(3) Income (loss) per common share for the two years ended December 31, 1992 is
based on the weighted average number of shares of Jacor Common Stock
outstanding and gives consideration to the dividend requirements of the
convertible preferred stock and accretion of the change in redemption value
of certain common stock warrants. Jacor's stock options and convertible
preferred stock were antidilutive and, therefore, were not included in the
computations. The redeemable common stock warrants were antidilutive for
1992 and were not included in the computations. Such warrants were dilutive
in 1991 using the "equity method" under Emerging Issues Task Force Issue No.
88-9 and, therefore, the common shares issuable upon conversion were
included in the 1991 computation. Income per share for the three years ended
December 31, 1995 is based on the weighted average number of common shares
outstanding and gives effect to both dilutive stock options and dilutive
stock purchase warrants during the periods. Income (loss) per common share
and weighted average shares outstanding for the two years ended December 31,
1992 are adjusted to reflect the 0.0423618 reverse stock split in Jacor
Common Stock effected by the January 1993 recapitalization.
(4) "Broadcast cash flow" means operating income before reduction in carrying
value of assets, depreciation and amortization and corporate general and
administrative expenses. "EBITDA" means operating income before reduction in
carrying value of assets, depreciation and amortization. Broadcast cash flow
and EBITDA should not be considered in isolation from, or as a substitute
for, operating income, net income or cash flow and other consolidated income
or cash flow statement data computed in accordance with generally accepted
accounting principles or as a measure of a company's profitability or
liquidity. Although this measure of performance is not calculated in
accordance with generally accepted accounting principles, it is widely used
in the broadcasting industry as a measure of a company's operating
performance because it assists in comparing station performance on a
consistent basis across companies without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors such
as historical cost bases. Broadcast cash flow also excludes the effect of
corporate general and administrative expenses, which generally do not relate
directly to station performance.
(5) Broadcast cash flow margin equals broadcast cash flow as a percentage of net
revenue.
(6) Pro forma amounts as of December 31, 1992, to give effect to the January 11,
1993 recapitalization plan that substantially modified Jacor's debt and
capital structure (in 000s):
<TABLE>
<S> <C>
Working capital.................................................................. $ 15,933
Intangible assets (net of accumulated amortization).............................. 82,857
Total assets..................................................................... 142,085
Long-term debt................................................................... 64,178
Common stock purchase warrants................................................... 403
Shareholders' equity............................................................. 50,890
</TABLE>
67
<PAGE>
CITICASTERS
The selected consolidated financial data for Citicasters presented below
for, and as of the end of each of the years in the five-year period ended
December 31, 1995, is derived from Citicasters' Consolidated Financial
Statements which have been audited by Ernst & Young LLP, independent
accountants. The consolidated financial statements at December 31, 1994 and 1995
and for each of the three years in the period ended December 31, 1995 and the
auditors' report thereon are incorporated herein by reference. The selected
financial data as of March 31, 1996 and for the three months ended March 31,
1995 and 1996 are unaudited, but Citicasters believes that all adjustments
(consisting only of normal, recurring adjustments) necessary for fair
presentation have been made. This selected consolidated financial data should be
read in conjunction with the "Unaudited Pro Forma Financial Information."
Comparability of historical consolidated financial data has been significantly
impacted by the dispositions of four television stations in 1994, the adoption
of "fresh-start reporting" by Citicasters in December 1993, the writedown of
intangible assets to estimated fair values in 1992 and the sale of its
entertainment business in 1991.
<TABLE>
<CAPTION>
PREDECESSOR(1) CITICASTERS
----------------------------------- -------------------- THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
--------- ----------- ----------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA:(2)
Net revenue.................... $ 201,556 $ 210,821 $ 205,168 $ 197,043 $ 136,414 $ 29,045 $ 31,177
Broadcast operating expense.... 136,629 142,861 133,070 117,718 80,929 19,879 21,728
--------- ----------- ----------- --------- --------- --------- -----------
Station operating income
excluding depreciation and
amortization.................. 64,927 67,960 72,098 79,325 55,485 9,166 9,449
Depreciation and
amortization.................. 48,219 47,617 28,119 22,946 14,635 3,319 4,065
Reduction in carrying value of
assets to net realizable
value......................... 658,314(3)
Corporate general and
administrative expenses....... 4,367 4,091 3,996 4,796 4,303 1,123 1,053
--------- ----------- ----------- --------- --------- --------- -----------
Operating income (loss)........ 12,341 (642,062) 39,983 51,583 36,547 4,724 4,331
Net interest income
(expense)..................... (89,845) (69,826) (64,942) (31,979) (13,854) (3,513) (3,734)
Minority interest.............. (28,822) (30,478) (26,776)
Gain on sale of television
stations...................... 95,339
Investment income.............. 1,296 553 305 1,216 1,231 680 55
Miscellaneous income (expense),
net........................... 33,133 4,036 (494) 447 (607) 187 (1,522)
Reorganization items........... (14,872)
--------- ----------- ----------- --------- --------- --------- -----------
Income (loss) from continuing
operations before income tax
and extraordinary item........ $(71,897) $(737,777) $ (66,796) $ 116,606 $ 23,317 $ 2,078 $ (870)
--------- ----------- ----------- --------- --------- --------- -----------
--------- ----------- ----------- --------- --------- --------- -----------
Income (loss) from continuing
operations after income taxes
but before extraordinary items
and the cumulative effect of
accounting changes............ $(32,788) $(613,236) $ (66,796) $ 63,106 $ 14,317 $ 1,278 $ (570)
--------- ----------- ----------- --------- --------- --------- -----------
--------- ----------- ----------- --------- --------- --------- -----------
Net income (loss).............. $ 84,485 $(596,864) $ 341,344(4) $ 63,106 $ 14,317 $ 1,278 $ (570)
--------- ----------- ----------- --------- --------- --------- -----------
--------- ----------- ----------- --------- --------- --------- -----------
Net earnings per share(5)...... $ 2.55 $ 0.68 $ 0.06 $ (0.03)
--------- ---------
--------- ---------
Average common shares(5)....... 24,777 21,017 20,819 21,119
--------- ---------
--------- ---------
OTHER FINANCIAL DATA:(2)
Broadcast cash flow(6)......... $ 64,927 $ 67,960 $ 72,098 $ 79,325 $ 55,485 $ 9,166 $ 9,449
--------- ----------- ----------- --------- --------- --------- -----------
--------- ----------- ----------- --------- --------- --------- -----------
Broadcast cash flow
margin(7)..................... 32.2% 32.2% 35.1% 40.3% 40.7% 31.6% 30.3%
EBITDA(6)...................... $ 60,560 $ 63,869 $ 68,102 $ 74,529 $ 51,182 $ 8,043 $ 8,396
Capital expenditures........... 7,014 6,747 5,967 7,569 11,857 2,591 1,820
</TABLE>
<TABLE>
<CAPTION>
PREDECESSOR CITICASTERS
---------------------- --------------------------------- AS OF
AS OF DECEMBER 31,
--------------------------------------------------------- MARCH 31,
1991 1992 1993(8) 1994 1995 1996
--------- ----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)...... $(52,520) $(611,634) $ 1,485 $ 47,518 $ 21,929 $ 23,728
Intangible assets (net of
accumulated amortization)..... 1,290,294 539,634 574,878 274,695 312,791 331,258
Total assets................... 1,475,929 713,830 719,569 403,492 416,346 426,728
Long-term debt (including
current portion).............. 692,636 634,777 432,568 122,291 132,481 148,532
Shareholders' equity
(deficit)..................... 257,835 (339,029) 138,588 150,937 159,692 159,334
</TABLE>
68
<PAGE>
- ---------
(1) Prior to its emergence from Chapter 11 bankruptcy in December 1993,
Citicasters was known as Great American Communications Company (the
"Predecessor"). As a result of the application of "fresh-start reporting,"
the selected financial data for periods prior to December 31, 1993 are not
comparable to periods subsequent to such date.
(2) The 1995 acquisition of four FM stations (KKCW, WTBT, WHOK and WLLD) and
WLOH-AM increased broadcast cash flow by approximately 2%. The 1994 sale of
four television stations (KTSP, KSAZ, WGHP and WDAF) significantly affects
comparison of net revenues, operating expenses and broadcast cash flow for
1994 as compared to 1993 and 1995. The purchase and sale of radio stations
in 1994 did not effect the comparison of broadcast cash flow, because the
cash flow of the stations sold was approximately equal to the cash flow of
the stations purchased.
(3) The recorded amount of intangible assets as of December 31, 1992 was
reduced by $658.3 million to reflect the carrying value of the broadcasting
assets at estimated fair market value at that time.
(4) Net income for the year ended December 31, 1993 includes, as extraordinary
items, a gain of $414.5 million relating to debt discharged in the
reorganization and a loss of $6.3 million from the retirement of debt prior
to the reorganization. Net loss for 1992 includes a $10.7 million gain from
discontinued operations and a $5.7 million extraordinary gain from early
extinguishment of debt. Net income from 1991 includes $39.9 million from
discontinued operations and $77.4 million extraordinary gain from early
extinguishment of debt.
(5) Per share data are not presented for the Predecessor due to the general
lack of comparability as a result of the reorganization.
(6) "Broadcast cash flow" means operating income before reduction in carrying
value of assets, depreciation and amortization and corporate general and
administrative expenses. "EBITDA" means operating income before reduction
in carrying value of assets, depreciation and amortization. Broadcast cash
flow and EBITDA should not be considered in isolation from, or as a
substitute for, operating income, net income or cash flow and other
consolidated income or cash flow statement data computed in accordance with
generally accepted accounting principles or as a measure of a company's
profitability or liquidity. Although this measure of performance is not
calculated in accordance with generally accepted accounting principles, it
is widely used in the broadcasting industry as a measure of a company's
operating performance because it assists in comparing station performance
on a consistent basis across companies without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors
such as historical cost bases. Broadcast cash flow also excludes the effect
of corporate general and administrative expenses, which generally do not
relate directly to station performance.
(7) Broadcast cash flow margin equals broadcast cash flow as a percentage of
net revenue.
(8) Balance sheet data at December 31, 1993 reflects the adoption of
"fresh-start reporting" as discussed in more detail in Note B to
Citicasters' Consolidated Financial Statements, incorporated herein by
reference.
69
<PAGE>
NOBLE
The following data presented below for, and as of the end of each of the
years in the five-year period ended December 31, 1995, has been derived from
Noble's Consolidated Financial Statements audited by Price Waterhouse LLP,
independent accountants. Consolidated balance sheets at December 25, 1994 and
December 31, 1995 and the related consolidated statements of operations and of
cash flows for each of the three years in the period ended December 31, 1995 and
notes thereto are incorporated herein by reference. The report of Price
Waterhouse LLP which also is incorporated herein by reference contains an
explanatory paragraph describing Jacor's agreement to purchase Noble as
described in Note 2 to Noble's Consolidated Financial Statements, incorporated
herein by reference. The following data as of March 31, 1996 and for the three
month periods ended March 26, 1995 and March 31, 1996 are unaudited. In the
opinion of Noble's management, the unaudited statements from which such data
have been derived include all adjustments (consisting only of normal, recurring
adjustments) which are necessary for a fair presentation of results of
operations for such periods. The comparability of the consolidated financial
data has been significantly impacted by acquisitions, dispositions, Noble's
August 1995 restructuring and its December 1991 restructuring.
<TABLE>
<CAPTION>
THREE
MONTHS
YEAR ENDED ENDED
------------------------------------------------------------------------ MARCH
DECEMBER 28, DECEMBER 27, DECEMBER 26, DECEMBER 25, DECEMBER 31, ---------
1991 1992 1993 1994 1995 1995
------------ ------------- ------------- ------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA:(1)
Net revenue..................... $ 58,283 $ 55,368 $ 47,509 $ 49,602 $ 41,902 $ 9,006
Broadcast operating expense..... 44,191 43,565 36,944 37,892 31,445 7,638
------------ ------------- ------------- ------------- ------------- ---------
Station operating income
excluding depreciation and
amortization................... 14,092 11,803 10,565 11,710 10,457 1,368
Depreciation and amortization... 10,005 8,305 6,916 6,311 4,107 1,027
Reduction in carrying value of
assets to net realizable
value.......................... 10,367(2) 7,804(2)
Corporate general and
administrative expenses........ 3,013 2,483 2,702 2,621 2,285 602
------------ ------------- ------------- ------------- ------------- ---------
Operating income (loss)......... 1,074 (9,352) 947 (5,026) 4,065 (261)
Net interest income (expense)... (25,063) (10,126) (7,602) (10,976) (9,913) (2,549)
Net gain (loss) on sale of radio
stations....................... (8,403) 7,909 2,619 2,619
Other income (expense).......... (7,588) (1,905)
------------ ------------- ------------- ------------- ------------- ---------
Income (loss) before income tax,
extraordinary item and
cumulative effect of change in
accounting principle........... $ (31,577) $ (29,786) $ 1,254 $ (16,002) $ (3,229) $ (191)
------------ ------------- ------------- ------------- ------------- ---------
------------ ------------- ------------- ------------- ------------- ---------
Income (loss) from continuing
operations after income taxes
but before extraordinary items
and the cumulative effect of
accounting changes............. $ (31,665) $ (29,874) $ 876 $ (16,038) $ (3,292) $ (207)
------------ ------------- ------------- ------------- ------------- ---------
------------ ------------- ------------- ------------- ------------- ---------
Net income (loss)............... $ (31,665) $ (5,949)(3) $ 13,452(4) $ (16,038) $ 56,853(5) $ (207)
------------ ------------- ------------- ------------- ------------- ---------
------------ ------------- ------------- ------------- ------------- ---------
OTHER FINANCIAL DATA:(1)
Broadcast cash flow(6).......... $ 14,092 $ 11,803 $ 10,565 $ 11,710 $ 10,457 $ 1,368
------------ ------------- ------------- ------------- ------------- ---------
------------ ------------- ------------- ------------- ------------- ---------
Broadcast cash flow margin(7)... 24.18% 21.32% 22.24% 23.61% 24.96% 15.2%
EBITDA(6)....................... $ 11,079 $ 9,320 $ 7,863 $ 9,089 $ 8,172 $ 766
Capital expenditures............ 601 532 3,009 1,124 2,851 532
<CAPTION>
1996
-----------
<S> <C>
OPERATING STATEMENT DATA:(1)
Net revenue..................... $ 6,058
Broadcast operating expense..... 5,626
-----------
Station operating income
excluding depreciation and
amortization................... 432
Depreciation and amortization... 1,079
Reduction in carrying value of
assets to net realizable
value..........................
Corporate general and
administrative expenses........ 577
-----------
Operating income (loss)......... (1,224)
Net interest income (expense)... (1,875)
Net gain (loss) on sale of radio
stations....................... 37,669
Other income (expense)..........
-----------
Income (loss) before income tax,
extraordinary item and
cumulative effect of change in
accounting principle........... $ 34,570
-----------
-----------
Income (loss) from continuing
operations after income taxes
but before extraordinary items
and the cumulative effect of
accounting changes............. $ 19,887
-----------
-----------
Net income (loss)............... $ 10,142(8)
-----------
-----------
OTHER FINANCIAL DATA:(1)
Broadcast cash flow(6).......... $ 432
-----------
-----------
Broadcast cash flow margin(7)... 7.1%
EBITDA(6)....................... $ (145 )
Capital expenditures............ 352
</TABLE>
<TABLE>
<CAPTION>
AS OF
------------------------------------------------------------------------ AS OF
DECEMBER 28, DECEMBER 27, DECEMBER 26, DECEMBER 25, DECEMBER 31, MARCH 31,
1991 1992 1993 1994 1995 1996
------------ ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(1)
Working capital (deficit)....... $ 8,565 $ 2,265 $ 1,002 $(186,133) $ (479) $ (44,285)
Intangible assets (net of
accumulated amortization)(2)... 165,052 125,770 101,555 89,849 50,730 49,965
Total assets.................... 207,272 156,740 128,055 116,023 77,227 63,132
Long-term debt (including
current portion)............... 272,572 231,980 186,975 186,886 81,611 --
Stockholders' equity
(deficit)...................... (114,306) (120,124) (106,672) (122,710) (22,291) (6,589)
</TABLE>
70
<PAGE>
- ------------
(1) The comparability of the information reflected in this selected financial
data is affected by Noble's sale of the operating assets in San Diego
(February 1996); the purchase of radio stations WSPD-AM and WRVF-FM in
Toledo (August 1995); the sale of radio stations KBEQ-FM/AM in Kansas City
(March 1995); the sale of radio stations KMJQ-FM and KYOK-AM in Houston
(December 1994); the sale of radio stations WBAB-FM and WGBB-AM in New York
(March 1993); the sale of WSSH-FM in Boston (April 1993); the purchase of
radio stations KATZ-AM and KNJZ-FM in St. Louis (May 1993); the August 1995
restructuring; and the December 1991 restructuring.
(2) The recorded amount of intangible assets was reduced by $10.4 million as of
December 27, 1992 and $7.8 million as of December 25, 1994 to reflect the
carrying value of the broadcasting assets at their estimated fair market
values.
(3) Net loss for the year ended December 27, 1992 includes, as an extraordinary
item, a gain of $23.9 million relating to debt discharged in the December
1991 restructuring.
(4) Net income for the year ended December 26, 1993 includes, as an
extraordinary item, a $12.2 million gain on forgiveness of debt, and a
$354.0 thousand cumulative effect of a change in accounting principle.
(5) Net income for the year ended December 31, 1995 includes, as an
extraordinary item, a $60.1 million gain resulting from the extinguishment
of debt in association with the August 1995 restructuring.
(6) "Broadcast cash flow" means operating income before reduction in carrying
value of assets, depreciation and amortization and corporate general and
administrative expenses. "EBITDA" means operating income before reduction in
carrying value of assets, depreciation and amortization. Broadcast cash flow
and EBITDA should not be considered in isolation from, or as a substitute
for, operating income, net income or cash flow and other consolidated income
or cash flow statement data computed in accordance with generally accepted
accounting principles or as a measure of a company's profitability or
liquidity. Although this measure of performance is not calculated in
accordance with generally accepted accounting principles, it is widely used
in the broadcasting industry as a measure of a company's operating
performance because it assists in comparing station performance on a
consistent basis across companies without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors such
as historical cost bases. Broadcast cash flow also excludes the effect of
corporate general and administrative expenses, which generally do not relate
directly to station performance.
(7) Broadcast cash flow margin equals broadcast cash flow as a percentage of net
revenue.
(8) Net income for the three months ended March 31, 1996 includes, as an
extraordinary item, a $9.7 million loss on the extinguishment of debt in
association with the pending sale of Noble to Jacor and a $37.7 million gain
from the February 1996 sale of Noble's operating assets in San Diego to
Jacor.
71
<PAGE>
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION
Both Jacor Common Stock and Citicasters Common Stock are listed on the
Nasdaq National Market. Jacor Common Stock is quoted under the symbol "JCOR" and
Citicasters Common Stock is quoted under the symbol "CITI." The following sets
forth, for the calendar quarters indicated, the reported high and low sales
prices of Jacor Common Stock and Citicasters Common Stock, as reported on the
Nasdaq National Market.
<TABLE>
<CAPTION>
JACOR CITICASTERS COMMON
COMMON STOCK STOCK
-------------------- --------------------
HIGH LOW HIGH LOW
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
1994
First Quarter............................................................ $ 17.00 $ 12.00 $ 8.17 $ 6.89
Second Quarter........................................................... 15.75 11.25 8.84 6.84
Third Quarter............................................................ 15.00 12.25 10.00 7.67
Fourth Quarter........................................................... 14.75 10.50 11.00 8.95
1995
First Quarter............................................................ 14.50 12.00 13.61 11.00
Second Quarter........................................................... 17.00 13.00 18.83 13.56
Third Quarter............................................................ 19.25 15.00 26.17 18.33
Fourth Quarter........................................................... 17.50 15.00 25.25 19.75
1996
First Quarter............................................................ 22.25 16.00 29.38 22.00
Second Quarter (through June 20, 1996)................................... 30.50 19.50 31.13 29.25
</TABLE>
On February 12, 1996, the last full trading day prior to the public
announcement of the execution and delivery of the Merger Agreement, the closing
price per share of (i) Jacor Common Stock was $18.50 and (ii) Citicasters Common
Stock was $26.625. On June 20, 1996, the most recent date for which it was
practicable to obtain market price data prior to the printing of this Proxy
Statement/Information Statement/ Prospectus, the closing price per share of (i)
Jacor Common Stock was $27.50 and (ii) Citicasters Common Stock was $30.625
Citicasters paid an annual dividend of $.03 per share of Citicasters Common
Stock during the fourth quarter of 1995. Citicasters paid no dividends during
1994. Jacor has not declared any cash dividend on Jacor Common Stock since its
inception. Jacor intends to retain future earnings for use in its business and
does not anticipate paying any dividends on shares of Jacor Common Stock in the
foreseeable future. Under the Existing Credit Facility, Jacor is prohibited from
paying dividends on Jacor Common Stock except as provided therein. It is
anticipated that the New Credit Facility will also have restrictions on the
payment of dividends. Jacor has no current intent to pay dividends on Jacor
Common Stock. See "THE MERGER-- Financing Arrangements."
On May 31, 1996, there were approximately 1,500 holders of record of Jacor
Common Stock. On June 12, 1996 there were approximately 1,400 holders of record
of Citicasters Common Stock.
BUSINESS OF JACOR
Jacor is a holding company engaged primarily in the radio broadcasting
business. As of March 1, 1996, Jacor entities owned and operated 20 radio
stations located across the United States in six markets: Atlanta, San Diego,
Tampa, Denver, Cincinnati and Jacksonville. Jacor has time brokerage agreements
to provide programming for and sell advertising time for one station in Atlanta,
three stations in St. Louis and three stations in Toledo. Jacor also has joint
sales agreements to sell advertising time for three stations in Cincinnati and
one station in Denver. In addition, Jacor owns and operates the Georgia Radio
News Service, a radio news service which provides news, sports and public
affairs programming to more than 140 radio stations.
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In February 1996, Jacor entered into the Merger Agreement to acquire
Citicasters. The Citicasters acquisition will enhance Jacor's existing station
portfolios in Atlanta, Tampa and Cincinnati and creates new multiple station
platforms in Phoenix, Portland, Kansas City, Sacramento and Columbus. See "THE
MERGER" and "BUSINESS OF CITICASTERS."
In February 1996, Jacor also entered into an agreement to acquire Noble
which owns 10 radio stations serving Denver, St. Louis and Toledo. Pending the
closing of this transaction, Jacor and Noble have entered into time brokerage
agreements with respect to Noble's radio stations in St. Louis and Toledo. Jacor
also acquired from Noble the right to provide programming to and sell the air
time for one AM and one FM station serving the San Diego market. The Noble
Acquisition enhances Jacor's existing portfolio in Denver where it will own
eight stations, in addition to creating new multiple station platforms in St.
Louis and Toledo, where Jacor will own two of the four Class B FM stations. See
"THE NOBLE ACQUISITION."
In February 1996, Jacor sold the business and certain operating assets of
radio stations WMYU(FM) and WWST(FM) in Knoxville. Jacor received approximately
$6.5 million in cash for this sale, representing an approximate $2.5 million
gain. In March 1996, Jacor entered into an agreement for the sale of assets of
WBRD-AM in Tampa. Such sale is pending subject to receipt of the required FCC
approvals.
In March 1996, Jacor entered into an agreement to acquire the FCC licenses
of WCTQ-FM and WAMR-AM in Venice, Florida. Jacor will also purchase certain real
estate and transmission facilities necessary to operate the stations. The
purchase price for the assets is approximately $4.4 million. Jacor anticipates
that it will consummate this acquisition upon receipt of the required FCC
approvals using a portion of the proceeds of the Offerings.
Jacor has agreed to finance the purchase by Critical Mass Media, Inc.
("CMM") for $540,000 of a 40% interest in a newly formed limited liability
company that has agreed to purchase the assets of Duncan American Radio, Inc.
CMM is a marketing research and radio consulting business which is owned by a
limited partnership of which Jacor is the 5% general partner and a corporation
wholly owned by Randy Michaels, the president of Jacor, is the 95% limited
partner.
In May 1996, Jacor entered into an agreement to acquire the FCC licenses of
WIOT-FM and WCWA-AM in Toledo, Ohio. Jacor will also purchase real estate and
transmission facilities necessary to operate the stations. The purchase price
for the assets is $13.0 million. Jacor anticipates that it will consummate this
acquisition upon receipt of the required FCC approvals using a portion of the
proceeds from the Offerings or with funds obtained from available borrowings
under the Existing Credit Facility or the New Credit Facility, whichever is then
in effect. Subject to certain conditions, pending the closing of this
transaction, Jacor has entered into a time brokerage agreement with respect to
these stations.
In June 1996, Jacor entered into an agreement to acquire the FCC licenses of
WLAP-AM, WMXL-FM and WWYC-FM in Lexington, Kentucky. Jacor will also purchase
real estate and transmission facilities necessary to operate the stations. The
purchase price for the assets is $14.0 million. Jacor anticipates that it will
consummate this acquisition upon receipt of the required FCC approvals using a
portion of the proceeds from the Offerings, or with funds obtained from
available borrowings under the Existing Credit Facility or the New Credit
Facility, whichever is then in effect.
Jacor is also currently negotiating acquisitions for additional radio
stations in its existing markets and in new markets. Jacor has entered into two
non-binding letters of intent pursuant to which Jacor and the prospective
sellers have agreed to exclusively negotiate the terms and conditions of a
definitive acquisition agreement, and Jacor is negotiating a definitive
acquisition agreement with a prospective seller pursuant to a non-binding letter
of intent which has expired. If such negotiations are successfully completed,
Jacor would acquire an additional ten radio stations for an aggregate purchase
price of approximately $52.5 million. Jacor is also engaged in active
negotiations to acquire two radio stations in one of its existing markets for an
acquisition price of approximately $37.0 million. Jacor is also currently
engaged in preliminary discussions with owners of other radio stations, which
may or may not result in negotiations for additional acquisitions, including
acquisitions in which Jacor Common Stock may be exchanged in consideration for
the acquired stations. Jacor anticipates that it will consummate any such
acquisitions using a portion of the proceeds from
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the Offerings, or with funds obtained from available borrowings under the
Existing Credit Facility or the New Credit Facility, whichever is then in
effect. There can be no assurance that Jacor will successfully complete any such
acquisitions or what the consequences thereof would be.
During 1995, Jacor actively pursued the acquisition of selected stations in
Jacor's existing markets and targeted new markets and acquired six radio
stations. In August 1995, Jacor acquired the business and certain operating
assets of radio stations WDUV-FM and WBRD-AM in Tampa. In September 1995, Jacor
exercised its purchase option to acquire ownership of the licensee of radio
station KHTS-FM (formerly KECR) in San Diego. In 1995, Jacor acquired the call
letters, programming and certain contracts of radio station WOFX(FM) in
Cincinnati and then changed the call letters of its FM broadcast station WPPT to
WOFX. Jacor also acquired radio stations WSOL-FM (formerly WHJX), WJBT-FM and
WZAZ-AM in Jacksonville. The aggregate cash purchase price for these
acquisitions was approximately $37.7 million.
Additional information concerning Jacor is incorporated by reference in this
Proxy Statement/Information Statement/Prospectus. See "AVAILABLE INFORMATION"
and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
BUSINESS OF CITICASTERS
Citicasters is a holding company engaged in the ownership and operation of
radio and television stations and derives substantially all its revenue from the
sale of advertising time. As of March 1, 1996, Citicasters owned and operated
nineteen radio stations, located across the United States in eight markets:
Atlanta, Phoenix, Tampa, Cincinnati, Portland, Sacramento, Columbus and Kansas
City, and two television stations, one located in Tampa and one in Cincinnati.
In June 1994, the name of Citicasters was changed from Great American
Communications Company to Citicasters Inc. Citicasters' operations are conducted
through its principal subsidiary, Citicasters Co., an Ohio corporation formerly
known as Great American Television and Radio Company, Inc. Additional
information concerning Citicasters is incorporated by reference in this Proxy
Statement/Information Statement/Prospectus. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
BUSINESS OF NEW JACOR
New Jacor, a wholly owned subsidiary of Jacor, has not conducted any
business activities to date, other than those incident to its formation, and its
participation in the preparation of this Proxy Statement/ Information
Statement/Prospectus. Upon the consummation of the Reincorporation, New Jacor
will be the successor corporation to Jacor and will serve as the holding company
for all of Jacor's currently existing subsidiaries. At the Effective Time of the
Merger, New Jacor will become the holding company for Citicasters and its
respective subsidiaries. Upon the consummation of the Noble Acquisition, New
Jacor will also be the holding company for Noble and its respective
subsidiaries. Accordingly, the business of New Jacor, through its wholly-owned
direct and indirect subsidiaries, will be the businesses currently conducted by
Jacor, Citicasters and Noble and their respective subsidiaries. See "BUSINESS OF
JACOR," "BUSINESS OF CITICASTERS," "AVAILABLE INFORMATION" and "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE."
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Jacor currently consists of 40,000,000
shares of Jacor Common Stock, and 2,000,000 shares of Class A Preferred Stock
and 2,000,000 shares of Class B Preferred Stock. At the 1994 Jacor annual
meeting of shareholders, the Jacor shareholders approved an increase in the
number of authorized shares of Jacor Common Stock to 100,000,000 shares.
Following that annual meeting, Jacor's management elected not to immediately
file such amendment to the Jacor Amended and Restated Articles of Incorporation
until such time as Jacor identified a specific purpose for those additional
shares. If the proposals described under "PROPOSAL TO APPROVE THE
REINCORPORATION OF JACOR" are adopted by the Jacor shareholders at the Jacor
Annual Meeting, following the consummation of the Reincorporation, the
authorized capital stock of Jacor will consist of 100,000,000 shares of common
stock, $.01 par value and 2,000,000 shares of Class A Preferred Stock, $.01 par
value and 2,000,000 shares of Class B
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Preferred Stock, $.01 par value. Zell/Chilmark has informed Jacor that it will
vote in favor of such proposal and such votes will be sufficient to approve the
Reincorporation. Upon the consummation of the Reincorporation, each outstanding
share of Jacor common stock, no par value, will automatically be converted into
a share of New Jacor common stock, $.01 par value. As of May 31, 1996,
18,439,694 shares of Jacor Common Stock were issued and outstanding.
COMMON STOCK
Upon the consummation of the Reincorporation, the holders of Jacor Common
Stock will have no preemptive rights, cumulative voting rights, redemption
rights, or conversion privileges. The holders of Jacor Common Stock will be
entitled to one vote for each share held on any matter submitted to the
shareholders. All corporate action requiring shareholder approval, unless
otherwise required by law, Jacor's Certificate of Incorporation or its Bylaws,
must be authorized by a majority of the votes cast. Under Delaware law, approval
by a majority vote of the outstanding voting shares is required to effect (i) an
amendment to Jacor's Certificate of Incorporation or its Bylaws, (ii) a merger
or consolidation of Jacor, and (iii) a disposition of all or substantially all
of Jacor's assets.
In the event of liquidation, each share of Jacor Common Stock will be
entitled to share ratably in the distribution of remaining assets after payment
of all debts, subject to the prior rights in liquidation of any shares of
preferred stock issued. Holders of shares of Jacor Common Stock will be entitled
to share ratably in such dividends as the Jacor Board, in its discretion, may
validly declare from funds legally available therefor, subject to the prior
rights of holders of shares of Jacor's preferred stock as may be outstanding
from time to time. Certain restrictions on the payment of dividends are imposed
under the Existing Credit Facility, and will be imposed under the New Credit
Facility. See "RISK FACTORS--Restrictions on Dividends."
CLASS A AND CLASS B PREFERRED STOCK
Upon the consummation of the Reincorporation, 2,000,000 authorized shares of
Class A Preferred Stock and 2,000,000 authorized shares of Class B Preferred
Stock of Jacor's capital stock will be authorized. It is not currently
anticipated that any such shares will be issued. The Class A Preferred Stock
will have full voting rights. The Class B Preferred Stock will have no voting
rights except as otherwise provided by law or as lawfully fixed by the Jacor
Board with respect to a particular series. Under applicable law, the Jacor Board
could elect to provide the Class B Preferred Stock with limited or no voting
rights. Jacor's Certificate of Incorporation authorizes the Jacor Board to
provide from time to time for the issuance of the shares of Preferred Stock in
series by adopting an amendment to the Certificate and to establish the terms of
each such series, including (i) the number of shares of the series and the
designation thereof; (ii) the rights in respect of dividends on the shares;
(iii) liquidation rights; (iv) redemption rights; (v) the terms of any purchase,
retirement or sinking fund to be provided for the shares of the series; (vi)
terms of conversion, if any; (vii) restrictions, limitations and conditions, if
any, on issuance of indebtedness of Jacor; and (viii) any other preferences and
other rights and limitations not inconsistent with law, the Certificate of
Incorporation, or any resolution of the Jacor Board. See "COMPARISON OF
CORPORATE CHARTERS AND RIGHTS OF SECURITY HOLDERS."
1993 WARRANTS
The 1993 Warrants to purchase 2,014,233 shares of Jacor Common Stock were
issued by Jacor in 1993. Through May 31, 1996, 205,624 1993 Warrants were
exercised. As of June 12, 1996, all 1993 Warrants which had not been exercised
prior to such date were converted by Jacor into the right to receive fair market
value (as defined in the 1993 Warrant), which amount was fixed at $19.70 per
1993 Warrant.
The 1993 Warrants were registered warrants issued under a warrant agreement.
Each 1993 Warrant entitled the holder to purchase one share of Jacor Common
Stock at the price of $8.30 per share. Pursuant to the terms of the 1993
Warrants, upon the happening of any Sale Event (as defined below), Jacor, in its
sole discretion, was permitted to automatically convert the 1993 Warrants into
the right to receive the fair market value of the 1993 Warrants, whereupon the
1993 Warrants would cease to be exercisable for shares of Jacor Common Stock.
The 1993 Warrants defined "Sale Event" generally to mean any of the following:
(a) a sale or other disposition of all or a substantial portion of the assets of
Jacor; (b) a share exchange; (c) a sale or other disposition of securities of
Jacor constituting more than 30% of the voting power of Jacor's voting
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stock to one or more entities or persons not controlled by Samuel Zell or David
Schulte; and (d) certain business combinations resulting in the shares of
Jacor's voting stock outstanding immediately prior to the Sale Event
constituting 70% or less of Jacor's combined voting power immediately after such
Sale Event.
The 1996 Stock Offering constituted a Sale Event, and Jacor converted the
1993 Warrants into the right to receive the fair market value as of June 12,
1996. Prior to such conversion, Zell/Chilmark exercised its 1993 Warrants to
acquire 629,117 shares of Common Stock in lieu of accepting the fair market
value of the 1993 Warrants it held for proceeds to Jacor totaling approximately
$5.2 million. The holders of approximately 883,639 other 1993 Warrants also
exercised their right to acquire shares of Jacor Common Stock for additional
proceeds to Jacor totaling approximately $7.3 million. The holders of
approximately 295,853 remaining 1993 Warrants elected to receive the fair market
value. Jacor will be required to fund approximately $5.8 million based on a fair
market value of $19.70 per 1993 Warrant (the difference between the $28.00 per
share of Common Stock sale price in the 1996 Stock Offering and the $8.30
exercise price per 1993 Warrant). Jacor intends to fund the conversion of such
1993 Warrants when presented for redemption with a portion of the proceeds
received from the exercise of 1993 Warrants by the other holders.
JACOR WARRANTS
For a description of the Jacor Warrants to be issued in the Merger, see "THE
MERGER--Description of the Jacor Warrants."
COMPARISON OF CORPORATE CHARTERS AND RIGHTS OF SECURITY HOLDERS
Jacor is currently incorporated under the laws of the State of Ohio, and the
Jacor Board is recommending to Jacor shareholders for approval at the Jacor
Annual Meeting that Jacor be reincorporated as a corporation under the laws of
the State of Delaware. Upon the consummation of the Reincorporation, Jacor
shareholders, whose rights as shareholders are currently governed by Ohio law,
Jacor's existing Amended and Restated Articles of Incorporation (the "Present
Jacor Articles") and Jacor's Amended and Restated Code of Regulations (the
"Present Jacor Regulations"), will become shareholders of New Jacor and their
rights as such will be governed by Delaware law, New Jacor's Certificate of
Incorporation (the "New Jacor Certificate") and the New Jacor Bylaws (the "New
Jacor Bylaws"). See "PROPOSAL TO APPROVE THE REINCORPORATION OF JACOR."
Citicasters is incorporated under the laws of the State of Florida and
Citicasters shareholders rights are governed by Florida law, Citicasters
Articles of Incorporation (the "Citicasters Articles") and Citicasters Bylaws
(the "Citicasters Bylaws"). Upon consummation of the Merger and receipt of the
Merger Consideration, Citicasters shareholders will become security holders of
New Jacor (to be renamed "Jacor Communications, Inc."), and, accordingly, their
rights will be governed by Delaware law, the New Jacor Certificate and the New
Jacor Bylaws.
The following is a summary of the material differences in the rights of
Jacor shareholders following the Reincorporation and in the rights of
Citicasters shareholders following the Merger. The following summary does not
purport to be a complete statement of the rights of Jacor shareholders under
applicable Ohio and Delaware laws or of the rights of Citicasters shareholders
under applicable Florida and Delaware laws, or a complete description of the
specific provisions referred to herein. The following comparison is qualified in
its entirety by reference to the New Jacor Certificate, the New Jacor Bylaws,
the Present Jacor Articles, the Present Jacor Regulations, the Citicasters
Articles and the Citicasters Bylaws and the statutory provisions referred to
therein.
COMPARISON OF PRESENT JACOR ARTICLES AND NEW JACOR CERTIFICATE
The New Jacor Certificate and the New Jacor Bylaws are similar to the
Present Jacor Articles and the Present Jacor Regulations with respect to
material provisions. Differences between the New Jacor Certificate and New Jacor
Bylaws and the Present Jacor Articles and Present Jacor Regulations,
respectively, are primarily the result of differences between Delaware law and
Ohio law. Significant provisions of the New Jacor Certificate and New Jacor
Bylaws and certain important similarities and differences between them and the
Present Jacor Articles and the Present Jacor Regulations are discussed below.
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CAPITAL STOCK. As described under "DESCRIPTION OF CAPITAL STOCK," the
capitalization of New Jacor will consist of 100,000,000 shares of Common Stock,
par value $.01 per share (the "New Jacor Common Stock"), 2,000,000 shares of
Class A Preferred Stock, par value $.01 per share (the "New Jacor Class A
Preferred Stock"), and 2,000,000 shares of Class B Preferred Stock, par value
$.01 per share (the "New Jacor Class B Preferred Stock" and together with the
New Jacor Class A Preferred Stock, the "New Jacor Preferred Stock"). Other than
for effecting the action approved at the 1994 Jacor annual meeting of the
shareholders to change the number of authorized shares of New Jacor Common
Stock, the provisions of the New Jacor Certificate setting the terms of the New
Jacor Common Stock are unchanged from the provisions of the Present Jacor
Articles with regard to the Jacor Common Stock.
With respect to existing Jacor Preferred Stock, the provisions of the New
Jacor Certificate differ from those of the Present Jacor Articles with respect
to the manner in which the directors may fix the terms of a series of the
Preferred Stock and the terms which may be so fixed. Under Delaware law,
directors fix the terms of a series of New Jacor Preferred Stock by resolution,
as opposed to an actual amendment to a company's articles of incorporation, as
under Ohio law. In addition, under Delaware law, directors have authority to
provide for different voting rights between series of preferred stock whereas,
under Ohio law, directors do not have this right. Both the Present Jacor
Articles and the New Jacor Certificate permit the Board of Directors to exercise
broad discretion in fixing the terms of series of New Jacor Preferred Stock,
which in the case of the New Jacor Certificate, is subject to Delaware law and
the terms of the New Jacor Certificate.
PREEMPTIVE RIGHTS. Both the Present Jacor Articles and the New Jacor
Certificate provide that no shareholder shall have preemptive rights to purchase
shares.
CUMULATIVE VOTING. Under the Present Jacor Regulations, if notice is
properly given by a shareholder, directors are elected by cumulative voting,
with the nominees who receive the greatest number of votes being elected to the
Board of Directors and each shareholder being permitted to cumulate the voting
power such shareholder possesses by giving any one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of votes
to which such shareholder is entitled, or to distribute such number of votes on
the same principle among two or more candidates, as such shareholder sees fit.
Under the Present Jacor Regulations, it is therefore possible for the holders of
less than a majority of the voting power of Jacor to elect one or more of
Jacor's directors, and it is not always possible for the holders of a majority
of the voting power to elect all of the directors of Jacor. The New Jacor
Certificate and New Jacor Bylaws do not provide for cumulative voting in the
election of directors, accordingly, the holders of a majority of the voting
power of New Jacor will be able to elect all of the directors of New Jacor.
AMENDMENTS TO REGULATIONS AND BYLAWS. Under Ohio law, only the shareholders
have the power to adopt, amend or repeal regulations; such power may not be
conferred upon the directors. A Delaware corporation may in its certificate of
incorporation confer the power to adopt, amend or repeal bylaws upon the
directors. Under the New Jacor Certificate, the directors of New Jacor are
granted such power, although such power does not preempt or otherwise affect the
power of New Jacor shareholders also to amend the New Jacor Bylaws.
BOARD OF DIRECTORS; COMMITTEES. Under the Present Jacor Regulations, the
number of directors which shall constitute the Board of Directors is determined
by shareholder vote or by the directors, provided that such number of directors
shall be not less than five and not more than fifteen. Under the New Jacor
Bylaws, the number of directors shall be determined by resolution of the New
Jacor Board of Directors (the "New Jacor Board") provided that such number shall
be seven unless otherwise designated by the New Jacor Board.
Under Delaware law, no director or officer of New Jacor is disqualified by
his office from dealing or contracting with New Jacor as a vendor, purchaser,
employee, agent or otherwise, nor is any transaction of New Jacor void or
voidable or in any way affected or invalidated by reason of the fact that any
director or officer or any firm of which any director or officer is a member or
any corporation of which any director or officer is a shareholder, director or
officer is in any way interested in such transaction, provided the fact that
such director, officer, firm or corporation is so interested is disclosed or is
known to the Board of Directors or such members thereof as shall be present at
any meeting of the Board of Directors at which action upon
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any such transaction is taken; nor is any such director, or officer accountable
for or responsible to New Jacor or any stockholder of New Jacor for or in
respect to any such transaction of New Jacor for any gains or profits realized
by him, by reason of the fact that he, or any firm of which he is a member, or
any corporation of which he is a shareholder, director or officer is interested
in such transaction, and any such director may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of Jacor which
shall authorize or take action in respect to any such transaction, and may vote
thereat to authorize, ratify or approve any such transaction, with like force
and effect as if he, or any firm of which he is a member, or any corporation of
which he is a shareholder, officer or director were not interested in such
transaction.
In order to provide such rights to a director, Ohio law requires the
Articles of Incorporation to contain a provision of like effect. The Present
Jacor Articles contain no such provision.
The Present Jacor Regulations and Ohio law require that the Jacor Board
designate three or more of its members to constitute any committee of the Board.
Under the New Jacor Bylaws, the New Jacor Board may appoint from its members a
committee of the New Jacor Board which shall consist of any number of directors
(including only one) as such Board may designate.
DIRECTOR LIABILITY AND INDEMNIFICATION. Under Ohio law, with certain
exceptions, a director is liable for monetary damages for actions or omissions
as a director only if it is proved by clear and convincing evidence that the
director acted or failed to act with deliberate intent to cause injury to the
corporation or with reckless disregard for the best interests of the
corporation. There is, however, no provision limiting the liability of officers,
employees, or agents of the corporation. Additionally, Ohio law protects a
director from liability for breach of the director's duty of loyalty to the
corporation as well as for breach of the director's duty of care. Ohio law
provisions concerning director liability are self-executing and the Jacor
directors are currently entitled to such protections without reference thereto
in the Present Jacor Articles.
Under Delaware law, subject to certain exceptions, a director is protected
from monetary liability for breaches of his or her duty of care. Delaware law
provides for such a limitation on director liability if the certificate of
incorporation contains a provision to that effect. The New Jacor Certificate
contains such a provision. Such a provision does not, however, eliminate or
limit director liability for a breach of the director's duty of loyalty to the
corporation or its shareholders or for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, for willful
or negligent conduct in paying dividends or repurchasing stock out of other than
legally available funds, or for any transaction from which the director derived
an improper personal benefit.
The indemnification provisions contained in the Present Jacor Regulations
are in accordance with Ohio law which allows indemnification of any person who
was or is a party or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, other than action by or in the right of Jacor,
by reason of the fact that he or she is or was a director, officer, employee or
agent of Jacor, or is or was serving at the request of Jacor as a director,
trustee, officer, employee or agent of another corporation, domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust or other enterprise,
against expenses, including attorney's fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
Jacor, and with respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful. Ohio law also allows Jacor
to indemnify or agree to indemnify any person who was or is a party or is
threatened to be made a party, to any threatened, pending, or completed action
or suit by or in the right of Jacor to procure a judgment in its favor by reason
of the fact that he or she is or was a director, officer, employee or agent of
Jacor, or is or was serving at the request of Jacor as a director, trustee,
officer, employee or agent of another corporation, domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust or other enterprise,
against expenses, including attorney's fees, actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if he or she acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of Jacor, except that no indemnification
may be made with respect to any claim, issue or matter as to which such person
is adjudged to be liable for negligence or misconduct in the
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performance of his duty to Jacor unless, and only to the extent that a court
determines upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
The statutory right of indemnification is not exclusive in Ohio, and Ohio
corporations may, among other things, purchase insurance to indemnify those
persons. Ohio law provides that a director (but not an officer, employee or
agent) is entitled to mandatory advancement of expenses, including attorneys'
fees, incurred in defending any action, including derivative actions, brought
against the director, provided the director agrees to cooperate with the
corporation concerning the matter and to repay the amount advanced if it
ultimately is determined that he or she is not entitled to be indemnified by the
corporation.
The New Jacor Bylaws are similar to the Present Jacor Regulations with
regard to indemnification except that in accordance with the Delaware law, New
Jacor may not indemnify such persons against expenses incurred by such person in
connection with the defense or settlement of an action or suit by or in the
right of New Jacor to procure a judgment in its favor if such persons shall have
been adjudged to be liable to New Jacor unless and only to the extent that a
court determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnification for such expenses which the court shall
deem proper.
COMPROMISE WITH CREDITORS AND SHAREHOLDERS. Delaware law provides that a
certificate of incorporation may contain a provision allowing for a compromise
or arrangement between a corporation and its creditors or shareholders. Under
such a provision, whenever such a compromise or arrangement is proposed, a
Delaware court may order a meeting for the purpose of eliciting an agreement to
the compromise or the arrangement which would be binding on all such creditors
and/or shareholders and the corporation. The New Jacor Certificate contains such
a provision. No such provision allowing for such compromise or arrangement is
included in the Present Jacor Regulations or available under Ohio law.
COMPARISON OF JACOR SHAREHOLDERS' RIGHTS UNDER OHIO LAW AND DELAWARE LAW
AMENDMENT OF ARTICLES/CERTIFICATE OF INCORPORATION. To amend articles of
incorporation, Ohio law requires the approval of shareholders holding two-thirds
of the voting power of a corporation, unless otherwise specified in the
corporation's articles of incorporation. The Present Jacor Articles are silent
with respect to the vote required to amend the Present Jacor Articles. Delaware
law requires the approval of shareholders holding a majority of the voting power
of a corporation in order to amend the corporation's certificate of
incorporation, unless another proportion is specified in the certificate of
incorporation. The New Jacor Certificate does not specify another proportion.
Accordingly, although neither the Present Jacor Articles nor the New Jacor
Certificate contain a provision regarding the vote required to amend the
respective corporation's charter, the effect of the Reincorporation will be to
allow the New Jacor Certificate to be amended by shareholders holding a majority
of the voting power of a corporation, rather than two-thirds of the voting power
of a corporation as currently required to amend the Present Jacor Articles.
RIGHT TO CALL SPECIAL MEETING OF SHAREHOLDERS. Under Ohio law, the holders
of at least 25% of the outstanding shares of a corporation have the authority to
call special meetings of shareholders, unless the corporation's regulations
specify another percentage, which may in no case be greater than 50%. The
Present Jacor Regulations currently provide that the holders of at least 10% of
the outstanding shares have the authority to call special meetings of
shareholders. Delaware law does not require that shareholders be given the right
to call special meetings. Nevertheless, the New Jacor Bylaws provide that
special meetings may be called by one-third of the directors then in office
(rounded up to the nearest whole number), by the chief executive officer or by
shareholders holding at least 10% of all issued and outstanding stock entitled
to vote at the meeting.
ANTI-TAKEOVER PROVISIONS. Chapter 1704 of the Ohio Revised Code prohibits an
"Issuing Public Corporation" from engaging in a "Chapter 1704 Transaction" with
an "Interested Shareholder" for a period of three years following the date on
which the person become an Interested Shareholder unless, prior to such date,
the directors of the Issuing Public Corporation approve either the Chapter 1704
Transaction or the acquisition of shares pursuant to which such person became an
Interested Shareholder. Jacor is an Issuing Public Corporation for purposes of
the statute. An Interested Shareholder is any person who is the beneficial
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owner of a sufficient number of shares to allow such person, directly or
indirectly, alone or with others, including affiliates and associates, to
exercise or direct the exercise of 10% of the voting power of the Issuing Public
Corporation in the election of directors.
A Chapter 1704 Transaction includes any merger, consolidation, combination,
or majority share acquisition between or involving an Issuing Public Corporation
and an Interested Shareholder or an affiliate or associate of an Interested
Shareholder. A Chapter 1704 Transaction also includes certain transfers of
property, dividends and issuance or transfers of shares, from or by an Issuing
Public Corporation or a subsidiary of an Issuing Public Corporation to, with or
for the benefit of an Interested Shareholder or an affiliate or associate of an
Interested Shareholder unless such transaction is in the ordinary course of
business of the Issuing Public Corporation on terms no more favorable to the
Interested Shareholder than those acceptable to third parties as demonstrated by
contemporaneous transactions. Finally, Chapter 1704 Transactions include certain
transactions which (a) increase the proportionate share ownership of an
Interested Shareholder, (b) result in the adoption of a plan or proposal for the
dissolution, winding up of the affairs or liquidation of the Issuing Public
Corporation if such plan is proposed by or on behalf of the Interested
Shareholder or (c) pledge or extend the credit or financial resources of the
Issuing Public Corporation to or for the benefit of the Interested Shareholder.
After the initial three-year moratorium has expired, an Issuing Public
Corporation may engage in a Chapter 1704 Transaction if (a) the acquisition of
shares pursuant to which the person became an Interested Shareholder received
the prior approval of the board of directors of the Issuing Public corporation,
(b) the Chapter 1704 Transaction is approved by the affirmative vote of the
holders of shares representing at least two-thirds of the voting power of the
Issuing Public Corporation and by the holders of shares representing at least a
majority of voting shares which are not beneficially owned by an Interested
Shareholder or an affiliate or associate of an Interested Shareholder or (c) the
Chapter 1704 Transaction meets certain statutory tests designed to ensure that
it be economically fair to all shareholders.
Ohio law prevents a person, under certain circumstances, from purchasing
large amounts of shares of stock of a corporation without shareholder approval.
Under Section 1701.831 of the Ohio Revised Code, unless the articles or
regulations otherwise provide, any "control share acquisition" of an Issuing
Public Corporation can only be made with the prior approval of the corporation's
shareholders. A control share acquisition is defined as any acquisition,
directly or indirectly (by tender offer, open market purchase, private
transaction or otherwise) of shares of a corporation which, when added to all
other shares of that corporation owned by the acquiring person, would entitle
that person to exercise specified levels of voting power when electing
directors. Specifically, unless the provisions of Section 1701.831 have been
satisfied, a person may not purchase additional shares of a corporation if that
purchase would result in such person holding more than 20%, 33 1/3% or 50% of
the voting power. These percentages reflect the Ohio legislature's view that
each such acquisition of shares which results in a person's voting power
exceeding these levels involves an increase in the ability of that person to
control a corporation. These levels of voting power are considered so great that
the transaction involved should be considered and approved or rejected by
shareholders. The Present Jacor Regulations provide that Section 1701.831 does
not apply to control share acquisitions of shares of Jacor.
Delaware's anti-takeover provisions are embodied in Section 203 of the
Delaware General Corporation law ("Section 203"). Section 203 provides that
certain "business combinations" between a Delaware corporation whose stock
generally is publicly traded or held of record by more than 2,000 shareholders
and an "interested stockholder" are prohibited for a three-year period following
the date that such stockholder became an interested stockholder, unless (i) the
corporation has elected in its certificate of incorporation not to be governed
by Section 203, (ii) the business combination was approved by the Board of
Directors of the corporation before the other party to the business combination
became an interested stockholder, (iii) upon consummation of the transaction
that made it an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the commencement
of the transaction (excluding voting stock owned by directors who are also
officers or held in employee benefit plans in which the employees do not have a
confidential right to tender or vote stock held by the plan) or (iv) the
business combination was approved by the Board of Directors of the corporation
and ratified by two-thirds of the voting stock which the interested stockholder
did not own. The three-year prohibition also does not apply to
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certain business combinations proposed by an interested stockholder following
the announcement or notification of certain extraordinary transactions involving
the corporation and a person who had not been an interested stockholder during
the previous three years or who became an interest stockholder with the approval
of the majority of the corporation's directors.
The term "business combination" is defined generally to include mergers or
consolidations between a Delaware corporation and an interested stockholder,
transactions with an interested stockholder involving the assets or stock of the
corporation or its majority-owned subsidiaries and transaction which increase an
interested stockholder's percentage ownership of stock. The term "interested
stockholder" is defined generally as a stockholder who, together with affiliates
and associates, owns (or, within three years prior, did own) 15% or more of a
Delaware corporations' voting stock. Section 203 could prohibit or delay a
merger, takeover or other change in control of the Company and therefore could
discourage attempts to acquire the Company.
The New Jacor Certificate does not contain a provision electing not to be
governed by Section 203. The Jacor Board believes that the provisions of Section
203 will help assure that a change in control of Jacor does not occur without
the consent of the Jacor Board and/or shareholders of Jacor and will encourage
any person who seeks to acquire control of Jacor to do so by a negotiated
transaction rather than through a hostile takeover attempt.
MERGERS, ACQUISITIONS AND OTHER TRANSACTIONS. In addition to the
anti-takeover provisions discussed above, Ohio law generally requires approval
of mergers, dissolutions and dispositions of all or substantially all of a
corporation's assets by two-thirds of the voting power of the corporation,
unless the articles of incorporation permit a different proportion. The Present
Jacor Articles are silent with respect to the vote required to approve such
mergers, dissolutions and dispositions. Ohio law does not require shareholder
approval of asset or share acquisitions.
In general, Delaware law requires approval of mergers and dispositions of
all or substantially all of a corporation's assets by a majority of the voting
power of the corporation. Like, Ohio law Delaware law does not require
shareholder approval in the case of asset and share acquisitions.
Although neither the Present Jacor Articles nor the New Jacor Certificate
contain any provision regarding the vote required to approve asset and share
acquisitions and mergers and dispositions of all or substantially all of a
corporation's assets, the effect of the Reincorporation will be to allow asset
and share acquisitions to be approved by the New Jacor Board, without
stockholder approval, and will allow mergers and dispositions of all or
substantially all of New Jacor's assets to be approved by shareholders holding a
majority of the voting power of the corporation, rather than two-thirds of the
voting power of a corporation as currently required with respect to Jacor.
ACTION WITHOUT A MEETING. Under Ohio law, unless the articles of
incorporation or the regulations provide otherwise, any action which may be
taken by shareholders or directors at a meeting may be taken without a meeting
upon the unanimous written consent of the shareholders or directors,
respectively. Neither the Present Jacor Articles nor the Present Jacor
Regulations provide otherwise. Delaware law provides that unless limited by the
certificate of incorporation, any action which may be taken at a meeting of
shareholders may be taken without a meeting, without prior notice and without a
vote, if the holders of stock having not less than the minimum number of votes
otherwise required to approve such action consent in writing. The New Jacor
Certificate contains no such limitation and, accordingly, following the
Reincorporation, Jacor shareholders could take certain actions upon the written
consent of less than all of the Jacor shareholders.
CLASS VOTING. Under Ohio law, holders of a particular class of shares are
entitled to vote as a separate class if the rights of such class are affected in
certain respects by mergers, consolidations or amendments to the articles of
incorporation. Delaware law requires voting by separate classes only with
respect to amendments to the certificate of incorporation which adversely affect
the holders of such classes or which increase or decrease the aggregate number
of authorized shares or the par value of the shares of any such classes.
LOANS TO OFFICERS. Under Ohio law, directors of an Ohio corporation who vote
for or assent to the making of loans (other than in the usual course of
business) to an officer, director or shareholder of the
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corporation are jointly and severally liable to the corporation for the amount
of the loan, with interest thereon at the rate of six percent per annum, until
the loan has been paid. Delaware law permits a corporation to lend money to, or
to guarantee an obligation of, an officer or other employee of the corporation
or any subsidiary thereof including an officer or employee who is also a
director of the corporation or of its subsidiaries, whenever such loan or
guarantee may, in the judgment of the directors, reasonably be expected to
benefit the corporation. Unlike Ohio law, Delaware law generally does not impose
liability on the directors who vote for or assent to the making of a loan to an
officer, director or shareholder.
APPRAISAL RIGHTS. Under Ohio law, dissenting shareholders are entitled to
appraisal rights in connection with the lease, sale, exchange, transfer or other
disposition of all or substantially all of the assets of a corporation and in
connection with certain amendments to the corporation's articles of
incorporation. In addition, shareholders of an Ohio corporation being merged
into a surviving corporation or being consolidated into a new corporation are
also entitled to appraisal rights. Shareholders of an acquiring corporation are
entitled to appraisal rights in a merger, combination or majority share
acquisition in which such shareholders are entitled to voting rights.
Under Delaware law, appraisal rights are available only in connection with
certain mergers or consolidations, unless otherwise provided in the
corporation's certificate of incorporation. Even in the event of such mergers or
consolidations, unless the certificate of incorporation otherwise provides,
Delaware law does not recognize appraisal rights (i) if the shares of the
corporation are listed on a national securities exchange or held of record by
more than 2,000 shareholders (as long as the shareholders receive in the merger
shares of the surviving corporation or of any other corporation the shares of
which are listed on a national securities exchange or held of record by more
than 2,000 shareholders) or (ii) if the corporation is the surviving corporation
and no vote of its shareholders is required for the merger.
DIVIDENDS. An Ohio corporation may pay cash dividends only out of surplus
and must notify its shareholders if a dividend is paid out of capital surplus. A
Delaware corporation may pay dividends out of any surplus and, if it has no
surplus, out of any net profits for the fiscal year in which the dividend was
declared or for the preceding fiscal year (provided that such payment will not
reduce capital below the amount of capital represented by all classes of shares
having a preference upon the distribution of assets).
REPURCHASES OF STOCK. Under Ohio law, a corporation may not purchase or
redeem its own shares unless authorized to do so by its articles of
incorporation and then may not do so if immediately thereafter its assets would
be less than its liabilities plus its stated capital, if any, or if the
corporation is insolvent or would be rendered insolvent by such a purchase or
redemption. The Present Jacor Articles authorize Jacor to purchase its own
shares when authorized by a majority of the Jacor Board for such prices and upon
such terms as the Board of Directors may determine.
Under Delaware law, a corporation may purchase or redeem, or otherwise deal
in and with its own shares; provided, however, that no corporation is permitted
to purchase or redeem its own shares of capital stock for cash or other property
when the capital of the corporation is impaired or when such purchase or
redemption would cause any impairment of the capital of the corporation, except
that a corporation may purchase or redeem out of capital any of its own shares
which are entitled upon any distribution of its assets, whether by dividend or
liquidation, to a preference over another class or series of its stock if such
shares will be retired upon their acquisition and the capital of the corporation
reduced in accordance with the Delaware law.
Unlike Ohio law, Delaware law also expressly provides that a corporation may
make any class of stock, including common stock, subject to redemption, at the
option of the corporation in such cases where the corporation holds a
governmental license which is conditioned upon some or all of the holders of the
corporation's stock possessing prescribed qualifications, to the extent
necessary to prevent the loss of such license or to reinstate it. As permitted
by Delaware law, the New Jacor Certificate contains a provision that permits the
New Jacor Board to redeem all or some of the shares of New Jacor stock from a
shareholder whose ownership of stock may result in the loss or failure to secure
the reinstatement of any governmental license necessary to conduct the business
of New Jacor or its subsidiaries.
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ANTI-GREENMAIL STATUTE. "Greenmail" is the practice whereby a corporation
purchases the shares of a substantial minority shareholder at a premium to avoid
the future potential takeover of the corporation by that minority shareholder.
Ohio law contains an anti-greenmail statute which would cause the forfeiture of
any premium received by the minority shareholder. Although Ohio law permits a
corporation to opt out of the anti-greenmail statutes, Jacor has not opted out.
Delaware law contains no anti-greenmail statute.
COMPARISON OF NEW JACOR CERTIFICATE AND CITICASTERS ARTICLES
Upon consummation of the Merger and the exercise, if any, of the Jacor
Warrants, shareholders of Citicasters would become shareholders of New Jacor.
Shareholders of Citicasters should note the following differences between the
Citicasters Articles and the New Jacor Certificate and between the FBCA and
Delaware law as they affect the rights of shareholders.
PREEMPTIVE RIGHTS. The Citicasters Articles provide for certain preemptive
rights to Citicasters shareholders. The New Jacor Certificate provides that no
shareholder shall have preemptive rights to purchase shares.
CUMULATIVE VOTING. Under the FBCA directors may not be elected by cumulative
voting unless a provision to such effect is included in a corporation's articles
of incorporation. The Citicasters Articles contain no such provision. The New
Jacor Certificate and New Jacor Bylaws do not provide for cumulative voting in
the election of directors.
AMENDMENTS TO REGULATIONS AND BYLAWS. The Citicasters Bylaws provided that
the Citicasters Board may repeal or amend the existing Citicasters Bylaws or
adopt new bylaws. Under the New Jacor Certificate, the directors of New Jacor
are granted such power, although such power does not preempt or otherwise affect
the power of Jacor shareholders also to amend the New Jacor Bylaws.
BOARD OF DIRECTORS; COMMITTEES. Under the Citicasters Articles, the number
of directors which shall constitute the Citicasters Board may be fixed by such
Board of Directors, but shall not be less than two nor more than twenty. Under
the New Jacor Bylaws, the number of directors shall be determined by resolution
of the New Jacor Board provided that such number shall be seven unless otherwise
designated by the New Jacor Board.
COMPROMISE WITH CREDITORS AND SHAREHOLDERS. Delaware law provides that a
certificate of incorporation may contain a provision allowing for a compromise
or arrangement between a corporation and its creditors or shareholders. Under
such a provision, whenever such a compromise or arrangement is proposed, a
Delaware court may order a meeting for the purpose of eliciting an agreement to
the compromise or the arrangement which would be binding on all such creditors
and/or shareholders and the corporation. The New Jacor Certificate contains such
a provision, whereas the same is not available under either the Citicasters
Articles or the FBCA.
COMPARISON OF SHAREHOLDERS' RIGHTS UNDER FLORIDA LAW AND DELAWARE LAW
AMENDMENT OF ARTICLES/CERTIFICATE OF INCORPORATION. Except with regard to
minor amendments, all amendments to the Articles of Incorporation of a Florida
corporation must be approved by the majority of all the votes entitled to be
cast by that voting group, unless the Articles require a greater or lesser vote.
The Citicasters Articles do not provide otherwise. The right to amend the New
Jacor Bylaws under Delaware law and the New Jacor Certificate is discussed above
under "Amendment of Articles/Certificate of Incorporation."
ANTI-TAKEOVER PROVISIONS. Section 607.0901 of the FBCA, informally known as
the "Fair Price Statute," provides that the approval of the holders of
two-thirds of the voting shares of a company, other than the shares owned by an
"Interested Stockholder" would be required in order to effectuate certain
transactions, including, without limitation, a merger, sale of assets, sale of
shares and reclassification of securities involving a corporation and an
Interested Stockholder. A corporation may "opt out" of the provisions of Section
607.0901. The Citicasters Articles provide that Citicasters will not be governed
by the provisions of Sections 607.0901 of the FBCA.
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Section 607.0902 of the FBCA, informally known as the "Florida Control Share
Acquisition Statute," provides that the voting rights to be accorded "Control
Shares" of a Florida corporation that has (i) 100 or more shareholders, (ii) its
principal place of business, its principal office, or substantial assets in
Florida and (iii) either (A) more than 10% of its shareholders residing in
Florida, (B) more than 10% of its shares owned by Florida residents or (C) 1,000
shareholders residing in Florida, must be approved by a majority of each class
of voting securities of the corporation, excluding those shares held by
interested persons, before the Control Shares will be granted any voting rights.
The Citicasters Articles provide that Citicasters will not be governed by the
provisions of Sections 607.0902 of the FBCA. The Delaware Business Combinations
Statute is described above in "Anti-Takeover Provisions."
MERGERS, ACQUISITIONS AND OTHER TRANSACTIONS. The FBCA provides that the
sale, lease, exchange or disposal of all, or substantially all, of the assets of
a Florida corporation, not in the ordinary course of business, as well as any
merger, consolidation or share exchange, generally must be recommended by the
Board of Directors and approved by a vote of a majority of the shares of each
class of the stock of the corporation entitled to vote on such matters. Under
the FBCA, the vote of the shareholders of a corporation surviving a merger is
not required if: (i) the articles of incorporation of the surviving corporation
will not substantially differ from its articles before the merger; and (ii) each
shareholder of the surviving corporation before the effective date will hold the
same number of shares, with identical designations, preferences, limitations and
relative rights immediately after the merger. The vote required to approve
certain mergers and other corporate actions under Delaware law and the New Jacor
Certificate is discussed above under "Mergers, Acquisitions and Other
Transactions."
APPRAISAL RIGHTS. The FBCA provides appraisal rights in connection with (i)
a merger, except that such rights are not provided when (a) no vote of the
shareholders is required for the merger or (b) shares of the corporation are
listed on a national securities exchange, traded on the Nasdaq National Market,
or held of record by not fewer than 2,000 shareholders; (ii) a sale of
substantially all the assets of a corporation (with similar restrictions as
provided under Delaware law for mergers); (iii) amendments to the articles of
incorporation that may adversely affect the rights or preferences of
shareholders; and (iv) a Control Share Acquisition. Delaware law provides
appraisal rights as described above in "Appraisal Rights."
DIVIDENDS. A Florida corporation may make distributions to shareholders as
long as, after giving effect to such distribution, the corporation will be able
to pay its debts as they become due in the usual course of business and the
corporation's total assets will not be less than the sum of its total
liabilities plus (unless the articles of incorporation permit otherwise) the
amount that would be needed, if the corporation were to be dissolved at the time
of the distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those receiving the
distribution. A Delaware corporation may pay dividends out of surplus or, if
there is no surplus, out of net profits for the fiscal year in which declared or
for the preceding fiscal year.
REPURCHASES OF STOCK. Both Florida and Delaware corporations may generally
purchase or redeem their own shares of capital stock.
LIMITATION ON DIRECTOR'S LIABILITY. The FBCA provides that directors of a
corporation will not be personally liable for monetary damages for breach of
their fiduciary duty as directors, except in certain specified circumstances.
Those circumstances involve either: (i) a violation of the criminal law; (ii) a
transaction from which the director derived an improper personal benefit; (iii)
an unlawful payment of a dividend or unlawful stock repurchase or redemption;
(iv) in a derivative proceeding or one by or in the right of a shareholder,
conscious disregard for the best interests of the corporation or willful
misconduct; or (v) in a proceeding by or in the right of someone other than the
corporation or a shareholder, recklessness or an act or omission that was
committed in bad faith, with malicious purpose or in a manner exhibiting wanton
and willful disregard of human rights, safety or property. Director liability
and indemnification under Delaware law and the New Jacor Certificate is
discussed above in "Director Liability and Indemnification."
CALLING A SPECIAL MEETING OF SHAREHOLDERS. The FBCA provides that a special
meeting of shareholders can be called by (i) a corporation's Board of Directors;
(ii) the persons authorized by the articles of incorporation or bylaws; or (iii)
the holders of not less than 10% of all votes entitled to be cast on any issue
to be considered at the proposed special meeting. A corporation's articles of
incorporation can require a higher
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percentage of votes, up to a maximum of 50% to call a special meeting of
shareholders. The Citicasters Articles do not include any such provision. The
right to call a special meeting of shareholders under Delaware law and the New
Jacor Certificate is discussed above under "Right to Call Special Meeting of
Shareholders."
AMENDMENTS TO BYLAWS. Under the FBCA, a corporation's board of directors may
amend or repeal the bylaws unless such power is expressly reserved to the
shareholders in the articles of incorporation or the shareholders expressly
provide, in amending or repealing all or any part of the bylaws, that the board
of directors may not amend or repeal the affected bylaws. The right to amend the
New Jacor Bylaws under Delaware law and the New Jacor Certificate is discussed
above under "Amendments to Regulations and Bylaws."
MERGER WITH SUBSIDIARY. The FBCA permits a parent corporation to merge into
itself a subsidiary, without shareholder approval, if 80% of each class of stock
of the subsidiary is owned by the parent corporation. Under Delaware law, a
parent corporation may merge into itself, without shareholder approval, a
subsidiary of which it owns at least 90% of the outstanding shares of each class
of stock.
REMOVAL OF DIRECTORS; FILLING VACANCIES ON THE BOARD OF DIRECTORS. Under the
FBCA, shareholders may remove one or more directors with or without cause,
unless the articles of incorporation provide that directors may be removed only
with cause, at a meeting of the shareholders called expressly for that purpose.
Citicasters Articles do not refer to removal of Directors. Under the Citicasters
Bylaws, newly created directorships resulting from any increase in the number of
directors or any vacancies on the Board of Directors may be filled by the
affirmative vote of a majority of the directors then in office. Under Delaware
law, any director or the entire board of directors generally may be removed,
with or without cause, by the holders of a majority of the shares entitled to
vote at an election of directors.
PROPOSAL TO APPROVE THE REINCORPORATION OF JACOR
The Jacor Board has concluded that it will be in the best interests of Jacor
and its shareholders, in conducting Jacor's ordinary course of business, for
Jacor to reincorporate under the laws of the State of Delaware. In view of the
many favorable provisions of the Delaware General Corporation Law, the Jacor
Board believes that significant advantages arise from being incorporated in the
State of Delaware rather than the State of Ohio.
For many years Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has adopted comprehensive,
modern and flexible corporation laws which are periodically updated and revised
to meet changing business needs. As a result, many major corporations have
chosen Delaware for their initial domicile or have subsequently reincorporated
in Delaware in a manner similar to that proposed by Jacor. Delaware courts have
developed considerable expertise in dealing with corporate legal issues, and a
substantial body of case law has developed construing Delaware law and
establishing public policy with respect to Delaware corporations. The increased
clarity and predictability of Delaware corporate law presented in the numerous
precedents decided by the Delaware courts should be of advantage to Jacor by
allowing Jacor to make corporate decisions and to take corporate actions with
increased confidence of what the outcome and consequences of those decisions and
actions will be under the corporate law governing Delaware corporations. For the
foregoing reasons, the Jacor Board believes that the activities of Jacor can be
carried on better if Jacor is able to operate as a corporation organized and
governed by Delaware law. It should be noted, however, that shareholders in some
instances have fewer rights and less protection under Delaware law than under
Ohio law. See "COMPARISON OF CORPORATE CHARTERS AND RIGHTS OF SECURITY HOLDERS."
For the sole purpose of accomplishing the Reincorporation, Jacor has
established New Jacor. The Reincorporation will be achieved by Jacor merging
with and into New Jacor, with New Jacor being the resulting corporation and
being renamed "Jacor Communications, Inc." The Reincorporation will be
consummated in accordance with Plan and Agreement of Merger between Jacor and
New Jacor (the "Reincorporation Agreement") in the form attached hereto as Annex
VII and made a part of this Proxy
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Statement/Information Statement/Prospectus. Proxies received by Jacor and not
revoked prior to or at the Jacor Annual Meeting will be voted FOR the
Reincorporation. Abstentions and shares not voted by brokers and other
beneficial owners will have the same effect as votes cast against this proposal.
The Reincorporation Agreement provides that the existing directors of Jacor
shall be the directors of New Jacor until its next annual shareholders meeting
or until the directors' successors have been duly elected and qualified. See
"ELECTION OF JACOR DIRECTORS." The Certificate of Incorporation and the Bylaws
of the resulting corporation would be the Certificate of Incorporation and the
Bylaws of New Jacor as attached to the Reincorporation Agreement as Exhibits A
and B, respectively. There are a number of specific instances in which the
rights of Jacor shareholders will differ under New Jacor's Certificate and
Bylaws and under Delaware law as opposed to Ohio law. The material differences
are described under "DESCRIPTION OF CAPITAL STOCK" and "COMPARISON OF CORPORATE
CHARTERS AND RIGHTS OF SECURITY HOLDERS."
The Reincorporation will be accomplished by way of a statutory merger under
the laws of Delaware and Ohio. UNDER THE LAWS OF THOSE STATES, SUCH A MERGER OF
A PARENT CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARY DOES NOT GIVE RISE TO
SHAREHOLDER APPRAISAL RIGHTS.
As promptly as practicable after the approval of the Reincorporation
Agreement, if obtained, by the holders of at least two-thirds of the outstanding
shares of Jacor Common Stock and by the sole shareholder of New Jacor (all of
whose shares are owned by Jacor and will be voted in favor of the
Reincorporation), Jacor and New Jacor shall execute and file all necessary
merger documents with the appropriate state authorities as contemplated by the
Reincorporation Agreement and as required by law. Zell/Chilmark has informed
Jacor that it intends to vote all shares of Jacor Common Stock owned by it in
favor of the Reincorporation. The Reincorporation of Jacor is also conditional
upon the receipt of prior FCC approval. See "THE MERGER--Reincorporation of
Jacor." Subject to receipt of such FCC approval and approval by the Jacor
shareholders, the Reincorporation will be effective at the close of business on
the date on which the Articles of Merger are filed with the Delaware Secretary
of State and the Certificate of Merger is filed with the Ohio Secretary of State
(the "Reincorporation Effective Time"). The Articles of Merger and Certificate
of Merger are attached as Annex VIII and made a part of this Proxy
Statement/Information Statement/ Prospectus. At the Reincorporation Effective
Time, Jacor will be merged with and into New Jacor, with New Jacor being the
resulting corporation and to be renamed "Jacor Communications, Inc."
If the Reincorporation is consummated, all shares of Jacor Common Stock
outstanding immediately prior to the Reincorporation Effective Time (other than
shares held by Jacor in its treasury, all of which shares shall be cancelled at
the Reincorporation Effective Time) will be converted into shares of New Jacor's
common stock on a one-for-one basis.
New Jacor will assume existing options and warrants which have been granted
and issued by Jacor to its directors, officers, employees or other persons.
After the consummation of the Reincorporation, each optionee and warrant holder
will be entitled to acquire one share of New Jacor's common stock upon the
exercise of the option or warrant for each share of Jacor Common Stock that he
or she otherwise would have been entitled to purchase upon exercise of the
option or warrant. Approximately 3,600,000 shares of New Jacor's common stock
could be issued in substitution for the shares of Jacor Common Stock now subject
to outstanding options and warrants.
After the Reincorporation Effective Time, Jacor stock certificates will
evidence ownership of New Jacor's common stock for all corporate purposes
including dividends, distributions and voting rights. It is not necessary that
Jacor's shareholders exchange their existing Jacor Common Stock certificates for
new common stock certificates of New Jacor.
The Reincorporation Agreement gives the right to the shareholders and the
directors of either or both of Jacor or New Jacor to abandon the Reincorporation
Agreement at any time prior to the Reincorporation Effective Time. Such
abandonment might be taken should the Board of Directors of either corporation
deem consummation thereof to be undesirable for any purposes.
86
<PAGE>
Subsequent to the Reincorporation, New Jacor will continue Jacor's present
business operations after the Reincorporation Effective Time in the same manner
as presently conducted by Jacor. The composition of New Jacor's Board of
Directors and other matters affecting New Jacor will remain in the control of
Jacor's existing shareholders.
THE JACOR BOARD HAS APPROVED THE REINCORPORATION AND RECOMMENDS THAT JACOR'S
SHAREHOLDERS VOTE FOR THE REINCORPORATION.
PROPOSAL TO APPROVE ISSUANCE OF JACOR WARRANTS
AND SHARES OF JACOR COMMON STOCK ISSUABLE UPON EXERCISE THEREOF
Jacor management and the Jacor Board concluded that it was in the best
interests of Jacor and its shareholders for Jacor to enter into the Merger
Agreement. Pursuant to the Merger Agreement, Acquisition Corp. will be merged
with and into Citicasters. The holders of Citicasters Common Stock will have the
right to receive the Merger Consideration in exchange for each share of
Citicasters Common Stock, including the Jacor Warrants. If approved, Jacor will
issue warrants to acquire an aggregate of approximately 4,400,000 shares of
Jacor Common Stock. See "THE MERGER--Conversion of Citicasters Common Stock for
the Merger Consideration" and "--Description of Jacor Warrants."
Ohio law does not require Jacor shareholders to approve the issuance of the
Jacor Warrants and the shares of Jacor Common Stock issuable upon exercise
thereof. However, the Nasdaq National Market rules to which Jacor is subject
require shareholder approval in connection with the acquisition of the stock of
another company where the potential issuance of common stock, or securities
exercisable for common stock, has or will have upon issuance voting power equal
to or in excess of 20% of the voting power outstanding before the issuance of
such stock or securities. At the time the Merger Agreement was executed, the
approval by the holders of a majority of the votes cast in person or by proxy on
this proposal would have been required by such rules because the shares of Jacor
Common Stock issuable upon exercise of all the Jacor Warrants would have
exceeded 20% of the shares of Jacor Common Stock then outstanding.
As a result of the sale of shares of Jacor Common Stock in the 1996 Stock
Offering, the issuance of the Jacor Warrants will not equal or exceed the 20%
threshold and Jacor believes that the Nasdaq National Market rules no longer
apply so as to require approval of the issuance of the Jacor Warrants.
Nonetheless, Jacor is seeking shareholder approval of the issuance of the Jacor
Warrants at the Jacor Annual Meeting to ensure compliance with those rules in
the event such rules would be deemed applicable.
As required by the Jacor Shareholders Agreement, Zell/Chilmark granted
Citicasters an irrevocable proxy pursuant to which all of the shares of Jacor
Common Stock owned by Zell/Chilmark will be voted in favor of the issuance of
the Jacor Warrants as are necessary for the payment of the Merger Consideration,
and the shares of Jacor Common Stock issuable upon the exercise thereof. If the
Reincorporation is approved at the Annual Meeting, it is expected that the
Reincorporation will be effected prior to the consummation of the Merger and the
Jacor Warrants will thereby constitute common stock purchase warrants to acquire
shares of New Jacor Common Stock.
Proxies received by Jacor and not revoked prior to or at the Jacor Annual
Meeting will be voted FOR the issuance of the Jacor Warrants and shares of Jacor
Common Stock issuable upon the exercise thereof. Abstentions and shares not
voted by brokers and other beneficial owners will have no effect on this
proposal.
THE JACOR BOARD HAS APPROVED THE ISSUANCE OF THE JACOR WARRANTS AND THE
UNDERLYING SHARES OF JACOR COMMON STOCK AND RECOMMENDS THAT JACOR'S SHAREHOLDERS
VOTE FOR SUCH ISSUANCES.
87
<PAGE>
ELECTION OF JACOR DIRECTORS
INFORMATION CONCERNING NOMINEES
Jacor's Amended and Restated Code of Regulations currently provides that the
Jacor Board shall consist of a minimum of five and a maximum of fifteen members.
In accordance with the Amended and Restated Code of Regulations, the Jacor Board
has established the current number of Jacor directors at eight, but such number
will be reduced to seven members effective as of the date of the Jacor Annual
Meeting. This reduction is the result of David M. Schulte's resignation from the
Jacor Board in February 1996. At the Jacor Annual Meeting, seven directors will
be elected. Upon the consummation of the Reincorporation, all directors elected
at the Jacor Annual Meeting will become the directors of New Jacor and will hold
office until the next annual meeting of Jacor shareholders and until their
respective successors are duly elected and qualified. The Jacor Board has
nominated the seven incumbent directors for election by the Jacor shareholders
at the Jacor Annual Meeting.
It is the intention of the persons named as proxy holders in the proxy to
vote FOR the election of all nominees named. If any nominee shall be unable to
serve, which is not now contemplated, the proxies will be voted for such
substitute nominee as the Jacor Board recommends.
Ohio law, under which Jacor is currently incorporated, does not require a
minimum number of votes for the election of a director, and those nominees
receiving the greatest number of votes will be elected as directors. Thus,
abstentions and shares not voted by brokers and other entities holding shares on
behalf of the beneficial owners will have no effect in the election of
directors.
Under Ohio law, any shareholder entitled to vote at the Jacor Annual Meeting
may give written notice to the President, a Vice President, or the Secretary of
Jacor not less than forty-eight (48) hours before the Jacor Annual Meeting that
cumulative voting for the election of directors is desired. If the Chairman or
the Secretary announces the receipt of such notice upon the convening of the
Jacor Annual Meeting, each shareholder shall have the right to cumulate his or
her voting power in voting for Jacor's directors.
Under cumulative voting, each shareholder entitled to vote at the Jacor
Annual Meeting would have an aggregate number of votes equal to the number of
directors to be elected multiplied by the number of shares of Jacor Common Stock
held by such shareholder on the Jacor Record Date. The resulting aggregate
number of votes may be cast by such shareholder for the election of any single
nominee standing for election, or such shareholder may distribute such votes
among any number or all of the nominees. The nominees receiving the highest
number of votes will be elected to the Jacor Board for the term specified. The
proxies being solicited pursuant to this Proxy Statement/Information
Statement/Prospectus may be voted cumulatively for less than the entire number
of nominees if any situation arises which, in accordance with the proxy holders'
best judgment, makes such action necessary or desirable.
88
<PAGE>
The following table sets forth, with respect to each nominee for director of
Jacor, his or her age, principal occupation during the past five years, other
positions he or she holds with Jacor, if any, and the year in which he or she
first became a director of Jacor. Each of the nominees is currently a director
of Jacor.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AND PRINCIPAL OCCUPATION BECAME
DURING PAST FIVE YEARS AGE DIRECTOR
- ------------------------------------------------------------------------------- --- -----------
<S> <C> <C>
JOHN W. ALEXANDER--A Partner of Meringoff Equities, and a Managing Partner of 49 1993
Mallard Creek Capital Partners, since 1987. Both are private real estate and
investment partnerships. Mr. Alexander is also a Trustee of Equity Residential
Properties Trust, a real estate investment trust.
ROD F. DAMMEYER--President and Chief Executive Officer of Anixter International 55 1993
Inc. (formerly known as Itel Corporation), a Chicago-based value-added provider
of integrated networking and cabling solutions. Mr. Dammeyer has been President
of Anixter International since 1985 and Chief Executive Officer since 1993; and
he has been President and Chief Executive Officer since February 1994 and
Director since 1992 of Great American Management and Investment, Inc. ("GAMI"),
a diversified manufacturing company. He is a member of the boards of directors
of ANTEC Corporation; Capsure Holdings Corp. (an affiliate of GAMI); Falcon
Building Products, Inc.; IMC Global, Inc.; Revco D.S., Inc.; and Sealy
Corporation. Mr. Dammeyer is a trustee of several VanKampen American Capital,
Inc. trusts.
F. PHILIP HANDY--President of Winter Park Capital Company, a private investment 52 1993
firm, since 1980. Mr. Handy is a director of Anixter International Inc.; GAMI;
Q-Tel, S.A. de C.V.; and Banca Quadrum, S.A. (formerly Servicios Financieros
Quadrum, S.A.).
MARC LASRY--Executive Vice President of Amroc Investments, Inc., a private 36 1993
investment firm, since 1990. Mr. Lasry was the Director and Senior Vice
President of the corporate reorganization department of Cowen & Co., a
privately-owned brokerage firm, from 1987 to 1989. From January 1989 to
September 1990, he was a portfolio manager for Amroc Investments, L.P., a
private investment fund.
ROBERT L. LAWRENCE--Co-Chief Operating Officer of Jacor. Mr. Lawrence has 43 1993
served as an officer of Jacor since 1986.
RANDY MICHAELS--President and Co-Chief Operating Officer of Jacor. Mr. 44 1993
Michaels, whose legal name is Benjamin L. Homel, has served as an officer of
Jacor since 1986.
</TABLE>
89
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
NAME AND PRINCIPAL OCCUPATION BECAME
DURING PAST FIVE YEARS AGE DIRECTOR
- ------------------------------------------------------------------------------- --- -----------
<S> <C> <C>
SHELI Z. ROSENBERG--Board Chair of Jacor since February 1996. She is also the 54 1994
President and a member of the law firm of Rosenberg & Liebentritt, P.C. since
1980. Mrs. Rosenberg is also Chief Executive Officer, President and a director
of Equity Financial and Management Company and its parent successor Equity
Group Investments, Inc., a privately owned and affiliated investment and
management company. Mrs. Rosenberg is also a director of GAMI and of Capsure
Holdings Corp., an affiliate of GAMI, and a trustee of Equity Residential
Properties Trust, a real estate investment trust. Mrs. Rosenberg is also a
director of American Classic Voyages Co.; CFI Industries, Inc.; Eagle
Industries, Inc.; Anixter International Inc.; Sealy Corporation; and Revco
D.S., Inc. Mrs. Rosenberg was a Vice President of Madison Management Group,
Inc., which filed a petition under the federal bankruptcy laws on November 8,
1991. Mrs. Rosenberg was also a Vice President of First Capital Benefits
Administrators, Inc., a wholly-owned indirect subsidiary of GAMI, which filed a
federal bankruptcy petition on January 3, 1995.
</TABLE>
There are no family relationships among any of the above-named nominees for
director nor among any of the nominees and any executive officers of Jacor.
JACOR BOARD OF DIRECTORS, ITS COMMITTEES, MEETINGS AND FUNCTIONS
During the year ended December 31, 1995, the Jacor Board held four regularly
scheduled meetings. Each director attended or participated in at least 75% of
the meetings of the Jacor Board and all Committees on which he or she served in
1995.
Standing committees of the Jacor Board include a Compensation Committee and
an Audit Committee. The Jacor Board does not have a Nominating Committee.
In 1995, the Compensation Committee consisted of three Directors, Messrs.
Schulte and Dammeyer and Mrs. Rosenberg. The Compensation Committee determines
stock option grants to executive officers and other key employees, as well as
reviews salaries, bonuses and other elements of compensation of executive
officers and makes recommendations to the Jacor Board. The Compensation
Committee held one meeting during 1995. In 1996, the Compensation Committee will
consist of three Directors, Messrs. Dammeyer and Handy and Mrs. Rosenberg.
In 1995, the Audit Committee consisted of three Directors, Messrs. Schulte
and Dammeyer and Mrs. Rosenberg. The Audit Committee reviews the financial
statements of Jacor, consults with Jacor's independent auditors and considers
such other matters with respect to the internal and external audit of the
financial affairs of Jacor as may be necessary or appropriate in order to
facilitate accurate financial reporting. The Audit Committee held two meetings
during 1995. In 1996, the Audit Committee will consist of three Directors,
Messrs. Alexander and Dammeyer and Mrs. Rosenberg.
90
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT OF JACOR
The following table sets forth, as of May 31, 1996, the number of shares and
percentage of Jacor Common Stock beneficially owned by each person who is known
to Jacor to be the beneficial owner of more than 5% of Jacor Common Stock, by
each of Jacor's directors and nominees for election as directors, by Jacor's
executive officers and by all of Jacor's executive officers and directors as a
group.
BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- -------------------------------------------------------------------------------- --------------------- -----------
<S> <C> <C>
5% OR MORE BENEFICIAL OWNERS
Zell/Chilmark Fund L.P. ........................................................ 13,349,720(3) 70.01%
David M. Schulte................................................................ 13,349,720(4) 70.01%
Samuel Zell..................................................................... 13,349,720(4) 70.01%
MANAGEMENT
John W. Alexander............................................................... 33,000 (5) *
Rod F. Dammeyer................................................................. 13,362,720 (6) 70.03 %
F. Philip Handy................................................................. 56,000 (7) *
Marc Lasry...................................................................... 23,000 (5) *
Robert L. Lawrence.............................................................. 498,093 (8) 2.63 %
Randy Michaels.................................................................. 673,805 10) 3.55 %
Sheli Z. Rosenberg.............................................................. 13,352,720 11) 70.01 %
R. Christopher Weber............................................................ 466,954 12) 2.49 %
Jon M. Berry.................................................................... 250,095 13) 1.35 %
All executive officers and directors as a group (9 persons)..................... 14,900,707 14) 72.98 %
</TABLE>
- ---------
* Less than 1%
(1) The Commission has defined beneficial ownership to include sole or shared
voting or investment power with respect to a security or the right to
acquire beneficial ownership of a security within 60 days. The number of
shares indicated are owned with sole voting and investment power unless
otherwise noted and includes certain shares held in the name of family
members, trusts and affiliated companies as to which beneficial ownership
may be disclaimed. The number of shares indicated includes shares of Jacor
Common Stock issuable pursuant to options granted under Jacor's 1993 Stock
Option Plan and which have vested.
(2) Under rules promulgated by the Commission, any securities not outstanding
that are subject to options or warrants exercisable within 60 days are
deemed to be outstanding for the purpose of computing the percentage of the
class owned by such person but are not deemed to be outstanding for the
purpose of computing the percentage of the class owned by any other person.
(3) The address of Zell/Chilmark is Two North Riverside Plaza, Suite 600,
Chicago, Illinois 60606. Zell/Chilmark is a Delaware limited partnership
controlled by Samuel Zell and David M. Schulte, former directors of Jacor,
as follows: the sole general partner of which Zell/Chilmark is ZC Limited
Partnership ("ZC Limited"); the sole general partner of ZC Limited is ZC
Partnership; the sole general partners of ZC Partnership are ZC, Inc. and CZ
Inc.; Mr. Zell is the sole shareholder of ZC, Inc.; and Mr. Schulte is the
sole shareholder of CZ Inc. Of the shares beneficially owned by
Zell/Chilmark, 629,117 are shares issuable pursuant to 1993 Warrants owned
by Zell/Chilmark which were exercised prior to June 12, 1996.
(4) All shares beneficially owned by Zell/Chilmark (See Note (3) above) are
included in the shares beneficially owned by Messrs. Zell, Schulte and
Dammeyer and Mrs. Rosenberg, who constitute all of the members of the
management committee of Z/C Limited. The address of Mr. Schulte is Two North
Riverside Plaza, Suite 1500, Chicago, Illinois 60606. The address of Mr.
Zell is Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Mr.
Schulte indirectly shares beneficial ownership of a 20% limited partnership
interest in ZC Limited, and Mr. Zell indirectly shares beneficial ownership
of an 80% limited partnership interest in ZC Limited.
(5) Includes vested options to purchase 13,000 shares.
(6) Includes vested options to purchase 13,000 shares. Mr. Dammeyer indirectly
shares beneficial ownership of an 80% limited partnership interest in ZC
Limited. See Note (3) above.
(7) Includes vested options to purchase 13,000 shares. Mr. Handy indirectly
shares beneficial ownership of an 80% limited partnership interest in ZC
Limited. See Note (3) above. Also includes 13,000 shares held by H. H.
Associates Trust of which Mr. Handy is co-trustee.
91
<PAGE>
(8) Includes vested options to purchase 491,060 shares and 3,556 shares
issuable pursuant to warrants. Of the shares indicated, 637 shares
(including 481 shares issuable pursuant to warrants) are owned by members of
Mr. Lawrence's family.
(9) Includes 118,997 shares issuable pursuant to warrants and vested options to
purchase 431,000 shares. The number of shares indicated includes shares and
warrant shares held as co-trustee under the Jacor Communications, Inc.
Retirement Plan (the "Retirement Plan"). See Note (10) below. Also includes
15 shares and 58 warrants owned by Mr. Michaels' wife, as to which Mr.
Michaels disclaims beneficial ownership. Does not include 300,000 shares
subject to a contingent right of acquisition held by a corporation owned by
Mr. Michaels.
(10) Includes 233,005 shares (including 112,801 shares issuable pursuant to
warrants) held under the Retirement Plan with respect to which Messrs.
Michaels, Weber and Berry as co-trustees, share voting and investment power.
Of these 233,005 shares, 9,093 shares (including 5,033 shares issuable
pursuant to warrants) are beneficially owned by the named executives.
(11) Includes vested options to purchase 3,000 shares.
(12) Includes 112,865 shares issuable pursuant to warrants and vested options to
purchase 232,250 shares. The number of shares indicated includes shares and
warrant shares held as co-trustee under the Retirement Plan. See Note (10)
above.
(13) Includes 113,004 shares issuable pursuant to warrants and vested options to
purchase 16,835 shares. The number of shares indicated includes shares and
warrant shares held as co-trustee under the Retirement Plan. See Note (10)
above.
(14) Includes 639,136 shares issuable pursuant to warrants, vested options to
purchase 1,226,145 shares and 233,005 shares (including 112,801 shares
issuable pursuant to warrants not included in the 639,136 above) held under
the Retirement Plan.
No agreements, formal or informal, exist among the various officers and
directors to vote their shares collectively.
REPORTS OF CHANGES IN BENEFICIAL OWNERSHIP
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder require Jacor's directors, executive officers and 10% or more
beneficial owners to file certain reports with the Commission regarding changes
in beneficial ownership by such persons in Jacor's securities. To the best
knowledge of Jacor, all of Jacor's directors and executive officers timely filed
all such reports due in 1995, except for one late filing of a Form 4 by each of
Mrs. Rosenberg and Mr. Dammeyer in connection with their appointment to the
management committee of Z/C Limited in the fourth quarter of 1995 which resulted
in their being deemed beneficial owners of the shares of Jacor Common Stock
owned by Zell/Chilmark.
92
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF CITICASTERS
The following table sets forth, as of May 31, 1996, the number of shares and
percentage of Citicasters Common Stock beneficially owned by each person who is
known to Citicasters to be the beneficial owner of more than 5% of Citicasters
Common Stock, by each of Citicasters' directors and by all of Citicasters'
executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ------------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
5% OR MORE BENEFICIAL OWNERS
American Financial Group, Inc. and its subsidiaries
(collectively "American Financial")
One East Fourth Street, Cincinnati, Ohio 45202..................................... 7,566,889(3) 37.8%
Carl H. Lindner
One East Fourth Street, Cincinnati, Ohio 45202..................................... 3,204,213(4) 16.0%
Sandler Associates/Sandler Capital Management
767 Fifth Avenue, 45th Floor, New York, NY 10153................................... 1,022,580 5.3%
MANAGEMENT
Carl H. Lindner...................................................................... 3,204,213 (4) 16.0 %
John P. Zanotti...................................................................... 253,132 (5) 1.2 %
Theodore H. Emmerich................................................................. 7,425 (5) *
S. Craig Lindner..................................................................... 90,000 (6) *
James E. Evans....................................................................... 94,500 (5) *
Julius S. Anreder.................................................................... 4,500 (5) *
All Directors and executive officers................................................. 3,759,445 (7) 18.8 %
</TABLE>
- ---------
* Less than one percent
(1) The Commission has defined beneficial ownership to include sole or shared
voting or investment power with respect to a security or the right to
acquire beneficial ownership of a security within 60 days. The number of
shares indicated are owned with sole voting and investment power unless
otherwise noted and includes certain shares held in the name of family
members, trusts and affiliated companies as to which beneficial ownership
may be disclaimed.
(2) Under rules promulgated by the Commission, any securities not outstanding
that are subject to options or warrants exercisable within 60 days are
deemed to be outstanding for the purpose of computing the percentage of the
class owned by such person but are not deemed to be outstanding for the
purpose of computing the percentage of the class owned by any other person.
(3) Carl H. Lindner, Carl H. Lindner III, S. Craig Lindner and Keith E.
Lindner, (collectively "the Lindner Family"), are the beneficial owners of
44% of American Financial common stock and may be deemed to be controlling
persons of American Financial. The Lindner Family shares with American
Financial voting and dispositive power with respect to the Citicasters
Common Stock owned by American Financial. American Financial and the
Lindner Family may be deemed to be controlling persons of Citicasters.
(4) Excludes 7,566,889 shares of Citicasters Common Stock held by American
Financial and includes 170,253 shares of Citicasters Common Stock held by a
charitable foundation over which Mr. Lindner shares voting and/or
dispositive power and 4,500 shares of which Mr. Lindner has the right to
acquire within 60 days through the exercise of stock options.
(5) Includes shares of Citicasters Common Stock which the named Director or all
Directors and executive officers as a group has the right to acquire within
60 days, through the exercise of stock options, in the following amounts:
Mr. Zanotti, 202,500 shares; Mr. Emmerich, 4,500; Mr. S. Craig Lindner,
4,500; Mr. Evans, 4,500; Mr. Anreder, 4,500; other executive officers as a
group, 49,500 shares.
(6) Excludes 7,566,889 shares of Citicasters Common Stock held by American
Financial and includes (i) 49,500 shares of Citicasters Common Stock held
by his spouse as custodian for their minor children or in a trust over
which his spouse has voting and dispositive power and (ii) 18,000 held in
trust for the benefit of his children for which his brother acts as trustee
with voting and dispositive power.
93
<PAGE>
Several of the Citicasters' directors and executive officers also
beneficially owned shares of American Financial common stock as of February 29,
1996, in the following amounts: Carl H. Lindner--6,793,226; S. Craig
Lindner--4,803,585; Theodore H. Emmerich--3,400; James E. Evans--41,071; and
Julius S. Anreder--4,542.
JACOR EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
paid or awarded to or earned by Jacor's Co-Chief Operating Officers and each of
Jacor's other two executive officers (the "named executives") during each of the
last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION(1) -----------
-------------------- STOCK ALL OTHER
NAME AND PRINCIPAL SALARY BONUS OPTIONS COMPENSATION
POSITION YEAR (2)($) ($) (#) SHARES (3)($)
- ---------------------- --------- --------- --------- ----------- -------------
Randy Michaels 1995 294,278 117,800 41,000 2,250
<S> <C> <C> <C> <C> <C>
President and 1994 269,993 142,000 -- 2,250
Co-Chief Operating 1993 247,116 231,000 378,400 3,418
Officer
Robert L. Lawrence 1995 293,817 117,800 41,000 2,250
Co-Chief Operating 1994 264,430 140,000 -- 2,250
Officer 1993 247,116 231,000 442,710 3,707
R. Christopher Weber 1995 190,979 76,575 25,000 2,250
Senior Vice 1994 171,892 98,000 -- 2,250
President,
Chief Financial 1993 148,654 138,600 200,000 2,230
Officer and
Secretary
Jon M. Berry 1995 127,933 33,000 8,500 2,250
Senior Vice 1994 119,584 28,784 -- 2,250
President
and Treasurer 1993 111,648 65,000 14,800 1,564
</TABLE>
- ------------
(1) Does not include perquisites and other personal benefits because the
aggregate amount of such compensation in each year for each named executive
did not exceed the lesser of $50,000 or 10% of his total salary and bonus
reported for that year.
(2) Includes amounts deferred at the election of the recipient under the
Retirement Plan.
(3) The amounts shown in this column represent matching Jacor contributions
under the Retirement Plan.
94
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all stock option grants to the named
executives during the year ended December 31, 1995.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS(1) VALUE AT ASSUMED
-------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(3)
OPTIONS EMPLOYEES EXERCISE --------------------
GRANTED IN FISCAL PRICE EXPIRATION 5% 10%
NAME (#) YEAR(2) ($/SHARE) DATE ($)(6) ($)(6)
- -------------------------------------------- ----------- ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Randy Michaels.............................. 12,300 13.88 5/30/05 107,379 272,076
12,300(3) 14.43 5/30/05 100,614 265,311
8,200(4) 15.00 5/30/05 62,402 172,200
8,200(5) 15.60 5/30/05 57,482 167,280
----------- --------- ---------
41,000 16.73% 327,877 876,867
Robert L. Lawrence.......................... 12,300 13.88 5/30/05 107,379 272,076
12,300(3) 14.43 5/30/05 100,614 265,311
8,200(4) 15.00 5/30/05 62,402 172,200
8,200(5) 15.60 5/30/05 57,482 167,280
----------- --------- ---------
41,000 16.73% 327,877 876,867
R. Christopher Weber........................ 7,500 13.88 5/30/05 65,475 165,900
7,500(3) 14.43 5/30/05 61,350 161,775
5,000(4) 15.00 5/30/05 38,050 105,000
5,000(5) 15.60 5/30/05 35,050 102,000
----------- --------- ---------
25,000 10.20% 199,925 534,675
Jon M. Berry................................ 2,550 13.88 5/30/05 22,262 56,406
2,550(3) 14.43 5/30/05 20,857 55,004
1,700(4) 15.00 5/30/05 12,937 35,700
1,700(5) 15.60 5/30/05 11,917 34,680
----------- --------- ---------
8,500 3.47% 67,975 181,790
</TABLE>
- ------------
(1) All grants are under Jacor's 1993 Stock Option Plan and were made in 1995
at 100% of the fair market value of a share of Jacor Common Stock on the
grant date.
(2) Total options granted to employees in 1995 were for 245,000 shares of Jacor
Common Stock.
(3) Options vest May 31, 1996.
(4) Options vest May 31, 1997.
(5) Options vest May 31, 1998.
(6) Calculated based upon assumed stock prices for Jacor Common Stock of $22.61
and $36.00, respectively, if 5% and 10% annual rates of stock price
appreciation are achieved over the full term of the option. The potential
realizable gain equals the product of the number of shares underlying the
stock option grant and the difference between the assumed stock price and
the exercise price of each option.
95
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning the fiscal year-end
values of all unexercised stock options to the named executives as of December
31, 1995. Except for Mr. Berry, the named executives exercised no stock options
in 1995.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END
EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($)(1) (#) ($)(2)
- --------------------------------------- ------------- ----------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Randy Michaels......................... -0- -- 315,020/104,380 3,542,834/909,348
Robert L. Lawrence..................... -0- -- 360,955/122,755 4,068,055/1,112,208
R. Christopher Weber................... -0- -- 163,215/61,785 1,822,266/533,932
Jon M. Berry........................... 6,440 52,724 7,950/8,910 70,782/47,986
</TABLE>
- ------------
(1) Value is calculated by determining the difference between the per share
exercise price and the per share fair market value of the stock as of the
exercise date, multiplied by the number of shares acquired upon the
exercise of the options.
(2) The value of unexercised options is calculated by determining the
difference between $17.50 per share, the last reported sale price of Jacor
Common Stock on the Nasdaq National Market on December 31, 1995, and the
exercise price of the option as of such date, multiplied by the number of
shares subject to options.
SUMMARY OF BENEFITS UNDER THE 1995 EMPLOYEE STOCK PURCHASE PLAN
It is not possible to determine the number of shares of Jacor Common Stock
that will in the future be purchased under the Jacor 1995 Employee Stock
Purchase Plan (the "Stock Purchase Plan") by any particular individual. The
following table sets forth the number of shares purchased during the 1995 annual
offering by, and the number of options conditionally granted under the Stock
Purchase Plan for the 1996 annual offering to the named executives, all
executive officers of Jacor as a group and all employees other than the
executive officers as a group. Non-employee directors are not eligible to
participate in the Stock Purchase Plan.
<TABLE>
<CAPTION>
1995 OFFERING 1996 OFFERING
------------------------ ----------------------
NUMBER OF PER SHARE NUMBER OF DOLLAR
SHARES PURCHASE OPTIONS VALUE
NAME AND PRINCIPAL POSITION PURCHASED PRICE ($) GRANTED ($)(1)
- ------------------------------------------------------------------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Randy Michaels..................................................... 923 10.84 702 1,762
President and Co-Chief
Operating Officer
Robert L. Lawrence................................................. 1,884 10.84 1,488 3,735
Co-Chief Operating
Officer
R. Christopher Weber............................................... 1,619 10.84 1,367 3,431
Senior Vice President,
Chief Financial Officer
and Secretary
Jon M. Berry....................................................... -0- -0- -0- -0-
Senior Vice President
and Treasurer
Executive Officer Group (4 persons)................................ 4,426 10.84 3,557 8,928
Non-Executive Officer Employee Group............................... 39,359 10.84 47,922 682,409
</TABLE>
- ------------
(1) Computed as the difference between $16.75, the last reported sale price on
the option grant date (January 2, 1996), and $14.24, the discounted stock
option price, times the number of options. If the market value of Jacor
Common Stock is greater than $16.75 on the exercise date (December 31,
1996), the value to the Stock Purchase Plan participants will increase
accordingly.
96
<PAGE>
As of March 15, 1996, 241 employees were participating in the 1996 annual
offering under the Stock Purchase Plan, options to purchase 51,479 shares of
Jacor Common Stock were outstanding under the Stock Purchase Plan, 186 employees
had participated in the 1995 annual offering under the Stock Purchase Plan,
43,785 shares had been issued pursuant to options exercised under the Stock
Purchase Plan and 104,736 shares were available for future grants and purchases.
COMPENSATION COMMITTEE REPORT
The report of the 1995 Compensation Committee with respect to 1995 executive
compensation is as follows:
The primary function of the Compensation Committee, which consists entirely
of non-employee directors, is to oversee policies relating to executive
compensation including salary, incentive bonuses, fringe benefits and stock
option awards. Its objective is to attract and retain qualified individuals by
providing competitive compensation, while, at the same time, linking such
compensation to corporate objectives. The Compensation Committee believes that
providing a direct relationship between corporate results and executive
compensation will best serve shareholder interests.
This link between executive compensation and corporate performance is
facilitated through incentive bonuses based on earnings and also through stock
option awards. The Compensation Committee may grant stock options to individuals
to create additional economic incentives for these individuals to achieve
improved corporate performance goals so that they can thereby participate in any
resultant increases in shareholder value. The options are exercisable at the
fair market value of the stock on the date of grant and therefore only provide
benefits to the grantee if shareholder value increases through the increase in
share price.
The compensation of each executive officer is reviewed annually by the
Compensation Committee. It is the Compensation Committee's policy to establish
base salaries for its executives at levels that it perceives to be fair and
competitive with those of executives with similar responsibilities at companies
that are considered to be comparable in terms of assets, net worth, revenue,
operating cash flow and/or earnings per share, based upon such information as
may be acquired by the Compensation Committee from annual reports and proxy
materials of such other companies, business and industry publications and other
sources as may be available from time to time. Such comparisons of executive
compensation are not necessarily with the same companies included in the indices
used in the performance graph included in this Proxy Statement/Information
Statement/Prospectus given that Jacor's competitors for executive and/or
broadcasting talent are not limited to the entities included in such index.
The Compensation Committee applied the above considerations in determining
the 1995 compensation for Jacor's Co-Chief Operating Officers, Messrs. Michaels
and Lawrence (the "COOs"). In March 1995, the Compensation Committee established
the base salary levels for the COOs and Jacor's other executive officers.
Consistent with the Compensation Committee's policy of establishing competitive
salary levels, each COO received a salary increase for 1995 averaging $27,000.
The Compensation Committee also established two forms of target-based bonus
systems. For the corporate management executives (including the COOs and the
other executive officers) and staff members employed at Jacor's principal
executive offices, the Compensation Committee established a bonus system
dependent on Jacor's performance relative to a pre-set financial target based on
Economic Value Added ("EVA"). EVA measures the return on investment that
enhances shareholder value. Payments out of this corporate management pool are
tied to Jacor's level of achievement of the annual EVA. The monies in the pool
were to be distributed 50% based upon the employee's salary in relation to all
corporate management employee salaries, and 50% based upon the Compensation
Committee's subjective determinations of the employee's overall individual
performance and contributions to Jacor's achievement of the target levels. The
Compensation Committee established a separate target-based bonus system for
other Jacor employees working for Jacor subsidiaries and radio stations. This
bonus system set incentive performance targets for all such employees that
created the potential for significant incentive bonuses if Jacor achieved
certain cash flow levels in 1995. If Jacor met or exceeded its cash flow
performance targets a bonus pool was to be created. Similar to the corporate
management pool, the monies in the cash flow pool were to be distributed 50%
based upon the employee's salary and 50% based upon the Committee's subjective
determinations of the employee's performance.
97
<PAGE>
Jacor exceeded the 1995 performance targets by a substantial margin. The
Compensation Committee rewarded the COOs accordingly by granting substantial
bonuses for 1995 determined in accordance with the incentive formula. A
significant portion of the COO bonuses was based upon the Compensation
Committee's determination that Messrs. Michaels and Lawrence were directly
responsible for much of Jacor's improved 1995 results. The Compensation
Committee also awarded 115,500 stock options to executive officers in 1995 with
Messrs. Michaels and Lawrence receiving 41,000 each.
Based on Jacor's past compensation practices, the Compensation Committee
does not currently believe that Section 162(m) of the Internal Revenue Code
regarding the deductibility of executive compensation will adversely affect
Jacor's ability to obtain a tax deduction for compensation paid to its executive
officers.
1995 Compensation Committee:
Rod F. Dammeyer
Sheli Z. Rosenberg
David M. Schulte
STOCK PERFORMANCE
The following performance graph compares Jacor's cumulative shareholder
returns, adjusted for stock splits and dividends, in Jacor Common Stock, the
Nasdaq Total Return Index (US) and the Nasdaq Telecommunications Stocks Index.
The graph assumes that an investment of $100 was made on January 11, 1993 in
Jacor Common Stock and in each index. Total shareholder return is based on the
increase in the price of the stock and assumes that all dividends were
reinvested.
In January 1993, Jacor consummated a complete recapitalization and
restructuring of its capital structure, bank debt, subordinated debt and other
claims and interests (the "Restructuring"). As part of the Restructuring, all of
Jacor's formerly outstanding capital stock was exchanged for new securities of
Jacor, including the Jacor Common Stock which is now outstanding and warrants to
acquire Jacor Common Stock. Accordingly, a three year comparison of cumulative
shareholder return relating to Jacor Common Stock, which was first registered
under Section 12 of the Exchange Act in connection with the Restructuring, is
provided below.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
JACOR NASDAQ TELECOMMUNICATIONS NASDAQ TOTAL
<S> <C> <C> <C>
Communications, Inc. Stock Index Return Index (US)
1/11/93 100 100 100
12/31/93 244 154 114
12/31/94 225 128 112
12/31/95 298 161 154
</TABLE>
98
<PAGE>
DIRECTOR COMPENSATION
Directors who are not employees of Jacor receive an annual fee of $10,000
and a fee of $1,000 plus travel expenses for each Jacor Board meeting attended.
For each Jacor Board meeting missed, $1,000 is deducted from the director's
annual fee.
In February 1996, Jacor granted nonqualified stock options to purchase up to
5,000 shares of Jacor Common Stock to each of Messrs. Alexander, Dammeyer, Handy
and Lasry and to Mrs. Rosenberg at a minimum exercise price of $17.25 per share.
These options are exercisable for ten years from the grant date and vest 30%
upon grant, 30% upon the first anniversary of the grant date and 20% per year
for each of the next two years thereafter. The exercise price of the options
that vested upon grant is $17.25 per share, and the options that subsequently
vest on each anniversary date of the grant have an exercise price 4% greater
than the options that vested in the previous year. Once an option vests, the
exercise price for that option is fixed for the remaining term of the option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1995, Messrs. Dammeyer and Schulte and Mrs. Rosenberg were non-employee
directors of Jacor and comprised Jacor's entire Compensation Committee. No
executive officer of Jacor serves on any board of directors or compensation
committee of any entity which compensates any of Messrs. Dammeyer and Schulte
and Mrs. Rosenberg. As described under "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT OF JACOR" and "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS," Mr. Schulte is a principal of Zell/Chilmark, a merchant banking
firm, which invested over $73,000,000 in capital in Jacor in the Restructuring
and other transactions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 1, 1994, a subsidiary of Jacor and a corporation
wholly-owned by Randy Michaels, the President of Jacor, formed a limited
partnership (the "Partnership") in a transaction whereby the Partnership now
owns all of the stock of CMM, a marketing research and radio consulting
business. Mr. Michaels' corporation owns a 95% limited partnership interest in
the Partnership. Jacor's subsidiary obtained a 5% general partnership interest
in exchange for its contribution of approximately $126,000 cash to the
Partnership. Jacor initiated this transaction primarily to allow Mr. Michaels to
focus his full time and energy on Jacor and its business and Jacor's subsidiary
is now the sole manager of the Partnership's business.
In connection with the formation of the Partnership, Jacor agreed that Mr.
Michaels' corporation has the right between January 1, 1999 and January 1, 2000
to put its limited partnership interest to the Partnership's general partner in
exchange for 300,000 shares of Jacor Common Stock. If the put is not exercised
by January 1, 2000, the general partner has the right to call the limited
partnership interest prior to the year 2001 in exchange for 300,000 shares of
Jacor Common Stock. In addition, if certain events occur prior to January 1,
1999 including, without limitation, Mr. Michaels' termination as President of
Jacor, a reduction of Mr. Michaels' annual base salary by more than 10%,
generally any transaction by which any person or group other than Zell/Chilmark
shall become the owner of more than 30% of the outstanding voting securities of
Jacor or Zell/Chilmark fails to have its designees constitute at least a
majority of the members of the Jacor Board, then Mr. Michaels' corporation will
have the right to either (a) purchase Jacor's general partnership interest at a
price generally equal to the balance of the partnership capital account, or (b)
sell its limited partnership interest to the general partner in exchange for
300,000 shares of Jacor Common Stock.
Jacor has financed the purchase by CMM for $540,000 of a 40% interest in a
newly formed limited liability company that has purchased the assets of Duncan
American Radio, Inc. CMM is a marketing research and radio consulting business
which is owned by a limited partnership of which Jacor is the 5% general partner
and a corporation wholly owned by Randy Michaels, the president of Jacor, is the
95% limited partner. Jacor anticipates that it will finance such purchase using
cash on hand.
In 1994, Jacor entered into a real estate lease for new office space for its
Atlanta operations from an affiliate of Zell/Chilmark. The annual rental rate is
approximately $330,000. Jacor believes that the terms of
99
<PAGE>
such lease were negotiated at arm's length and were competitive with prevailing
market rates for similar space in the Atlanta market. During 1995, Jacor also
paid legal fees to the law firm of Rosenberg & Liebentritt, P.C., of which firm
Mrs. Rosenberg, a director of Jacor, is President and a member.
Equity Group Investments, Inc., an affiliate of Zell/Chilmark, has provided
Jacor with certain investment banking, financial advisory and other similar
services in connection with the Existing Credit Facility, the Financing and the
Acquisitions. In consideration for such services, Jacor paid Equity Group
Investments, Inc. a fee of approximately $3.4 million upon the consummation of
the Offerings. The services that have been and will continue to be provided by
Equity Group Investments, Inc. could not otherwise be obtained by Jacor without
the engagement of outside professional advisors. Jacor believes that such fee is
less than what it would have had to pay outside professional advisors for
similar services.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Coopers & Lybrand L.L.P. (the
"Auditors") was engaged by Jacor to audit Jacor's consolidated financial
statements for the year ended December 31, 1995. It is anticipated that a
representative of the Auditors will attend the Jacor Annual Meeting for the
purpose of responding to appropriate questions. At the meeting, a representative
of the Auditors will be afforded an opportunity to make a statement if the
Auditors so desire. The Audit Committee has recommended that the Auditors be
retained as Jacor's principal accounting firm for 1996.
SHAREHOLDER PROPOSALS FOR 1997 JACOR ANNUAL MEETING
Jacor shareholders may submit proposals to be voted on at the 1997 Jacor
Annual Meeting of Shareholders. At the time any such proposal is submitted, the
proponent must be a record or beneficial owner of at least 1% or $1,000 in
market value of Jacor's shares entitled to vote on the proposal and must have
held such shares for at least one year and continue to own such shares through
the date of the 1997 Jacor Annual Meeting. In order for a shareholder proposal
to be included in the proxy statement and form of proxy for the 1997 Jacor
Annual Meeting of Shareholders, the proposal must be received at Jacor's
principal executive offices not later than December 1, 1996 and must otherwise
comply with applicable requirements established by the Commission.
ANNUAL REPORT
THE ANNUAL REPORT OF JACOR FOR THE YEAR ENDED DECEMBER 31, 1995, WAS MAILED
TO JACOR SHAREHOLDERS BEGINNING ON OR ABOUT APRIL 18, 1996. IF YOU HAVE NOT
RECEIVED THE ANNUAL REPORT, PLEASE NOTIFY JACOR COMMUNICATIONS, INC., INVESTOR
SERVICES DEPARTMENT, 1300 PNC CENTER, 201 EAST FIFTH STREET, CINCINNATI, OHIO
45202, TELEPHONE: (513) 621-1300, AND A COPY WILL BE SENT TO YOU.
EXPERTS
The consolidated balance sheets of Jacor Communications, Inc. and
Subsidiaries as of December 31, 1995 and 1994 and the consolidated statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1995 incorporated by reference in this Proxy
Statement/ Information Statement/Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
The consolidated financial statements of Citicasters Inc. appearing in
Citicasters Inc.'s Annual Report (Form 10-K) for the year ended December 31,
1995, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon (which contains an explanatory paragraph with respect to
Citicasters Inc.'s emergence from bankruptcy and subsequent adoption of
"fresh-start reporting" as of December 31, 1993, as more fully described in Note
B to the consolidated financial statements), included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
100
<PAGE>
The consolidated financial statements of Noble Broadcast Group, Inc. as of
December 31, 1995 and December 25, 1994 and for each of the three years in the
period ended December 31, 1995, incorporated by reference in this Proxy
Statement/Information Statement/Prospectus, have been so incorporated in
reliance on the report (which includes an explanatory paragraph relating to
Jacor's agreement to purchase Noble Broadcast Group, Inc. as described in Note 2
to the consolidated financial statements), of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
The legality of the Jacor Warrants to be issued in connection with the
Merger is being passed upon for Jacor by Graydon, Head & Ritchey, Cincinnati,
Ohio.
OTHER MATTERS
The Jacor Board knows of no business to be transacted at the Jacor Annual
Meeting other than that set forth in the accompanying Notice of Annual Meeting.
If, however, other matters requiring a vote of Jacor shareholders properly come
before the meeting, it is intended that the persons designated in the
accompanying Proxy to vote the shares of Jacor Common Stock represented thereby
will do so in accordance with their best judgment on such matters. If a
shareholder specifies a different choice on the Proxy, his or her shares of
Jacor Common Stock will be voted in accordance with the specification so made.
101
<PAGE>
INDEX OF DEFINED TERMS
Set forth below is a list of defined terms used in this Proxy
Statement/Information Statement/Prospectus and the page on which each such term
is defined.
<TABLE>
<CAPTION>
TERM PAGE
- ----------------------------------------------------------------------------------------------------------- -----
<S> <C>
1993 Warrants.............................................................................................. 11
1996 Stock Offering........................................................................................ 10
Acquisition Corp. ......................................................................................... 1
Acquisitions............................................................................................... 13
Antitrust Division......................................................................................... 17
American Financial......................................................................................... 93
Auditors................................................................................................... 100
Base Case Performance Scenario............................................................................. 32
Business combination....................................................................................... 81
Cash Consideration......................................................................................... 1
CMM........................................................................................................ 73
Chapter 1704 Transaction................................................................................... 79
Change of Control.......................................................................................... 44
Citicasters................................................................................................ 1
Citicasters Articles....................................................................................... 76
Citicasters Board.......................................................................................... 1
Citicasters Bylaws......................................................................................... 76
Citicasters Certificates................................................................................... 33
Citicasters Common Stock................................................................................... 1
Citicasters Notes.......................................................................................... 42
Citicasters Note Indenture................................................................................. 42
Citicasters Record Date.................................................................................... 8
Citicasters Transfer Application........................................................................... 47
Closing.................................................................................................... 1
Commission................................................................................................. 1
Communications Act......................................................................................... 18
Competing Transaction...................................................................................... 35
Consenting Stockholders.................................................................................... 8
Control Shares............................................................................................. 84
Control share acquisition.................................................................................. 80
COOs....................................................................................................... 97
Director Duty.............................................................................................. 35
EBIT....................................................................................................... 30
EBITDA..................................................................................................... 30
Effective Date............................................................................................. 9
Effective Time............................................................................................. 9
EGI........................................................................................................ 24
Escrow Agent............................................................................................... 10
Escrow Agreement........................................................................................... 10
EVA........................................................................................................ 97
Exchange Act............................................................................................... 2
Exchange Agent............................................................................................. 10
Existing Credit Facility................................................................................... 40
Expiration Date............................................................................................ 39
Fair Price Statute......................................................................................... 83
FBCA....................................................................................................... 1
</TABLE>
102
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ----------------------------------------------------------------------------------------------------------- -----
<S> <C>
FCC........................................................................................................ 11
Financing.................................................................................................. 13
First Offeror.............................................................................................. 26
Florida Control Share Acquisition Statute.................................................................. 84
FTC........................................................................................................ 49
GAMI....................................................................................................... 89
Greenmail.................................................................................................. 83
HSR Act.................................................................................................... 11
Immediate Payment.......................................................................................... 37
Indemnified Parties........................................................................................ 46
Individual Consenting Stockholders......................................................................... 37
Interested Shareholder..................................................................................... 79
Interested Stockholder..................................................................................... 81
Issuing Public Corporation................................................................................. 79
Jacor...................................................................................................... 1
Jacor Annual Meeting....................................................................................... 1
Jacor Board................................................................................................ 1
Jacor Common Stock......................................................................................... 7
Jacor February Board Meeting............................................................................... 23
Jacor Fee.................................................................................................. 28
Jacor Record Date.......................................................................................... 7
Jacor Shareholders Agreement............................................................................... 8
Jacor Warrants............................................................................................. 1
JCAC....................................................................................................... 1
Letter of Credit........................................................................................... 37
Lindner Family............................................................................................. 93
LYONs...................................................................................................... 10
LYONs Offering............................................................................................. 10
Material Adverse Effect.................................................................................... 36
Merger..................................................................................................... 1
Merger Agreement........................................................................................... 1
Merger Consideration....................................................................................... 1
Named executives........................................................................................... 94
Nasdaq National Market..................................................................................... 1
New Credit Facility........................................................................................ 10
New Jacor.................................................................................................. 1
New Jacor Board............................................................................................ 77
New Jacor Bylaws........................................................................................... 76
New Jacor Certificate...................................................................................... 76
New Jacor Class A Preferred Stock.......................................................................... 77
New Jacor Class B Preferred Stock.......................................................................... 77
New Jacor Common Stock..................................................................................... 77
New Jacor Preferred Stock.................................................................................. 77
Noble...................................................................................................... 12
Noble Acquistion........................................................................................... 12
Noble Licenses............................................................................................. 50
Nonconsummation Offer...................................................................................... 43
Noble Transfer Application................................................................................. 50
Notes...................................................................................................... 10
Notes Offering............................................................................................. 10
Notification and Report Form............................................................................... 49
</TABLE>
103
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ----------------------------------------------------------------------------------------------------------- -----
<S> <C>
Offerings.................................................................................................. 11
OmniAmerica................................................................................................ 25
Option..................................................................................................... 45
Outside Date............................................................................................... 36
Partnership................................................................................................ 99
Person..................................................................................................... 35
Present Jacor Articles..................................................................................... 76
Present Jacor Regulations.................................................................................. 76
Pro Forma Financial Information............................................................................ 55
Radio Index................................................................................................ 30
Radio Broadcasting Companies............................................................................... 31
Radio Broadcasting Industry................................................................................ 31
Registration Statement..................................................................................... 1
Reincorporation............................................................................................ 1
Reincorporation Agreement.................................................................................. 85
Reincorporation Effective Time............................................................................. 86
Restructuring.............................................................................................. 98
Retirement Plan............................................................................................ 92
Sale Event................................................................................................. 75
Salomon Brothers........................................................................................... 10
Salomon Opinion............................................................................................ 29
Second Request............................................................................................. 50
Section 203................................................................................................ 80
Securities Act............................................................................................. 1
Senior Subordinated Note Indenture......................................................................... 43
Stock Option Plans......................................................................................... 45
Stock Purchase Plan........................................................................................ 96
Stockholders Agreement..................................................................................... 8
Superior Case Performance Scenario......................................................................... 32
Telecom Act................................................................................................ 18
Television Index........................................................................................... 30
Television Broadcasting Companies.......................................................................... 31
Television Broadcasting Industry........................................................................... 31
Warrant Agent.............................................................................................. 9
Warrant Consideration...................................................................................... 1
Warrant Price.............................................................................................. 38
ZC Limited................................................................................................. 91
Zell/Chilmark.............................................................................................. 8
</TABLE>
104
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNEX I
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JACOR COMMUNICATIONS, INC.,
JCAC, INC.
AND
CITICASTERS INC.
DATED AS OF FEBRUARY 12, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
ARTICLE 1--THE MERGER; EFFECTIVE TIME; CLOSING............................................................. 1
1.1 The Merger...................................................................................... 1
1.2 The Closing..................................................................................... 1
1.3 Effective Time.................................................................................. 2
ARTICLE 2-- ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.....
2
2.1 Articles of Incorporation....................................................................... 2
2.2 By-Laws......................................................................................... 2
2.3 Directors....................................................................................... 2
ARTICLE 3--CONVERSION OF SHARES............................................................................ 2
3.1 Conversion of Shares; Options................................................................... 2
3.2 Exchange Procedures............................................................................. 3
ARTICLE 4--REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................... 4
4.1 Organization and Standing....................................................................... 4
4.2 Authorization, Validity and Effect.............................................................. 5
4.3 Capitalization.................................................................................. 5
4.4 Company Subsidiaries............................................................................ 5
4.5 No Conflict; Required Filings and Consents...................................................... 6
4.6 Company Reports; Financial Statements........................................................... 6
4.7 Tax and Accounting Matters...................................................................... 7
4.8 Properties...................................................................................... 8
4.9 Compliance with Laws; FCC Authorizations........................................................ 8
4.10 Employee Benefit Plans.......................................................................... 9
4.11 Material Contracts.............................................................................. 10
4.12 Legal Proceedings............................................................................... 10
4.13 Certain Information............................................................................. 11
4.14 No Brokers...................................................................................... 11
4.15 Opinion of Financial Advisor.................................................................... 11
4.16 Environmental................................................................................... 11
4.17 Personnel....................................................................................... 12
4.18 Takeover Statutes............................................................................... 12
4.19 Cash Flow....................................................................................... 12
ARTICLE 5--REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUB.............................................. 12
5.1 Organization and Standing....................................................................... 12
5.2 Authorization, Validity and Effect.............................................................. 13
5.3 Capitalization.................................................................................. 13
5.4 No Conflict; Required Filings and Consent....................................................... 13
5.5 Acquiror Reports; Financial Statements.......................................................... 14
5.6 Legal Proceedings............................................................................... 14
5.7 Certain Information............................................................................. 14
5.8 Ownership of Company Common Stock............................................................... 15
5.9 Merger Sub...................................................................................... 15
5.10 Acquiror's Financing............................................................................ 15
5.11 Qualification as a Licensee..................................................................... 15
5.12 No Brokers...................................................................................... 15
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
ARTICLE 6--COVENANTS AND AGREEMENTS........................................................................ 15
6.1 No Solicitation and Other Actions............................................................... 15
6.2 Interim Operations of the Company............................................................... 16
6.3 Shareholder Approval............................................................................ 18
6.4 Information Statement; Registration Statement................................................... 18
6.5 Notification.................................................................................... 19
6.6 Employee Benefits............................................................................... 19
6.7 Investigation and Confidentiality............................................................... 19
6.8 Filings; Other Action........................................................................... 19
6.9 Indemnification and Insurance................................................................... 20
6.10 Publicity....................................................................................... 20
6.11 Transfer Taxes.................................................................................. 20
6.12 Letter of Credit................................................................................ 21
6.13 Environmental Inspection........................................................................ 21
6.14 Acknowledgement of Consents..................................................................... 21
6.15 Rule 145 Affiliates............................................................................. 21
6.16 Actions With Respect to the Warrants............................................................ 21
ARTICLE 7--CONDITIONS TO CONSUMMATION OF THE MERGER..................................................... 21
7.1 Conditions to Obligations of the Parties........................................................ 21
7.2 Conditions to Obligations of the Company........................................................ 22
7.3 Conditions to Obligations of Acquiror and Sub................................................... 22
ARTICLE 8--TERMINATION OF AGREEMENT........................................................................ 23
8.1 Termination..................................................................................... 23
8.2 Effect of Termination........................................................................... 24
ARTICLE 9--MISCELLANEOUS AND GENERAL....................................................................... 25
9.1 Expenses........................................................................................ 25
9.2 Successors and Assigns.......................................................................... 25
9.3 Third Party Beneficiaries....................................................................... 25
9.4 Notices......................................................................................... 25
9.5 Complete Agreement.............................................................................. 26
9.6 Captions; References............................................................................ 26
9.7 Amendment....................................................................................... 26
9.8 Waiver.......................................................................................... 26
9.9 Governing Law................................................................................... 27
9.10 Non-Survival of Representations, Warranties and Covenants....................................... 27
9.11 Severability.................................................................................... 27
9.12 Enforcement of Agreement........................................................................ 27
9.13 Counterparts.................................................................................... 27
</TABLE>
ii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February
12, 1996, among CITICASTERS INC. (the "Company"), a Florida corporation, JACOR
COMMUNICATIONS, INC. ("Acquiror"), an Ohio corporation, and JCAC, INC. ("Sub"),
a Florida corporation and a direct wholly owned Subsidiary of Acquiror.
RECITALS
WHEREAS, the respective Boards of Directors of the Company, Acquiror and Sub
have determined that a business combination between the Company, Acquiror and
Sub is in the best interests of their respective companies and shareholders;
WHEREAS, concurrently with the execution hereof, in order to induce Acquiror
to enter into this Agreement, Acquiror is entering into a Stockholders Agreement
(the "Stockholders Agreement") with Great American Insurance Company, American
Financial Corporation, American Financial Enterprises, Inc., Carl H. Lindner, S.
Craig Lindner and The Carl H. Lindner Foundation (the "Consenting Stockholders")
providing for certain voting and other restrictions with respect to the shares
of Company Common Stock (as defined in subsection 3.1(a)) beneficially owned by
the Consenting Stockholders upon the terms and conditions specified therein; and
WHEREAS, Acquiror, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, the Company, Acquiror and
Sub hereby agree as follows:
ARTICLE 1
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 THE MERGER. (a) Subject to the terms and conditions contained in this
Agreement, at the Effective Time (as defined in Section 1.3), Sub shall be
merged with and into the Company in accordance with the applicable provisions of
the Florida Business Corporation Act (the "FBCA"), and the separate corporate
existence of Sub shall thereupon cease (the "Merger"). Following the Merger, the
Company shall continue as the surviving corporation (sometimes hereinafter
referred to as the "Surviving Corporation") and shall be a wholly owned
Subsidiary of Acquiror.
(b) At the Effective Time, the corporate existence of the Company, with all
its rights, privileges, powers and franchises, shall continue unaffected and
unimpaired by the Merger. The Merger shall have the effects specified in the
FBCA.
1.2 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Graydon, Head &
Ritchey, 1900 Fifth Third Center, Cincinnati, Ohio, at 10:00 a.m., local time,
on the first business day immediately following the date on which the last of
the conditions (excluding conditions that by their terms cannot be satisfied
until the Closing Date) set forth in Article 7 is satisfied or waived in
accordance herewith, or at such other date, time and place as the Company and
Acquiror may agree in writing. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date".
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1.3 EFFECTIVE TIME. At or as promptly as practicable after the Closing,
the parties hereto shall cause articles of merger, in the form attached hereto
as Schedule 1.3 (the "Articles of Merger"), executed in accordance with the
relevant provisions of the FBCA, to be filed with the Department of State of the
State of Florida as provided in Section 607.1105 of the FBCA. Upon the
completion of such filing, or at such other time as may be specified in such
filing, the Merger shall become effective in accordance with the FBCA. The time
and date on which the Merger becomes effective is herein referred to as the
"Effective Time".
ARTICLE 2
ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION
2.1 ARTICLES OF INCORPORATION. At the Effective Time and without any
further action on the part of the Company or Sub, the articles of incorporation
of Sub, as in effect immediately prior to the Effective Time and amended as set
forth in the Articles of Merger, shall become the articles of incorporation of
the Surviving Corporation until thereafter amended as provided therein and under
the FBCA.
2.2 BY-LAWS. At the Effective Time and without any further action on the
part of the Company or Sub, the by-laws of Sub, as in effect immediately prior
to the Effective Time, shall become the by-laws of the Surviving Corporation
until thereafter amended or repealed in accordance with their terms and the
articles of incorporation of the Surviving Corporation and as provided under the
FBCA.
2.3 DIRECTORS. The directors and officers of Sub at the Effective time
shall, from and after the Effective Time, be the directors and officers of the
Surviving Corporation until the successors of all such persons shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's articles
of incorporation and by-laws.
ARTICLE 3
CONVERSION OF SHARES
3.1 CONVERSION OF SHARES; OPTIONS. (a) At the Effective Time, each share
of Class A Common Stock, par value $.01 per share, of the Company (the "Company
Common Stock") issued and outstanding immediately prior to the Effective Time
(other than Company Common Stock owned by the Company, Acquiror, Sub or any
direct or indirect Subsidiary of the Company, Acquiror or Sub, or any Company
Common Stock held in the treasury of the Company) shall, by virtue of the Merger
and without any action on the part of the holders thereof, be converted into and
represent the right to receive: (i) $29.50 in cash, plus, in the event that the
Closing does not occur prior to October 1, 1996, for each full calendar month
ending prior to the Closing, commencing with October, 1996, an additional amount
of $.22125 in cash (the "Cash Consideration"); plus (ii) a warrant to acquire a
fractional share (determined as provided below) of the Acquiror Common Stock (as
defined below) (the "Warrant Consideration") (the Cash Consideration and the
Warrant Consideration being collectively referenced as the "Merger
Consideration") on the terms described in the Warrant Agreement to be executed
at Closing substantially in the form attached hereto as Exhibit 3.1 (a
"Warrant"). The Warrant Consideration shall consist of a fractional share the
numerator of which is 4,400,000 and the denominator of which is the number of
shares of Company Common Stock, on a fully diluted basis, outstanding on the
Closing Date. Subject to the terms of the Warrant Agreement, the Warrants shall
expire on the fifth anniversary of the Effective Time and shall have an exercise
price of $28.00 per full share if the Effective Time is prior to October 1, 1996
and $26.00 per full share if the Effective Time is on or after October 1, 1996.
The Merger Consideration shall be paid net to the shareholders (without
interest) upon surrender of the certificate or certificates that, immediately
prior to the Effective Time, represented issued and outstanding Company Common
Stock (the "Certificates"). At the time of the exercise of the Warrant each
holder of a Warrant shall receive, in lieu of any fractional share of Acquiror
Common Stock, the fair market value of such fractional share determined at the
time of the exercise of the Warrant.
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(b) At the Effective Time, all of the Company Common Stock issued and
outstanding immediately prior to the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer be
outstanding and shall be cancelled and retired and shall cease to exist, and
each holder of a Certificate representing any such Company Common Stock shall
thereafter cease to have any rights with respect to such Company Common Stock,
except each holder (other than the Company, Acquiror or Sub or any direct or
indirect Subsidiary of the Company, Acquiror or Sub) will have the right to
receive, without interest, the Merger Consideration for such Company Common
Stock upon the surrender of such Certificate or Certificates in accordance with
subsection 3.2(b).
(c) At the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time and owned by the Company,
Acquiror, Sub or any direct or indirect Subsidiary of the Company, Acquiror or
Sub, or held in the treasury of the Company immediately prior to the Effective
Time, shall no longer be outstanding, shall be cancelled without payment of any
consideration therefor and shall cease to exist, and each holder of a
Certificate representing any such Company Common Stock shall thereafter cease to
have any rights with respect to such Company Common Stock.
(d) At the Effective Time, each share of common stock, of Sub issued and
outstanding immediately prior to the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, shall be converted into
and become one fully-paid and non-assessable share of common stock, par value
$.01 per share, of the Surviving Corporation.
(e) The Company shall use its reasonable best efforts to (i) cause all
outstanding options to purchase shares of Company Common Stock (each, an
"Option") issued pursuant to the Company's 1993 Stock Option Plan or the 1994
Directors Stock Option Plan (collectively, the "Stock Option Plans") to become
fully vested and exercisable and (ii) obtain from each holder of any Option an
agreement, in form and substance reasonably satisfactory to Acquiror, to
surrender as of the Effective Time all outstanding Options, in consideration of
the payment at the Effective Time of an amount of cash per share subject to each
such Option equal to the difference between the exercise price of such Option
and the Cash Consideration (less an amount equal to all taxes required to be
withheld from such payment), plus for each share subject to such Option, the
Warrant Consideration, or, alternatively, acquire upon payment of the exercise
price an amount of cash equal to the Cash Consideration, less an amount equal to
all taxes required to be withheld, in lieu of each share formerly covered
thereby, plus for each share covered by such Option, the Warrant Consideration.
3.2 EXCHANGE PROCEDURES. (a) Securities Transfer Company shall act as
exchange agent (the "Exchange Agent") for the payment of the Merger
Consideration upon surrender of Certificates converted into the right to receive
the Merger Consideration pursuant to the Merger. Immediately after the Effective
Time, Acquiror shall make available, or cause Sub or the Surviving Corporation
to make available, to the Exchange Agent immediately available funds in an
amount necessary for the payment of the Cash Consideration (the "Funds"), and
the Warrants necessary for payment of the Warrant Consideration.
(b) Promptly after the Effective Time, the Exchange Agent shall mail to each
Person (as defined in Section 6.1 hereof) who was, at the Effective Time, a
holder of record of a Certificate or Certificates (other than the Company,
Acquiror or Sub or any direct or indirect Subsidiary of the Company, Acquiror or
Sub), a letter of transmittal and instructions for use in effecting the
surrender of the Certificates, in exchange for payment of the Merger
Consideration therefor. The letter of transmittal shall specify that delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery to and receipt of such Certificates by the Exchange Agent and shall be
in such form and have such provisions as Acquiror shall reasonably specify. Upon
surrender to the Exchange Agent of such Certificates, together with the letter
of transmittal, duly executed and completed in accordance with the instructions
thereto and such other documents as may be reasonably required by the Exchange
Agent, the Exchange Agent shall promptly issue to the persons entitled thereto,
out of the Funds, by check, the amount of cash to which such Persons are
entitled pursuant to Section 3.1 after giving effect to any required tax
withholdings, and the Warrants to which such Persons are entitled, and such
Certificates shall forthwith be marked to evidence cancellation. No interest
will be paid or
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<PAGE>
will accrue on any portion of the Merger Consideration. If payment is to be made
to a Person other than the registered holder of the Certificates surrendered, it
shall be a condition of such payment that the Certificates so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
Person requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of the
Certificates surrendered or establish to the satisfaction of the Surviving
Corporation or the Exchange Agent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.2, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration into
which the Company Common Stock represented by such Certificate shall have been
converted pursuant to Section 3.1.
(c) One hundred eighty days following the Effective Time, Acquiror shall be
entitled to cause the Exchange Agent to deliver to it any Funds (including any
interest, dividends, earnings or distributions received with respect thereto
which shall be paid as directed by Acquiror) and Warrants made available to the
Exchange Agent by Acquiror which have not been disbursed, and thereafter holders
of Certificates who have not theretofore complied with the instructions for
exchanging their Certificates shall be entitled to look only to the Acquiror for
payment as general creditors thereof with respect to the cash payable and
Warrants issuable upon due surrender of their Certificates.
(d) Acquiror shall pay all charges and expenses, including those of the
Exchange Agent, in connection with the exchange of the Merger Consideration for
Certificates.
(e) Notwithstanding anything to the contrary in this Section 3.2, none of
the Exchange Agent, Acquiror, the Company, the Surviving Corporation or Sub
shall be liable to a holder of a Certificate formerly representing Company
Common Stock for any amount properly delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(f) From and after the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of Company Common Stock that
was outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to Acquiror, the Surviving Corporation or the
Exchange Agent, they shall be cancelled and exchanged for the Merger
Consideration, as provided in this Article 3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Acquiror (the "Company Disclosure Memorandum") or in the
Company Reports (as defined in Section 4.6), the Company represents and warrants
to Acquiror as of the date of this Agreement as follows:
4.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. The Company is duly qualified to do business, and in good standing, in
the states of the United States in which the character of the properties owned
or leased by it or the conduct of its business requires it to be so qualified,
except where the failure to be so qualified or to be in good standing would not
have a Material Adverse Effect. For purposes of this Agreement, the term
"Material Adverse Effect" means, with respect to the Company, the Surviving
Corporation, Acquiror or Sub, a material adverse effect on the business, assets,
liabilities, financial condition or results of operations of such party and its
Subsidiaries taken as a whole or a material adverse effect on the ability of
such party to perform its obligations hereunder; PROVIDED, HOWEVER, that results
of operations shall not be a component of Material Adverse Effect for events
that occur after the date of this Agreement, PROVIDED, FURTHER, HOWEVER, that no
Material Adverse Effect shall be deemed to have occurred by reason of a general
deterioration in the economy or in the broadcasting industry after the date of
this Agreement. The Company has furnished to Acquiror complete and correct
copies of its Articles of Incorporation and By-laws, as amended through the date
hereof. Such Articles of Incorporation and By-laws are in full force and effect
and no other organizational documents are applicable to or binding upon the
Company.
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4.2 AUTHORIZATION, VALIDITY AND EFFECT. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby to be executed and delivered by it,
and, subject to receipt of necessary shareholder approval, to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and such other agreements and documents, and the consummation of the
transactions contemplated herein and therein, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
the Company, subject, with respect to this Agreement, to the approval of the
shareholders of the Company as set forth below. This Agreement has been duly and
validly executed and delivered by the Company and represents the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
4.3 CAPITALIZATION. (a) The authorized capital stock of the Company
consists of (i) 500,000,000 shares of Company Common Stock, of which, as of
February 9, 1996, 20,236,633 shares were issued and outstanding, (ii)
125,000,000 shares of Class B Common Stock, par value $.01 per share (the "Class
B Shares"), of which no shares are issued and outstanding, and (iii) 9,500,000
shares of Preferred Stock, par value $.01 per share (the "Company Preferred
Shares"), of which no shares are issued and outstanding (the Company Common
Stock, the Class B Shares and the Company Preferred Shares are referred to
herein, collectively, as the "Company Capital Stock"). All of the issued and
outstanding shares of Company Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable. As of February 9, 1996, the
Company had outstanding Options representing the right to acquire from the
Company not more than 1,611,437.5 shares of Company Common Stock. All such
Options, the recipient of the Option, the grant date, exercise price, vesting
and other material terms are described in Section 4.3(b) of the Company
Disclosure Memorandum.
(b) Except as set forth in subsection 4.3(a), there are no shares of capital
stock or other equity securities of the Company outstanding, and except as set
forth in subsection 4.3(b) of the Company Disclosure Memorandum, no outstanding
options, warrants or rights to subscribe for, securities or rights convertible
into or exchangeable for, or contracts, commitments or arrangements by which the
Company is or may be required to issue or sell (collectively, "Equity Rights")
additional shares of the Company Capital Stock.
(c) Since February 9, 1996, the Company has not (i) issued any shares of
Company Capital Stock or Equity Rights for shares of Company Capital Stock,
other than pursuant to the exercise of Options that were issued and outstanding
on February 9, 1996, (ii) purchased, redeemed or otherwise acquired, directly or
indirectly through one or more Company Subsidiaries, any shares of Company
Capital Stock, or (iii) declared, set aside, made or paid to the shareholders of
the Company dividends or other distributions on the outstanding Company Common
Stock.
4.4 COMPANY SUBSIDIARIES. (a) Subsection 4.4(a) of the Company Disclosure
Memorandum lists all material Subsidiaries of the Company (the "Material Company
Subsidiaries") and all other Subsidiaries. No Subsidiary other than the Material
Company Subsidiaries has any material operations, or any liabilities. Except as
indicated in subsection 4.4(a) of the Company Disclosure Memorandum, all of the
outstanding shares of capital stock of each such Material Company Subsidiary are
owned by the Company either directly or indirectly through another Material
Company Subsidiary. Except as set forth in subsection 4.4(a) of the Company
Disclosure Memorandum, no equity securities of any Material Company Subsidiary
may be required to be issued (other than to the Company or another Material
Company Subsidiary) by reason of any Equity Rights for shares of the capital
stock of any Material Company Subsidiary. Except as set forth in subsection
4.4(a) of the Company Disclosure Memorandum, there are no contracts,
commitments, understandings or arrangements by which the Company or any Material
Company Subsidiary is or may be obligated to transfer any shares of the capital
stock of any Material Company Subsidiary. Except as set forth in subsection
4.4(a) of the Company Disclosure Memorandum, all of the outstanding shares of
capital stock of each Material Company Subsidiary held by the Company or any
Material Company Subsidiary are fully paid and nonassessable and are owned by
the Company or such Material Company Subsidiary free and clear of any claim,
lien or encumbrance. Each Material Company Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, has the corporate
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power and authority necessary for it to own or lease its properties and assets
and to carry on its business as it is now being conducted, and is duly qualified
to do business and in good standing in the states of the United States in which
the ownership of its property or the conduct of its business requires it to be
so qualified, except for such jurisdictions in which the failure to be so
qualified and in good standing would not have a Material Adverse Effect. As used
in this Agreement, the term "Subsidiary" shall mean, with respect to the Company
or Acquiror, any corporation or other legal entity of which such party or any of
its subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body.
(b) Except for interests in the Company's Subsidiaries and except as set
forth in subsection 4.4(b) of the Company Disclosure Memorandum, neither the
Company nor any of the Material Company Subsidiaries owns, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or entity, other than
(i) investments of less than $1,000,000 in the aggregate and (ii) promotional
activities undertaken in the ordinary course of business.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) None of the execution
and delivery of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated herein, nor compliance by the Company
with any of the provisions hereof, will (i) conflict with or result in a breach
of any provision of the articles of incorporation or by-laws or equivalent
organizational documents of the Company or any of the Material Company
Subsidiaries, (ii) except as set forth in clause 4.5(a)(ii) of the Company
Disclosure Memorandum, constitute or result in the breach of any term, condition
or provision of, or constitute a default under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon, any property or assets of the
Company or the Material Company Subsidiaries, pursuant to any note, bond,
mortgage, indenture, license, agreement, lease or other instrument or obligation
to which any of them is a party or by which any of them or any of their
properties or assets may be subject, and that would, in any such event, have a
Material Adverse Effect, or (iii) subject to receipt of the requisite approvals
referred to in subsection 4.5(b), violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental, quasi-governmental, judicial,
quasi-judicial or regulatory authority with jurisdiction, domestic or foreign
(each, a "Governmental Authority") applicable to the Company or any of the
Material Company Subsidiaries or any of their properties or assets.
(b) Other than (i) in connection or compliance with the provisions of
applicable state and federal securities laws, and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder, (ii) notices
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (iii) applicable approvals of the Federal Communications Commission
(the "FCC") pursuant to applicable laws and regulations ("Communications Law");
(iv) filings with the Department of State of the State of Florida required to
effect the Merger under the FBCA, (v) in connection or compliance with the
applicable requirements of the Internal Revenue Code of 1986, as amended, (the
"Code") and state, local and foreign tax laws, (vi) as set forth in subsection
4.5(b) of the Company Disclosure Memorandum, and (vii) where the failure to give
such notice, make such filing or receive such order, authorization, exemption,
consent or approval would not have a Material Adverse Effect, no notice to,
filing with, authorization of, exemption by or consent or approval of any
Governmental Authority is necessary for the consummation by the Company of the
transactions contemplated in this Agreement.
(c) The affirmative written consents of the Consenting Stockholders are the
only votes or consents of the holders of any class or series of Company Capital
Stock necessary to approve this Agreement, the Merger and the transactions
contemplated hereby on behalf of the Company.
4.6 COMPANY REPORTS; FINANCIAL STATEMENTS. (a) The Company has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 1994 (collectively, the "Company Reports"). As of their respective
dates, the Company Reports and any such reports, forms and other documents filed
by the Company with the SEC after the date of this Agreement (i) complied when
made, or shall comply when made, as to form in all material respects with the
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder and (ii)
did not when made, or
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shall not when made, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The representation in clause (ii) of the preceding
sentence does not apply to any misstatement or omission in any Company Report
filed prior to the date of this Agreement that was superseded by a subsequent
Company Report filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Company and its Subsidiaries as
of December 31, 1993 and December 31, 1994 and the related statements of
operations, changes in shareholders' equity and cash flows for the year ended
December 31, 1994, together with the notes thereto, are included in the
Company's Annual Reports on Form 10-K for the fiscal years ended December 31,
1993 and December 31, 1994, respectively, as filed with the SEC, and the
unaudited consolidated balance sheets of the Company and its Subsidiaries as of
March 31, 1995, June 30, 1995 and September 30, 1995, and the related unaudited
statements of operations, changes in shareholders' equity and cash flows for the
periods then ended are included in the Company's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995,
respectively, as filed with the SEC (together, the "Company Financial
Statements"). The Company Financial Statements have been prepared in accordance
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis (except as disclosed therein) and fairly present, in all
material respects, the consolidated financial position and the consolidated
results of operations, changes in shareholders' equity and cash flows of the
Company and its consolidated Subsidiaries as of the dates and for the periods
indicated (subject, in the case of interim financial statements, to normal
recurring year-end adjustments, none of which are expected to be material, and
the absence of footnote disclosure).
(c) As of the date of this Agreement, except as set forth in the Company
Financial Statements or the notes thereto, or as described in the Company
Disclosure Memorandum, neither the Company nor any Subsidiary has any material
outstanding claims against it, liabilities or indebtedness, contingent or
otherwise, nor does there exist any condition, fact or circumstances which the
Company reasonably anticipates will create such claim or liability, other than
liabilities incurred subsequent to September 30, 1995, in the ordinary course of
business, consistent with past practices and which individually and in the
aggregate do not have a Material Adverse Effect.
(d) Since December 31, 1994 and except as disclosed in the Company Reports,
the Company and the Material Company Subsidiaries have conducted their
respective businesses only in the ordinary course and consistent with past
practices and have not subjected any of their assets or properties to any Liens
(except in connection with acquisitions disclosed in the Company Reports).
(e) From December 31, 1994 through the date of this Agreement, except as
disclosed in the Company Disclosure Memorandum and the Company Reports, there
has been no event, condition or operation that has caused or is reasonably
anticipated to cause a Material Adverse Effect on the Company.
4.7 TAX AND ACCOUNTING MATTERS. The Company and each of the Material
Company Subsidiaries have filed all material federal, state, county, local and
foreign tax returns, including information returns, required to be filed by it,
and paid or made adequate provision for the payment of all taxes shown on such
returns to be owed by it, including those with respect to income, withholding,
social security, unemployment, workers compensation, franchise, ad valorem,
premium, excise and sales taxes. The federal income tax returns of the Company
and the Material Company Subsidiaries for the fiscal year ended December 31,
1985 and for all fiscal years prior thereto and fiscal years ended December 31,
1989, December 31, 1990 and December 31, 1991 are closed by the relevant statute
of limitations, and no claims for additional taxes for such fiscal years are
pending. Except as disclosed in Section 4.7 of the Company Disclosure
Memorandum, neither the Company nor any of the Material Company Subsidiaries is
a party to any pending action or proceeding, nor, to the actual knowledge of the
officers of the Company listed in Section 4.7 of the Company Disclosure
Memorandum (the "Company's Knowledge"), is any such action or proceeding
threatened, by any Governmental Authority for the assessment or collection of
taxes, interest, penalties or deficiencies that would reasonably be expected to
have a Material Adverse Effect.
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4.8 PROPERTIES. Except as disclosed or reserved against in the Company
Financial Statements, the Company and the Material Company Subsidiaries have
good and marketable title to all of the material properties and assets, tangible
or intangible, reflected in the Company Financial Statements as being owned by
the Company and the Material Company Subsidiaries as of the dates thereof, free
and clear of all liens, encumbrances, charges, defaults or equities of whatever
character, except such imperfections or irregularities of title, liens,
encumbrances, charges or defaults that are publicly disclosed or such
imperfections or irregularities of title as do not affect the use thereof in any
material respect and statutory liens securing payments not yet due ("Liens").
All leased buildings and all leased fixtures, equipment and other property and
assets that are material to its business on a consolidated basis are held under
leases or subleases that are valid instruments enforceable in accordance with
their respective terms. Section 4.8 of the Company Disclosure Memorandum
contains a list of all real estate owned or leased by the Company or a Material
Company Subsidiary, identifying which properties are owned and which are leased.
All such leases were entered into in the ordinary course of business. Other than
as indicated in the Company Disclosure Memorandum, none of the leases are with
an Affiliate or contain any material terms or conditions which make any such
lease unreasonably onerous or commercially unreasonable.
4.9 COMPLIANCE WITH LAWS; FCC AUTHORIZATIONS. (a) Except as set forth in
subsection 4.9(a) of the Company Disclosure Memorandum, and except for
environmental matters, which shall be covered by Section 4.16 and which shall
not be covered by this Section 4.9, to the Company's Knowledge, each of the
Company and the Material Company Subsidiaries:
(i) is in material compliance with all laws, regulations, reporting and
licensing requirements and orders applicable to its business or employees
conducting its business, the breach or violation of which would have a
Material Adverse Effect;
(ii) has received no notification or communication from any Governmental
Authority (i) asserting that the Company or any of the Material Company
Subsidiaries is not in compliance with any of the statutes, regulations or
ordinances that such Governmental Authority enforces, which noncompliance
would have a Material Adverse Effect or (ii) threatening to revoke any
license, franchise, permit or authorization of any Governmental Authority,
which revocation would have a Material Adverse Effect.
(b) Set forth in subsection 4.9(b) of the Company Disclosure Memorandum is a
list of the FCC licenses (the "Station Licenses") that are required for the
lawful conduct of the radio and television broadcasting business and operations
of the Company and its Material Company Subsidiaries (the "Stations") in the
manner and to the full extent they are now conducted. The Company or a
Subsidiary thereof is the authorized legal holder of the Station Licenses, none
of which is subject to any material restriction or condition which would limit
the full operation of the Stations as now operated. Except as set forth in
subsection 4.9(b) of the Company Disclosure Memorandum, there are no
applications, complaints or proceedings pending or, to the Company's Knowledge,
threatened before the FCC relating to the business or operations of the Stations
other than applications, complaints or proceedings which generally affect the
radio or television broadcasting industries or those that would not have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Station Licenses listed in subsection 4.9(b) of the Company Disclosure
Memorandum are validly held, are in good standing and are in full force and
effect and are unimpaired by any act. Except as set forth in subsection 4.9(b)
of the Company Disclosure Memorandum, to the Company's Knowledge, there is no
reason related to the Company why the FCC would not approve the transfer of
control of the Company to Acquiror or any of its Subsidiaries and the renewal of
the Station Licenses upon the expiration of the current term of each such
Station License. Except as set forth in subsection 4.9(b) of the Company
Disclosure Memorandum, all reports, forms and statements required to be filed by
the Company with the FCC with respect to the Stations since the grant of the
last renewal of the Station Licenses have been timely filed and are complete and
accurate, except where the failure to so file or where the failure to be
complete and accurate would, individually or in the aggregate, not have a
Material Adverse Effect on the Company. Except as set forth in subsection 4.9(b)
of the Company Disclosure Memorandum, each Station is being operated in
compliance with the Communications Law and the specifications of the Station
Licenses, in each case in all material respects.
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4.10 EMPLOYEE BENEFIT PLANS. (a) Except as specified in the Company
Disclosure Memorandum, neither the Company nor any Material Company Subsidiary
has an "employee pension benefit plan" as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including
any "multiemployer plan" as defined in Section 3(37) of ERISA (such plans so
noted shall be referred to as the "Retirement Plans"), "employee welfare benefit
plan" as defined in Section 3(1) of ERISA including without limitation
post-employment benefit and retiree medical plans, funds and programs ("Benefit
Plans") or a "specified fringe benefit plan" as defined in Section 6039D of the
Code ("SFB Plans") (together, the Retirement Plans, Benefit Plans and SFB Plans
noted in the Company Disclosure Memorandum shall be referred to collectively as
the "Plans" and individually as a "Plan"). All Plans are maintained by the
Company.
(b) Each Plan is, and has been at all times, operated in material compliance
with all statutes, orders or governmental rules or regulations, including but
not limited to ERISA and the Code, and any and all collective bargaining
agreements and other contracts applicable thereto.
(c) The Retirement Plans, and their related trusts, if any, are qualified
and tax-exempt under Sections 401 and 501 of the Code. The Company has received
favorable determination letters from the Internal Revenue Service with respect
to the qualification and tax exempt status of the Retirement Plans and their
related trusts, if any, under the Code, and nothing has occurred (or failed to
occur) since the receipt of such determination letters to cause a loss of the
Plans' qualification and tax-exempt status.
(d) All material required reports and descriptions of the Plans (including
IRS Form 5500 Annual Reports, Summary Annual Reports and Summary Plan
Descriptions) have been appropriately filed and distributed.
(e) All material notices required by ERISA, the Code or any other state or
federal law, ruling or regulation with respect to the Plans have been
appropriately filed.
(f) All contributions to the Plans for all periods ending on or before the
Closing Date will be made prior to the Closing Date by the Company and each
Material Company Subsidiary in accordance with past practice and no Plans are
currently or shall be unfunded or underfunded as of the Closing Date.
(g) All insurance premiums (including premiums to the Pension Benefit
Guaranty Corporation) relating to the Plans have been paid in full in a timely
manner.
(h) With respect to the Plans, no prohibited transactions (as defined in
Section 406 of ERISA or Section 4975 of the Code) that would result in liability
to the Company have occurred and no reportable events (as defined in Section
4043 of ERISA) have occurred.
(i) There is not, and has not been, an accumulated funding deficiency with
respect to the Retirement Plans subject to the minimum funding requirements of
Section 412 of the Code or Section 302 of ERISA that has resulted in any
material liability to the Company that has not been satisfied in full.
(j) No material action, suit, grievance, arbitration or other manner of
litigation, or claim with respect to the Plans or the assets thereof (other than
routine claims for benefits made in the ordinary course of plan administration)
are pending, threatened against or with respect to the Plans, the Company, any
Material Company Subsidiary or any fiduciaries (as defined in Section 3(21) of
ERISA) of the Plans (including any action, suit, grievance, arbitration or other
manner of litigation, or claim regarding conduct which allegedly interferes with
the attainment of rights under a Plan).
(k) Except as set forth in the Company Disclosure Memorandum, neither the
Company nor any Material Company Subsidiary has ever contributed, nor has it
ever been required to contribute, to any "multiemployer plans" (as defined in
Section 3(37) of ERISA) and neither the Company nor any Material Company
Subsidiary has or will incur any withdrawal liability with respect to any such
plans.
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(l) Except as set forth in the Company Disclosure Memorandum, neither the
Company nor any Material Company Subsidiary has any stock purchase plan, stock
option plan, phantom stock plan, stock appreciation rights plan, bonus plan or
any severance, deferred compensation or retirement plans or similar agreements
(whether or not subject to ERISA).
(m) The Company and each Material Company Subsidiary has complied with COBRA
in all material respects.
(n) Any and all post-employment benefit plans, funds and programs and
retiree medical plans, funds and programs of the Company or its Material Company
Subsidiaries have been fully funded and neither the Company nor any Material
Company Subsidiary has any further obligation to make any additional
contributions to such plans.
4.11 MATERIAL CONTRACTS. Set forth in Section 4.11 of the Company
Disclosure Memorandum is a list, as of the date hereof, of the following
agreements (the "Company Contracts"):
(a) each partnership or joint venture agreement to which the Company or
any Material Company Subsidiary is a party;
(b) each agreement limiting the right of the Company or any Material
Company Subsidiary to engage in or compete with any Person in any business
or geographical area;
(c) each agreement or other arrangement of or involving the Company or
any Material Company Subsidiary with respect to indebtedness for money
borrowed, including letters of credit, guaranties, indentures, swaps and
similar agreements;
(d) each management, consulting, employment, severance or similar
agreement requiring the payment of compensation in excess of $150,000
annually, to which the Company or any of the Material Company Subsidiaries
is a party, other than agreements with on-air talent;
(e) each collective bargaining agreement to which the Company or any
Material Company Subsidiary is a party;
(f) each agreement with a national sales representative to which the
Company or any Material Company Subsidiary is a party;
(g) each network affiliation agreement to which the Company or any
Material Company Subsidiary is a party; and
(h) each agreement with any Affiliate of the Company (other than
employment agreements) to which the Company or any Material Company
Subsidiary is a party which involves total payments or liabilities to or
from the Company or any Material Company Subsidiary in excess of $60,000.
Each of the Company Contracts is in full force and effect and is a legal, valid
and binding contract or agreement, and there is no default or breach (or, to the
Company's Knowledge, any event that, with the giving of notice or lapse of time
or both would result in a material default or breach) by the Company or any of
the Material Company Subsidiaries, or, to the Company's Knowledge, any other
party, in the timely performance of any obligation to be performed or paid
thereunder or any other material provision thereof, that, individually or in the
aggregate, would have a Material Adverse Effect. The Company acknowledges that
there are certain material contracts (including without limitation agreements
concerning radio syndicated programming and network affiliation and other
material agreements which are not available at the Company's corporate offices
on the date hereof), some of which are listed on Section 4.11 of the Company
Disclosure Memorandum and some of which are not, that have not been furnished to
Acquiror as of the date of this Agreement (the "Undisclosed Contracts"). Within
ten days after the date hereof, the Company will deliver to Acquiror copies of
all Undisclosed Contracts.
4.12 LEGAL PROCEEDINGS. As of the date of this Agreement, except as
disclosed in the Company Reports or as set forth in Section 4.12 of the Company
Disclosure Memorandum, there are no actions, suits, investigations or
proceedings instituted or pending, or to the Company's Knowledge, overtly
threatened, against the Company or any of the Material Company Subsidiaries, or
against any property, asset, interest or
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right of any of them, that involve more than $100,000 in controversy, or that
seek relief other than money damages from the Company or a Subsidiary, or that
would have, either individually or in the aggregate, a Material Adverse Effect
if adversely decided. Neither the Company nor any of the Material Company
Subsidiaries is subject to any judgment, order, writ, injunction or decree that
would have a Material Adverse Effect.
4.13 CERTAIN INFORMATION. (a) When the Registration Statement (as defined
in Section 6.4) to be filed with the SEC by Acquiror pursuant to Section 6.4
hereof or any post-effective amendment thereto shall become effective, and at
all times subsequent to such effectiveness up to and including the Effective
Time, such Registration Statement and all amendments or supplements thereto,
with respect to all information set forth therein furnished by the Company
relating to the Company or its Subsidiaries, shall comply as to form in all
material respects with the provisions of all applicable securities laws. Any
written information supplied or to be supplied by the Company specifically for
inclusion in the Registration Statement will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made
not misleading.
(b) None of the information supplied or to be supplied by the Company for
inclusion in the Information Statement (as defined in Section 6.4) shall, at the
time such document is filed with the SEC and when it is first mailed to the
shareholders of the Company, be false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event occurs which
should be described in the Information Statement or any supplement or amendment
thereto, the Company will file and disseminate, as required, a supplement or
amendment which complies as to form in all material respects with the provisions
of all applicable securities laws. Prior to its filing with the SEC, the
Information Statement and each amendment or supplement thereto shall be
delivered to Acquiror and its counsel. All documents that the Company is
responsible for filing with the SEC or any other Governmental Authority in
connection with the transactions contemplated hereby shall comply as to form in
all material respects with the provisions of applicable law and the applicable
rules and regulations thereunder.
4.14 NO BROKERS. The Company has not entered into any contract,
arrangement or understanding with any Person or firm that may result in the
obligation of the Company, Acquiror or Sub to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, except that the Company has retained Salomon Brothers Inc
as its financial advisor (the "Company Financial Advisor"), which Financial
Advisor may be entitled to an advisor fee of up to $3.0 million in connection
with the transactions contemplated hereby. In addition, the Company may
reimburse certain third parties for legal expenses incurred by such third
parties not to exceed $250,000 in the aggregate.
4.15 OPINION OF FINANCIAL ADVISOR. The Company has received the opinion of
the Company Financial Advisor to the effect that, as of the date hereof, the
consideration to be received by the holders of the Company Common Stock in the
Merger is fair to such holders from a financial point of view. A copy of such
opinion shall be delivered to Acquiror within 24 hours of its receipt by the
Company.
4.16 ENVIRONMENTAL. Except insofar as inaccuracies in the following
statements would not have a Material Adverse Effect on the Company: (i) The
properties owned or leased by the Company or any Subsidiary and properties
formerly owned or leased by the Company or any Subsidiary for which the Company
has contractual liability (the "Company Properties") are in compliance in all
material respects with all applicable federal, state and local environmental and
hazardous waste laws and regulations; (ii) no enforcement actions are pending or
threatened against the Company or any Subsidiary and no notice of potential
liability or administrative or judicial proceedings (including notices regarding
clean up of off-site third party hazardous waste sites) has been received; (iii)
there does not now exist on the Company Properties, and there has not occurred
on, from or under the Company Properties, a material disposal or release of,
Hazardous Substances, Hazardous Wastes or Contaminants; (iv) the Company
Properties contain no unregistered underground storage tanks; (v) neither the
Company nor any Subsidiary nor any of their respective predecessors has any
contingent liability in connection with the release of any Hazardous Substances,
Hazardous Wastes or Contaminants into the environment; (vi) all broadcast
facilities operated
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by the Company or any Subsidiary are, and at all times prior hereto were, in
compliance with all applicable rules and regulations relating to RF radiation
produced by a broadcast station; and (vii) neither the Company or any Subsidiary
nor any of their respective predecessors has (A) given any release or waiver of
liability that would waive or impair any claim based on Hazardous Substances,
Hazardous Wastes or Contaminants to any current or prior tenant or owner of any
real property owned or leased at any time by either the Company or any
Subsidiary or to any party who may be potentially responsible for the presence
of Hazardous Substances, Hazardous Wastes or Contaminants on any such real
property; or (B) made any promise of indemnification to any party regarding
Hazardous Substances, Hazardous Wastes or Contaminants that may be located on
any real property owned or leased at any time by either the Company or any
Subsidiary or any of their respective predecessors. Section 4.16 of the Company
Disclosure Memorandum contains a description of environmental indemnities of
which either the Company or any Subsidiary is a beneficiary.
4.17 PERSONNEL. (a) Except as disclosed in Sections 4.10 and 4.11 of the
Company Disclosure Memorandum, or as required pursuant to Section 6.6(c) hereof,
there is no employment agreement, employee benefit or incentive compensation
plan or program or severance policy or program to which the Company or any
Material Company Subsidiary is a party (i) that is or could, pursuant to its
terms, be triggered or accelerated by reason of or in connection with the
execution of this Agreement or the consummation of the transactions contemplated
by this Agreement or (ii) which contains "change in control" provisions pursuant
to which the payment, vesting or funding of compensation or benefits is or by
reason of or in connection with the execution of or consummation of the
transactions contemplated by this Agreement or the transactions contemplated by
this Agreement.
(b) Except as set forth on Section 4.11 of the Company Disclosure
Memorandum, there are no labor disputes existing, or to the Company's Knowledge,
threatened, involving strikes, work stoppages, slow downs or lockouts. There are
no grievance proceedings or claims of unfair labor practices filed or, to the
Company's Knowledge, threatened to be filed with the National Labor Relations
Board against the Company or any Material Company Subsidiary. To the Company's
Knowledge, there is no union representation or organizing effort pending or
threatened against the Company or any Material Company Subsidiary. Neither the
Company nor any Material Company Subsidiary has agreed to recognize any union or
other collective bargaining unit except those governed by the terms of the
agreements listed in Section 4.11 of the Company Disclosure Memorandum.
4.18 TAKEOVER STATUTES. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
any federal or state or other foreign law, applicable to the Company is
applicable to the Merger or the other transactions contemplated hereby.
4.19 CASH FLOW. The sum of the Company's (i) operating income, (ii)
amortization and depreciation and (iii) corporate, general and administrative
expenses, each as reflected in the Company's Audited Statement of Operations
contained in its Annual Report on Form 10-K for the fiscal year ended December
31, 1995, shall not be less than $52,711,000.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUB
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to the Company (the "Acquiror Disclosure Memorandum"), Acquiror
and Sub represent and warrant to the Company as of the date of this Agreement as
follows:
5.1 ORGANIZATION AND STANDING. Each of Acquiror and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of its incorporation. Each of Acquiror and Sub is duly qualified to do
business, and in good standing, in the states of the United States in which the
character of the properties owned or leased by it or in which the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified or to be in good standing would not have a Material Adverse Effect.
Acquiror has furnished to the Company complete and correct copies of its
Articles of Incorporation
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and Code of Regulations as amended, through the date hereof. Such Articles of
Incorporation and Code of Regulations are in full force and effect and no other
organizational documents are applicable to or binding upon Acquiror.
5.2 AUTHORIZATION, VALIDITY AND EFFECT. Each of Acquiror and Sub has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby to be executed and
delivered by it, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and such other agreements
and documents, and the consummation of the transactions contemplated herein and
therein, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of each of Acquiror and Sub. This Agreement has
been duly and validly executed and delivered by each of Acquiror and Sub and
represents the legal, valid and binding obligation of each of Acquiror and Sub,
enforceable against each of them in accordance with its terms.
5.3 CAPITALIZATION. The authorized capital stock of Acquiror consists of
40,000,000 Common Shares, of which, as of February 1, 1996, 18,163,425 shares
were issued and outstanding (the "Acquiror Common Stock"). The Automatic
Conversion (as such term is defined in the Amended and Restated Articles of
Acquiror) has occurred. Except as set forth in this Section 5.3 or Section 5.3
of the Acquiror Disclosure Memorandum, there are no shares of capital stock or
other equity securities of Acquiror outstanding and there are no outstanding
Equity Rights for additional shares of Acquiror Capital Stock. All of the issued
and outstanding shares of Acquiror Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable.
5.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) None of the execution
and delivery of this Agreement by Acquiror or Sub, nor the consummation by
Acquiror or Sub of the transactions contemplated herein, nor compliance by
Acquiror or Sub with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of the articles of incorporation or by-laws
or equivalent organizational documents of Acquiror or Sub, (ii) constitute or
result in the breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon, any property or assets of Acquiror or Sub or, pursuant to any
note, bond, mortgage, indenture, license, agreement, lease or other instrument
or obligation to which either of them is a party or by which either of them or
their respective properties or assets may be subject, and that would, in any
such event, have a Material Adverse Effect, or (iii) subject to receipt of the
requisite approvals referred to in subsection 5.4(b) of the Acquiror Disclosure
Memorandum, to the actual knowledge of the officers of Acquiror listed in clause
5.4(a)(iii) of the Acquiror Disclosure Memorandum ("Acquiror's Knowledge"),
violate any order, writ, injunction, decree, statute, rule or regulation of any
Governmental Authority applicable to Acquiror, Sub or any of their respective
properties or assets.
(b) Other than (i) in connection or compliance with the provisions of
applicable state and federal securities laws, and the rules and regulations of
the SEC thereunder, including the registration of Warrants issuable in the
Merger at the Effective Time pursuant to the Registration Statement, (ii)
notices and completion of waiting periods under the HSR Act, (iii) applicable
approvals of the FCC, (iv) filings with the Department of State of the State of
Florida required to effect the Merger under the FBCA, (v) in connection or
compliance with the applicable requirements of the Code and state, local and
foreign tax laws, (vi) as set forth in subsection 5.4(b) of the Acquiror
Disclosure Memorandum, and (vii) where the failure to give such notice, make
such filing, or receive such authorization, exemption, consent or approval would
not have a Material Adverse Effect, no notice to, filing with, authorization of,
or exemption by, or consent or approval of any Governmental Authority is
necessary for the consummation by Acquiror or Sub of the transactions
contemplated in this Agreement.
(c) The affirmative vote of the shares of Acquiror Common Stock beneficially
owned by The Zell/ Chilmark Fund L.P. at a meeting of the shareholders of
Acquiror duly called for such purpose is sufficient, and no further vote or
consent of any class or series of capital stock of Acquiror is necessary, to
approve the authorization for issuance by Acquiror of shares of Acquiror Common
Stock and Warrants in an amount necessary for payment of the Merger
Consideration.
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5.5 ACQUIROR REPORTS; FINANCIAL STATEMENTS. (a) The Acquiror has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 1994 (collectively, the "Acquiror Reports"). As of their respective
dates, the Acquiror Reports and any such reports, forms and other documents
filed by the Acquiror with the SEC after the date of this Agreement (i) complied
when made, or shall comply when made, as to form in all material respects with
the applicable requirements of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder and (ii) did not when made, or
shall not when made, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The representation in clause (ii) of the preceding
sentence does not apply to any misstatement or omission in any Acquiror Report
filed prior to the date of this Agreement that was superseded by a subsequent
Acquiror Report filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Acquiror and its Subsidiaries as
of December 31, 1993 and December 31, 1994 and the related statements of
operations, changes in shareholders' equity and cash flows for the year ended
December 31, 1994, together with the notes thereto, are included in the
Acquiror's Annual Reports on Form 10-K for the fiscal years ended December 31,
1993 and December 31, 1994, respectively, as filed with the SEC, and the
unaudited consolidated balance sheets of the Acquiror and its Subsidiaries as of
March 31, 1995, June 30, 1995 and September 30, 1995, and the related unaudited
statements of operations, changes in shareholders' equity and cash flows for the
periods then ended are included in the Acquiror's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995,
respectively, as filed with the SEC (together, the "Acquiror Financial
Statements"). The Acquiror Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis (except as disclosed therein) and fairly
present, in all material respects, the consolidated financial position and the
consolidated results of operations, changes in shareholders' equity and cash
flows of the Acquiror and its consolidated Subsidiaries as of the dates and for
the periods indicated (subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which are expected to be
material, and the absence of footnote disclosure). The Acquiror and its
Subsidiaries do not have any material liabilities not disclosed on the Acquiror
Financial Statements.
5.6 LEGAL PROCEEDINGS. As of the date of this Agreement and except as set
forth in Section 5.6 of the Acquiror Disclosure Memorandum, there are no
actions, suits or proceedings instituted or pending, or to Acquiror's Knowledge,
overtly threatened, against Acquiror or Sub, or against any property, asset,
interest or right of any of them, that involve more than $100,000 in
controversy, or that seek relief other than money damages from the Acquiror or
any Subsidiary, or that would have, either individually or in the aggregate, a
Material Adverse Effect on Acquiror if adversely decided. Neither Acquiror nor
Sub is subject to any judgment, order, writ, injunction or decree that would
have a Material Adverse Effect.
5.7 CERTAIN INFORMATION. (a) When the Registration Statement or any
post-effective amendment thereto shall become effective, and at times subsequent
to such effectiveness up to and including the Effective Time, the Registration
Statement and all amendments or supplements thereto, shall comply as to form in
all material respects with the provisions of all applicable securities laws. If
at any time prior to the Effective Time any event occurs which should be
described in the Registration Statement or any supplement or amendment thereto,
Acquiror will file and disseminate, as required, a supplement or amendment which
complies as to form in all material respects with the provisions of all
applicable securities laws. Prior to its filing with the SEC, the Registration
Statement and each amendment or supplement thereto shall be delivered to the
Company and its counsel. With respect to any information supplied by Acquiror,
the Registration Statement will not, at the time the prospectus included therein
is mailed to shareholders of the Company, and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) None of the information supplied or to be supplied by Acquiror or Sub
for inclusion in the Information Statement shall, at the time such document is
filed with the SEC or when it is first mailed to the shareholders of the
Company, be false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. All
documents that Acquiror or Sub are responsible for filing with the SEC or
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any other Governmental Authority in connection with the transactions
contemplated hereby shall comply as to form in all material respects with the
provisions of applicable law and the applicable rules and regulations
thereunder.
(c) When the Registration Statement or any post-effective amendment thereto
shall become effective, and at times subsequent to such effectiveness up to and
including the Effective Time, the Registration Statement and all amendments or
supplements thereto, except with respect to information set forth therein
provided by the Company, shall not be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5.8 OWNERSHIP OF COMPANY COMMON STOCK. Except as set forth in Section 5.8
of the Acquiror Disclosure Memorandum, none of Acquiror nor, to Acquiror's
Knowledge, any Affiliates (as defined below) of Acquiror or Sub, owns any shares
of Company Common Stock or other securities convertible into shares of Company
Common Stock. For purposes of this Agreement, an "Affiliate" of a specified
Person is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
5.9 MERGER SUB. Sub was formed solely for the purpose of engaging in the
transactions contemplated hereby. Sub is, and shall be on the Closing Date, a
wholly owned direct Subsidiary of Acquiror. Except for obligations or
liabilities incurred in connection with its incorporation or organization, and
the transactions contemplated hereby, Sub has not incurred any obligations or
liabilities or engaged in any business or activities of any type or kind
whatsoever or entered into any agreements or arrangements with any Person or
entity.
5.10 ACQUIROR'S FINANCING. Acquiror has or will have sufficient funds
available to consummate the transactions contemplated by this Agreement and to
pay all transaction related fees and expenses.
5.11 QUALIFICATION AS A LICENSEE. Acquiror will, from and after the date
upon which Acquiror executes the applications described in subsection 6.8, be
legally, financially and otherwise qualified under the Communications Law to be
owner and operator of the properties and assets of the Surviving Corporation,
any of its Material Company Subsidiaries, or any Station. Except as disclosed in
Section 5.11 of the Acquiror Disclosure Memorandum or in the Acquiror Reports,
no fact exists that would under the Communications Law disqualify Acquiror as
the owner and operator of the properties or assets of any Station.
5.12 NO BROKERS. Neither Acquiror nor Sub has entered into a contract,
arrangement or understanding with any Person or firm that may result in the
obligation of Acquiror, Sub or the Company to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 NO SOLICITATION AND OTHER ACTIONS. (a) From and after the date of this
Agreement and except as set forth in subsection 6.1(b), the Company shall not,
and the Company shall direct and use its reasonable best efforts to cause the
officers, directors, employees, agents, advisors and other representatives of
the Company not to, directly or indirectly, (i) solicit, initiate, knowingly
encourage, or participate in discussions or negotiations regarding, any
proposals or offers from any individual, corporation, partnership, limited
liability corporation, joint venture, trust, association, unincorporated
organization, other entity, group or Governmental Authority ("Person") relating
to any Competing Transaction (as defined in subsection 6.1(c)) or (ii) furnish
to any other Person any nonpublic information or access to such information with
respect to, or otherwise concerning, any Competing Transaction. The Company
shall immediately cease and cause to be
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terminated any existing discussions or negotiations with any third parties
conducted heretofore with respect to any proposed Competing Transaction. The
Company shall promptly disclose the identity of any Person who attempts to
initiate any discussions contemplating a Competing Transaction.
(b) Notwithstanding anything to the contrary contained in this Section 6.1
or in any other provision of this Agreement, until the consents required by the
Stockholders Agreement have been duly executed and delivered, the Company shall
not be prohibited by this Agreement from (i) participating in discussions or
negotiations with, and, during such period, the Company may furnish information
to, a Person that seeks to engage in discussions or negotiations, requests
information or makes a proposal to acquire the Company pursuant to a Competing
Transaction, if the Company's directors determine in good faith that such action
is required for the discharge of their fiduciary obligations, based upon the
written advice of independent legal counsel, who may be the Company's regularly
engaged legal counsel (a "Director Duty"); (ii) complying with Rule 14d-9 or
Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer; (iii) making any disclosure to the Company's shareholders in
accordance with a Director Duty; (iv) failing to make, modifying or amending its
recommendations, consents or approvals referred to herein in accordance with a
Director Duty; or (v) terminating this Agreement and entering into an agreement
providing for a Competing Transaction in accordance with a Director Duty. In the
event that the Company or any of its officers, directors, employees, agents,
advisors or other representatives participate in discussions or negotiations
with, or furnish information to a Person that seeks to engage in such
discussions or negotiations, requests information or makes a proposal to acquire
the Company pursuant to a Competing Transaction pursuant to this subsection
6.1(b), then: (i) the Company shall immediately disclose to the Acquiror the
decision of the Company's directors; (ii) the identity of the Person; and (iii)
copies of all information or material not previously furnished to Acquiror which
the Company, or its agents, provides or causes to be provided to such Person or
any of its officers, directors, employees, agents, advisors or representatives.
(c) For the purposes of this Agreement, "Competing Transaction" shall mean
any of the following involving the Company: (i) any merger, consolidation, share
exchange, business combination or other similar transaction; (ii) any sale,
lease, exchange, transfer or other disposition of all or substantially all of
the assets of the Company and the Material Company Subsidiaries, taken as a
whole, in a single transaction or series of related transactions; or (iii) any
tender offer or exchange offer for shares of Company Common Stock.
6.2 INTERIM OPERATIONS OF THE COMPANY. Prior to the Effective Time, except
as contemplated by any other provision of this Agreement or as set forth in
Section 6.2 of the Company Disclosure Memorandum, unless Acquiror has previously
consented in writing thereto (which consent may be withheld only after
substantive discussions with representatives of the Company) the Company shall
not, and shall not permit any of the Material Company Subsidiaries to:
(a) grant any general increase in compensation or benefits to its
employees or to its officers, except in the ordinary course consistent with
past practice or as required by law; pay any bonus compensation except in
the ordinary course consistent with past practice or in accordance with the
provisions of any applicable program or plan adopted by the Board of
Directors of the Company or such Material Company Subsidiary prior to the
date hereof; enter into or amend the terms of any severance agreements with
its officers; or effect any change in retirement benefits for any class of
its employees or officers (unless such change is required by applicable law)
that would materially increase the retirement benefit liabilities of the
Company and the Material Company Subsidiaries on a consolidated basis;
PROVIDED, HOWEVER, that nothing in this subsection (a) shall prevent the
payment or other performance of any award or grant made prior to the date
hereof and disclosed in the Company Reports filed prior to the date hereof,
the Company Disclosure Memorandum or pursuant to this Agreement;
(b) amend, alter or revise any existing employment contract,
understanding, arrangement or agreement between the Company or any of the
Material Company Subsidiaries and any Person receiving compensation
(including salary and bonus) in excess of $150,000 per year (unless such
amendment is required by law) to increase the compensation (including bonus)
or benefits payable thereunder or pursuant thereto or enter into any new
employment contract, understanding, arrangement or agreement with any Person
having a salary thereunder in excess of $150,000 that the Company or such
Material Company Subsidiary does not have the unconditional right to
terminate without liability (other than liability for services already
rendered) at any time on or after the Effective Time;
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(c) adopt any new employee benefit plan or make any change in or to any
existing Company ERISA Plans or Company Benefit Arrangements other than any
such change that (i) is required by law, (ii) in the opinion of counsel is
necessary or advisable to maintain the tax qualified status of any such,
plan, or (iii) would not materially increase, in the aggregate, the employee
benefit plan liabilities of the Company and the Material Company
Subsidiaries, taken as a whole;
(d) sell, lease or otherwise dispose of any of its assets (including
capital stock of Material Company Subsidiaries) or acquire any business or
assets, except in the ordinary course of business, in each case for an
amount not exceeding $1,000,000;
(e) incur any material amount of indebtedness for borrowed money or make
any loans, advances or capital contributions to, or investments (other than
non-controlling investments in the ordinary course of business) in, any
other Person other than a Subsidiary of the Company, or issue or sell any
debt securities, other than (i) borrowings in connection with acquisitions
permitted by subsection 6.2(d), (ii) borrowings under existing lines of
credit in the ordinary course of business not to exceed $5,000,000 in the
aggregate at any time outstanding and (iii) borrowings made or indebtedness
incurred to fund payments made in connection with the exercise of Options
pursuant to Section 3.1(e).
(f) except as set forth in subsection 6.2(f) of the Company Disclosure
Memorandum, authorize, commit to or make capital expenditures in each case
in an amount exceeding $6,000,000;
(g) mortgage or otherwise encumber or subject to any Lien any material
amount of properties or assets owned by the Company or any of the Material
Company Subsidiaries as of the date of this Agreement except for such of the
foregoing as are in the normal course of business;
(h) make any material change to its accounting (including tax
accounting) methods, principles or practices, except as may be required by
GAAP;
(i) amend or propose to amend its articles of incorporation or by-laws
or equivalent organizational documents;
(j) declare or pay any dividend or distribution with respect to the
Company Capital Stock;
(k) except pursuant to Options already granted as of the date of this
Agreement, issue, sell, deliver or agree to issue, sell, deliver (whether
through issuance or granting of options, warrants, commitments,
subscriptions or rights to purchase) any Company Capital Stock or split,
combine, reclassify or subdivide the Company Capital Stock;
(l) make any tax election or settle or compromise any material tax
liability for an amount greater than reflected on the Company's Financial
Statements;
(m) except pursuant to Options already granted as of the date of this
Agreement, directly or indirectly redeem, purchase or otherwise acquire any
shares of its capital stock or other securities;
(n) enter into any new lines of business or otherwise make material
changes to the operation of its business;
(o) except as to liabilities accrued on the books of the Company as of
the date of this Agreement, pay or agree to pay in settlement or compromise
of any suits or claims of liability against the Company, its directors,
officers, employees or agents, more than an aggregate of $100,000 for all
such suits and claims;
(p) enter into any agreement providing the acceleration or payment or
performance or other consequence as a result of a change in control of the
Company;
(q) purchase any radio or television stations, enter into any local
marketing arrangements, joint sales agreement or similar agreements;
(r) except as permitted under Sections 6.2(d), 6.2(e), 6.2(f) and
6.2(l), enter into any contract, agreement or understanding, whether in the
ordinary course of business or not, which would be the type
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of agreement which, if entered into prior to the date hereof, would have to
be disclosed pursuant to Section 4.11 or which would obligate the Company or
any Subsidiary to make payments of more than $150,000 per year;
(s) take any action or agree, in writing or otherwise, to take any of
the foregoing actions or any action which would make any representation or
warranty in Article 4 hereof materially untrue or incorrect; or
(t) commit to any of the foregoing.
6.3 SHAREHOLDER APPROVAL. (a) With respect to the Company, this Agreement,
the Merger, and the other transactions contemplated hereby are subject to
approval of the shareholders of the Company, and in connection therewith, the
Consenting Stockholders have entered into the Stockholders Agreement, which
requires the Consenting Stockholders to execute written consents in favor of
this Agreement and the Merger by 5:00 p.m. Eastern Standard Time on the
thirtieth day after the execution of this Agreement by the Company unless the
Agreement is terminated prior to such date.
(b) The authorization for issuance of shares of Acquiror Common Stock and
Warrants is subject to the approval of the shareholders of Acquiror and in
connection therewith, Zell/Chilmark L.P., the holder of in excess of 69% of the
outstanding Acquiror Common Stock has entered into the Jacor Shareholder
Agreement, the form of which is attached as Exhibit 6.3, pursuant to which
Zell/Chilmark L.P. has granted an irrevocable proxy to the Company solely for
the purpose of voting its shares of Acquiror Common Stock in favor of any
proposal for the authorization for issuance of such number of shares of Acquiror
Common Stock and Warrants as are necessary for payment of the Merger
Consideration.
(c) The Company and Acquiror shall each cause an information statement to be
mailed to their respective shareholders, and the Company and Acquiror shall each
furnish to the other all information concerning itself that the other may
reasonably request in connection with the preparation, filing and mailing of
such information statement.
6.4 INFORMATION STATEMENT; REGISTRATION STATEMENT. (a) As soon as
practicable following the date hereof, Acquiror and the Company shall cooperate
to prepare promptly and file with the SEC an Information Statement with respect
to the Merger (the "Information Statement") and a registration statement on Form
S-4 relating to the Warrants issuable in the Merger at the Effective Time (the
"Registration Statement"), subject, however, to deferral until such time as
Acquiror and the Company may reasonably agree in writing. As soon as practicable
following receipt of final comments from the staff of the SEC on the Information
Statement and Registration Statement (or advice that such staff will not review
such filing), Acquiror shall use its best efforts to have the Registration
Statement declared effective by the SEC and to maintain the effectiveness of
such Registration Statement until completion of the Merger. Promptly after the
effectiveness of the Registration Statement, the Company shall mail the
Information Statement to all holders of Company Common Stock and holders of
Acquiror Common Stock. Acquiror and the Company shall cooperate with each other
in the preparation of the Information Statement and the Registration Statement
and shall advise the other in writing if, at any time prior to the Effective
Time, any such party shall obtain knowledge of any facts that might make it
necessary or appropriate to amend or supplement the Information Statement or the
Registration Statement in order to make the statements contained or incorporated
by reference therein not misleading or to comply with applicable law.
Notwithstanding the foregoing, each party shall be responsible for the
information and disclosures which it makes or incorporates by reference in all
regulatory filings, the Information Statement and the Registration Statement.
(b) Acquiror shall file, no later than the third business day following the
Closing, a registration statement with the SEC relating to the issuance of
shares of Acquiror Common Stock issuable upon exercise of the Warrants ("Warrant
Shares") (such registration statement to be referred to herein as the "Warrant
Shares Registration Statement"). Acquiror shall use its reasonable best efforts
to have the Warrant Shares Registration Statement declared effective and to
cause the issuance of Warrant Shares to be registered, qualified or exempted
under applicable state securities laws as soon as is reasonably practicable.
Acquiror shall use its reasonable best efforts to amend or supplement the
Warrant Shares Registration Statement or the prospectus contained therein and to
take such actions as may be necessary to cause the Warrant Shares
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Registration Statement to remain effective until the earlier of (i) the seventh
anniversary of the Closing and (ii) the expiration or exercise of all
outstanding Warrants. Prior to the Effective Time, Acquiror will exercise its
reasonable best efforts to cause the Warrants to be included for trading in the
National Association of Securities Dealers quotation system.
6.5 NOTIFICATION. Each of the Company and Acquiror shall, after obtaining
knowledge of the occurrence, non-occurrence or threatened occurrence or
non-occurrence of any fact or event that would cause or constitute a material
breach or failure of any of the representations and warranties, covenants or
conditions set forth herein, or that would constitute or result in a Material
Adverse Effect to such party, notify the other parties in writing thereof with
reasonable promptness.
6.6 EMPLOYEE BENEFITS. (a) For a period of at least two years after the
Effective Time, Acquiror shall cause the Surviving Corporation and each Material
Company Subsidiary to maintain compensation and benefit arrangements, plans and
programs for the benefit of current, former and retired salaried employees of
the Company and such subsidiaries and their respective predecessors that are, in
the aggregate, considering all compensation and benefits, not less favorable
than those provided by Acquiror or any of its Affiliates to their similarly
situated current, former and retired salaried employees; provided, however, that
nothing in this Agreement shall preclude or restrict the Surviving Corporation
from terminating the employment of any employee.
(b) If any salaried employee of the Company or any Material Company
Subsidiary becomes a participant in any employee benefit plan, practice or
policy of Acquiror, any of its Affiliates or the Surviving Corporation, Acquiror
shall cause such employee to be given credit under such plan, practice or policy
for all service prior to the Effective Time with the Company and its
subsidiaries, or any predecessor employer, for all purposes (including
eligibility, vesting and determination of benefits) for which such service is
either taken into account or recognized.
(c) Following the Effective Time, Acquiror shall, or shall cause the
Surviving Corporation to, honor the terms of all consulting, employment,
severance and similar agreements set forth in Section 4.11 of the Company
Disclosure Memorandum that were in effect immediately prior to the date hereof.
Within sixty days after the date hereof, the Company shall offer to enter into
Employment Continuation Agreements which will be binding upon the Surviving
Corporation with each of the persons and at the compensation listed on Exhibit
6.6(c) substantially in the forms attached hereto as Exhibit 6.6(c)(i) and
Exhibit 6.6.(c)(ii).
6.7 INVESTIGATION AND CONFIDENTIALITY. Prior to the Effective Time,
Acquiror and the Company each shall keep the other advised of all material
developments relevant to the transactions contemplated hereby and may make or
cause to be made such investigation, if any, of the business and properties of
the other party and its subsidiaries and of their respective financial and legal
condition as Acquiror or the Company reasonably deems necessary or advisable to
familiarize itself and its advisors with such business, properties and other
matters; PROVIDED, HOWEVER, that such investigation shall be reasonably related
to the transactions contemplated hereby and shall not interfere unnecessarily
with normal operations. Acquiror and, except as otherwise may be required by a
Director Duty, the Company each agree to furnish the other party and the other
party's advisors with such financial and operating data and other information
with respect to its businesses, properties and employees as Acquiror or the
Company shall from time to time reasonably request. All information furnished to
the Company or Acquiror by the other party hereunder (including, without
limitation, all environmental information obtained pursuant to Section 6.13 or
otherwise) shall be maintained by such party pursuant to the terms of the
confidentiality agreement (the "Confidentiality Agreement") between the Company
and Acquiror dated February 1, 1996, which shall survive the execution of this
Agreement and remain in full force and effect until the Effective Time.
6.8 FILINGS; OTHER ACTION. Subject to the terms and conditions herein
provided, the parties shall (a) within seven business days hereof make their
respective filings and thereafter make any other required submissions under the
HSR Act and the Communications Law; (b) use their reasonable best efforts to
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cooperate with each other in (i) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
Governmental Authorities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (c) use their reasonable best efforts to take, or
cause to be taken, all other action and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement and satisfy the conditions to the
transactions contemplated hereby; PROVIDED, HOWEVER, that nothing in this
Section 6.8 shall require the Acquiror or Sub, or require the Acquiror or Sub to
cause the Surviving Corporation, to divest or hold separate any Station or
Stations, or asset or groups of assets, or enter into new arrangements or
terminate any existing arrangement, or take any other specific action requested
by any Governmental Authorities. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement, subject to the remaining provisions hereof, the officers and
directors of the parties shall promptly take all such necessary action.
6.9 INDEMNIFICATION AND INSURANCE. (a) For not less than six years
following the Effective Time, Acquiror shall indemnify and hold harmless each
present and former employee, agent, director or officer of the Company and its
Subsidiaries ("Indemnified Parties") from and against any and all claims arising
out of or in connection with activities in such capacity, or on behalf of, or at
the request of, the Company, its Subsidiaries or their Affiliates, and shall
advance expenses incurred with respect to the foregoing, as they are incurred,
to the fullest extent permitted under applicable law; PROVIDED, HOWEVER, that if
any claim or claims are asserted or made within such six-year period, all rights
to indemnification in respect of such claims shall continue until the final
disposition of any and all such claims.
(b) Acquiror shall cause the Surviving Corporation to keep in effect
provisions in the Company's Restated Articles of Incorporation and By-laws
providing for exculpation of director and officer liability and its
indemnification of or advancement of expenses to the Indemnified Parties to the
fullest extent permitted under the FBCA, which provisions shall not be amended
except as required by applicable law or except to make changes permitted by law
that would enhance the Indemnified Parties' right of indemnification or
advancement of expenses.
(c) If, after the Effective Time, Acquiror or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its property and assets to
any Person, then, in each such case, proper provision shall be made so that the
successors and assigns of Acquiror assume all of the obligations set forth in
this Section 6.9. The provisions of this Section 6.9 are intended to be for the
benefit of, and shall be enforceable by each Person who is now, or has been at
any time prior to the date of this Agreement, or who becomes prior to the
Effective Time, an officer, director, employee or agent of the Company or any of
its Subsidiaries (and their heirs and representatives).
6.10 PUBLICITY. Acquiror and the Company shall each issue press releases
relating to this Agreement. Each such release will be reviewed by the other
party and all such initial press releases shall be mutually satisfactory to the
parties. Thereafter the Company and Acquiror shall, subject to their respective
legal obligations (including requirements of national securities exchanges and
other similar regulatory bodies), consult with each other regarding the text of
any press release before issuing any such press release with respect to the
transactions contemplated hereby and in making any filings with any Governmental
Authority or with any national securities exchange with respect thereto.
6.11 TRANSFER TAXES. Acquiror shall pay any and all transfer taxes
(including, without limitation, any real estate transfer taxes) incurred in
connection with the Merger, whether such taxes are imposed on Acquiror, the
Company, their respective Subsidiaries or their shareholders.
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6.12 LETTER OF CREDIT. Simultaneously with the execution and delivery of
the consents of the Consenting Stockholders in accordance with Section 6.3, the
parties shall enter into the Letter of Credit Escrow Agreement substantially in
the form attached hereto as Exhibit 6.13 (the "Letter of Credit Escrow
Agreement"). Pursuant to the Letter of Credit Escrow Agreement, the Acquiror
will deliver or cause to be delivered to the Escrow Agent (as defined in the
Letter of Credit Escrow Agreement) an irrevocable letter of credit in the amount
of $75,000,000 to be issued by an issuer reasonably acceptable to the Company
(the "Letter of Credit"). The Letter of Credit shall be held and drawn on only
as provided in Section 8.2(b) and in the Letter of Credit Escrow Agreement.
6.13 ENVIRONMENTAL INSPECTION. Within 100 days of the date of this
Agreement, Acquiror and Sub shall have the right, at their own expense, to cause
the inspection of the properties of the Company and its subsidiaries to verify
the accuracy of the Company's representations and warranties in Section 4.16.
Any invasive testing or sampling, including, without limitation, testing of
soil, ground or surface water, at any of such properties shall be conducted only
following reasonable advance written notice to the Company and without any
unreasonable interference with the conduct of the Company's business.
6.14 ACKNOWLEDGEMENT OF CONSENTS. The Company shall promptly forward to
Acquiror a copy of all consents received from the Consenting Stockholders and
shall promptly acknowledge in writing to Acquiror that consents have been
received from the holders of a majority of the outstanding voting stock of the
Company and that accordingly the Agreement and Plan of Merger has been duly
approved pursuant to Florida law.
6.15 RULE 145 AFFILIATES. At least 40 days prior to the Closing, the
Company shall deliver to Acquiror a letter identifying all persons who are, at
the time the Consenting Stockholders approve this Agreement and the Merger,
deemed to be "affiliates" of the Company for purposes of Rule 145 under the
Securities Act (the "Rule 145 Affiliate"). The Company shall use its reasonable
best efforts to cause each Rule 145 Affiliate to deliver to Acquiror at least 30
days prior to the Closing an agreement substantially in the form of Exhibit 6.15
to this Agreement.
6.16 ACTIONS WITH RESPECT TO THE WARRANTS. If, after the date hereof and
prior to issuance of the Warrants, Acquiror shall take any action which, if the
Warrants had been issued and outstanding as of the date of any such action,
would have required an adjustment in the exercise price of the Warrants or in
the number of shares purchasable upon exercise of the Warrants, then the
exercise price of the Warrants or such number of shares shall be adjusted upon
issuance of the Warrants to give effect to the adjustment which would have been
required as a result of such action.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 CONDITIONS TO OBLIGATIONS OF THE PARTIES. The respective obligations
of the Company, Acquiror and Sub to effect the Merger shall be subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) This Agreement and the transactions contemplated hereby shall have
been approved in the manner required by applicable law by the holders of a
majority of the Company Common Stock as required by the Stockholders
Agreement and by the holders of Acquiror Common Stock as required by the
By-Laws of the National Association of Securities Dealers.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any order or
injunction of a court or Governmental Authority of competent jurisdiction
that prohibits the consummation of the transactions contemplated by this
Agreement. In the event any such order or injunction shall have been issued,
each party agrees to use its reasonable best efforts to have any such order
overturned or injunction lifted.
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(d) All orders, approvals, and consents of the FCC required in
connection with the consummation of the transactions contemplated hereby
shall have been obtained or granted, whether or not any appeal or request
for reconsideration of such order is pending, or whether the time for filing
any such appeal or request for reconsideration or for any sua sponte action
by the FCC has expired.
(e) All consents, authorizations, orders and approvals of (or filings or
registrations with) any Governmental Authority (other than the FCC) required
in connection with the execution, delivery and performance of this Agreement
shall have been obtained or made, except for filings in connection with the
Merger and any other documents required to be filed after the Effective Time
and except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a
Material Adverse Effect on the Surviving Corporation following the Effective
Time.
(f) The Registration Statement shall have become effective in accordance
with the provisions of the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued by the
SEC and remain in effect.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to effect the Merger shall be subject to the satisfaction or waiver at
or prior to the Closing of each of the following additional conditions:
(a) The representations and warranties of Acquiror and Sub set forth in
this Agreement shall be true and correct in all respects as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (except for any such representations and warranties made as
of specified date, which shall be true and correct in all respects as of
such date), except to the extent that the aggregate effect of the
inaccuracies in such representations and warranties as of the applicable
times (each considered without any exclusions for lack of Material Adverse
Effect set forth in the individual representation or warranty) does not
constitute a Material Adverse Effect on Acquiror when compared to the state
of facts which would exist if all such representations and warranties were
true in all respects as of the applicable times.
(b) Each of the agreements and covenants of Acquiror and Sub to be
performed and complied with by Acquiror and Sub pursuant to this Agreement
prior to the Effective Time shall have been duly performed and complied with
in all material respects.
(c) Acquiror shall have delivered to the Company a certificate, dated as
of the Closing Date and signed on its behalf by its chief executive officer
and its chief financial officer, as to the satisfaction by it of the
conditions set forth in subsections 7.2(a) and 7.2(b).
7.3 CONDITIONS TO OBLIGATIONS OF ACQUIROR AND SUB. The obligations of
Acquiror and Sub to effect the Merger shall be subject to the satisfaction or
waiver at or prior to the Closing of the following conditions:
(a) The representations and warranties of the Company set forth in this
Agreement shall be true and correct in all respects as of the date of this
Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the Effective
Time (except for (i) any such representations and warranties made as of
specified date, which shall be true and correct in all respects as of such
date) and (ii) the representations and warranties in Section 4.16, the
accuracy of which shall be tested pursuant to Section 8.1(i) and therefore
shall not be a condition to the obligations of Acquiror and Sub to effect
the Merger), except to the extent that the aggregate effect of the
inaccuracies in such representations and warranties as of the applicable
times (each considered without any exclusions for lack of Material Adverse
Effect set forth in the individual representation or warranty) does not
constitute a Material Adverse Effect on the Company when compared to the
state of facts which would exist if all such representations and warranties
were true in all respects as of the applicable times.
(b) Each of the agreements and covenants of the Company to be performed
and complied with by the Company pursuant to this Agreement prior to the
Effective Time shall have been duly performed and complied with except to
the extent that the aggregate effect of any non-performance or noncompliance
by the Company (each considered without any exclusions for lack of Material
Adverse Effect set
A-I-22
<PAGE>
forth in the individual covenant or agreement) does not constitute a
Material Adverse Effect on the Company when compared to the state of facts
which would exist if all such agreements and covenants had been performed
and complied with by the Company.
(c) From the date of this Agreement through June 30, 1996, the Cash Flow
(as defined in Section 7.3 of the Company Disclosure Memorandum) of the
Company shall have been at least 90% of that projected in the forecast set
forth in Section 7.3 of the Company Disclosure Memorandum (the "Forecast"),
and from July 1, 1996 through September 30, 1996 (or through the end of the
month preceding the month in which the Closing occurs if the Closing occurs
after August 1, 1996, but earlier than September 30, 1996), the Cash Flow of
the Company shall have been at least 75% of that projected in the Forecast.
(d) The Company shall have delivered to Acquiror a certificate, dated as
of the Closing Date and signed on its behalf by its chief executive officer
and its chief financial officer, as to the satisfaction by it of the
conditions set forth in subsections 7.3(a), 7.3(b) and 7.3(c).
ARTICLE 8
TERMINATION OF AGREEMENT
8.1 TERMINATION. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated at any time prior to the Effective Time:
(a) by mutual written consent of the Company and Acquiror;
(b) by the Company or Acquiror, upon written notice to the other party,
if the Merger shall not have been consummated on or prior to May 31, 1997
(the "Outside Date"), unless such failure of consummation shall be due to
the failure of the party seeking such termination to perform or observe in
all material respects the covenants and agreements hereof to be performed or
observed by such party;
(c) by the Company or Acquiror, upon written notice to the other party,
if a Governmental Authority of competent jurisdiction shall have issued an
injunction, order or decree enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement, and such
injunction, order or decree shall have become final and non-appealable or if
a Governmental Authority has otherwise made a final determination that any
required Regulatory Authorization would not be forthcoming; PROVIDED,
HOWEVER, that the party seeking to terminate this Agreement pursuant to this
clause has used all required efforts as specified in Section 6.8 to remove
such injunction, order or decree;
(d) by the Company or Acquiror, if any condition to such party's
obligations to consummate the transactions contemplated hereby is incapable
of being satisfied on or prior to the Outside Date; PROVIDED, HOWEVER, that
(i) the terminating party has not breached the terms of this Agreement; (ii)
if the Company is the terminating party, the Consenting Stockholders have
not breached the terms of the Stockholders Agreement; and (iii) if Acquiror
is the terminating party, Zell/Chilmark Fund L.P. has not breached the terms
of the Jacor Shareholders Agreement, in each case in any manner that
proximately contributes to the failure to consummate the Merger by the
Outside Date;
(e) by the Company or Acquiror, if the FCC shall have issued an order or
ruling or taken other action denying approval of the transactions
contemplated by this Agreement, and such order, ruling or other action shall
have become final and non-appealable; PROVIDED, HOWEVER, that the party
seeking to terminate this Agreement pursuant to this clause has used all
required efforts as specified in Section 6.8 to obtain such FCC approval;
(f) by the Company, if prior to the delivery of the consents of the
Consenting Stockholders delivered pursuant to the Stockholder Agreement, the
Board of Directors of the Company determines in accordance with a Director
Duty that such termination is required by reason of a Competing Transaction
being proposed;
A-I-23
<PAGE>
(g) by the Company or Acquiror, if prior to the delivery of the consents
of the Consenting Stockholders delivered pursuant to the Stockholders
Agreement, the Board of Directors of the Company shall have withdrawn or
modified in a manner materially adverse to Acquiror its approval of the
adoption of this Agreement or the approval of the Merger, because the Board
of Directors has determined to recommend to the Company's shareholders or
approve a Competing Transaction, in accordance with a Director Duty;
(h) by Acquiror, if any Consenting Stockholder shall have breached any
material representation or warranty, or failed to perform any covenant or
duty contained in, the Stockholders Agreement, other than a breach or
noncompliance that would not materially affect the benefits Acquiror is
receiving from the Stockholders Agreement;
(i) by Acquiror, within 100 days of the date of this Agreement, if
Acquiror reasonably believes, on the basis of the inspection conducted
pursuant to Section 6.13, that the Company's representations and warranties
in Section 4.16 are not true and correct both as of the date of this
Agreement and at all times within 100 days after the date of this Agreement;
(j) by Acquiror, within 20 days of the date of this Agreement, if (i)
the termination, if any, of any of the Undisclosed Contracts because of the
consummation of the Merger would constitute a Material Adverse Effect on the
Company or (ii) any or all of the Undisclosed Contracts constitute a
Material Adverse Effect on the Company when compared to the state of facts
which would exist if the Company were not a party to any or all of the
Undisclosed Contracts; or
(k) by the Company if (i) Zell/Chilmark Fund L.P. shall have breached
any material representation or warranty, or failed to perform any covenant
or duty contained in, the Jacor Shareholders Agreement, other than a breach
or noncompliance that would not materially affect the benefits the Company
is receiving from the Jacor Shareholders Agreement, or (ii) in the event
that all required authorizations of the shareholders of Acquiror to effect
the transactions contemplated by this Agreement shall not be obtained.
8.2 EFFECT OF TERMINATION. (a) In the event that (i) this Agreement is
terminated pursuant to clause 8.1(f), clause 8.1(g), or clause 8.1(h) and (ii)
at the time of termination, there has been no misrepresentation by or breach of
any obligation of Acquiror or Sub under this Agreement other than a breach of or
noncompliance with any obligation which would not constitute a Material Adverse
Effect on Acquiror, then the Company shall pay the Acquiror a fee of
$20,000,000, which amount shall be payable by wire transfer of same day funds
within two business days after the date this Agreement is terminated. Such
amount shall be in addition to the amounts payable by certain of the Consenting
Stockholders to the Acquiror pursuant to the Stockholders Agreement.
(b) If after the execution of the Letter of Credit Escrow Agreement and the
issuance of the Letter of Credit this Agreement is terminated: (i) pursuant to
Section 8.1(b), except if there has been a failure to satisfy any of the
conditions specified in Section 7.3; (ii) pursuant to Section 8.1(c); (iii) by
the Company, pursuant to Section 8.1(d); (iv) pursuant to Section 8.1(e); or (v)
pursuant to Section 8.1(k), then the Company shall be permitted to draw on the
Letter of Credit. The Company shall not be permitted to draw on the Letter of
Credit under any other circumstances. The obligations of the parties to this
Agreement under the last sentence of Section 6.7 and under Sections 8.2 and 9.1
shall survive any termination of this Agreement.
(c) From and after the execution of the Letter of Credit Escrow Agreement
and the issuance of the Letter of Credit and except as set forth in Section
8.2(d), the right to terminate this Agreement and receive $75 million pursuant
to a draw on the Letter of Credit under the circumstances permitted in Sections
8.1 and 8.2(b) shall be the Company's exclusive remedy and $75 million shall be
the maximum measure of damages for any claim the Company might have against
Acquiror or its Affiliates in connection with the transactions contemplated by
this Agreement, including without limitation, any claim for breach or
nonperformance of this Agreement or any tort claim.
(d) If (i) the Merger has not been consummated, (ii) this Agreement has not
been terminated by the Company, (iii) the Letter of Credit Escrow Agreement has
been executed and the Letter of Credit has been
A-I-24
<PAGE>
issued, and (iv) the Company believes that Acquiror has wilfully breached this
Agreement, the Company may choose to irrevocably waive the right to draw on the
Letter of Credit and instead bring an action against Acquiror or its Affiliates
for such alleged wilful breach of this Agreement (a "Letter of Credit Waiver").
A Letter of Credit Waiver must be made in writing and delivered by the Company
to Acquiror and the Escrow Agent (as defined in the Letter of Credit Escrow
Agreement). If the Company makes a Letter of Credit Waiver, the Company and the
Acquiror will take all necessary steps to cancel the Letter of Credit.
(e) Prior to the execution of the Letter of Credit Escrow Agreement and the
issuance of the Letter of Credit, the Company's sole remedies in connection with
the transactions contemplated in this Agreement shall be to terminate this
Agreement (if permitted under Section 8.1) and/or bring an action against
Acquiror or its Affiliates for wilful breach of this Agreement if the Company
believes that Acquiror has wilfully breached this Agreement; PROVIDED, HOWEVER,
that the bringing of such an action shall not affect Acquiror's right to
immediately receive any fee it is entitled to under Section 8.2(a) and that if
such a lawsuit is brought or the Company exercises such a right of termination,
the Letter of Credit Escrow Agreement shall not be executed and the Letter of
Credit shall not be issued.
ARTICLE 9
MISCELLANEOUS AND GENERAL
9.1 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein and except that (a) the filing fee in connection with
the HSR Act filing, (b) the filing fee in connection with the filing of the
Information Statement with the SEC, (c) the filing fees in connection with
necessary applications to the FCC, and (d) the expenses incurred in connection
with printing and mailing the Information Statement shall be shared equally by
the Company and Acquiror.
9.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by any party hereto without the prior
written consent of the other parties hereto, provided however that Acquiror may
assign its rights under this Agreement to an Affiliate at any time and to a
non-Affiliate if the Acquiror, in its sole discretion, determines that it is
appropriate to do so because of difficulties encountered in satisfying the
conditions in Article 7 of this Agreement. Any such assignment shall not affect
Acquiror's liability hereunder.
9.3 THIRD PARTY BENEFICIARIES. Except as set forth in Article 3 and
Sections 6.4(b), 6.6 and 6.9 (all of which shall inure to the benefit of the
persons or entities benefitting from the provisions thereof, which persons are
intended to be third party beneficiaries thereof), each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person other than the parties hereto.
9.4 NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be sufficient if in writing, and sent by
facsimile transmission (electronically confirmed), delivered in Person, mailed
by first class registered or certified mail, postage prepaid, or sent by Federal
Express or other overnight courier of national reputation, addressed as follows:
If to Acquiror or Sub:
Randy Michaels
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-0090
A-I-25
<PAGE>
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
AND
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
If to the Company:
Citicasters Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Facsimile: (513) 562-8075
with a copy to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn: Lyle G. Ganske, Esq.
Facsimile: (216) 579-0212
or to such other address with respect to a party as such party shall notify the
other parties in writing as above provided.
9.5 COMPLETE AGREEMENT. This Agreement, the Company Disclosure Memorandum,
the Acquiror Disclosure Memorandum and the other documents and agreements
delivered by the parties in connection herewith, together with the
Confidentiality Agreement, contain the complete agreement among the parties
hereto with respect to the Merger and the other transactions contemplated hereby
and thereby and supersede all prior agreements and understandings among the
parties hereto with respect thereto.
9.6 CAPTIONS; REFERENCES. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement. When a
reference is made in this Agreement to a clause, a Section, a subsection or an
Article, such reference shall be to such clause, Section, subsection or Article
of this Agreement unless otherwise indicated.
9.7 AMENDMENT. At any time, the parties hereto, by action taken by their
respective Board of Directors or pursuant to authority delegated by their
respective Boards of Directors, may amend this Agreement; PROVIDED, HOWEVER,
that no amendment after approval by the shareholders of the Company shall be
made that changes in a manner adverse to such shareholders the Merger
Consideration without the further approval of such shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
9.8 WAIVER. At any time prior to the Effective Time, the parties hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto, or
(c) waive compliance with any of the agreements or conditions contained herein,
to the extent permitted by applicable law. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
writing signed on behalf of such party.
A-I-26
<PAGE>
9.9 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida, without regard to
its rules of conflict of laws.
9.10 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Except as
set forth in this Section 9.10, no representation, warranty or covenant
contained in this Agreement shall survive the Merger or, except as set forth in
Section 8.2, the earlier termination of this Agreement. The obligations set
forth in Article 3 and Sections 6.4(b), 6.6, 6.9 and 6.11 shall survive the
Merger.
9.11 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.12 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
9.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
CITICASTERS INC.
By: /s/ JOHN P. ZANOTTI
--------------------------------------
Its: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
--------------------------------------
JACOR COMMUNICATIONS, INC.
By: /s/ RANDY MICHAELS
--------------------------------------
Its: PRESIDENT AND CO-CHIEF
OPERATING OFFICER
--------------------------------------
JCAC, INC.
By: /s/ RANDY MICHAELS
--------------------------------------
Its: PRESIDENT AND CO-CHIEF
OPERATING OFFICER
--------------------------------------
A-I-27
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Acquiror................................................................................................... 1
Acquiror Common Stock...................................................................................... 13
Acquiror Disclosure Memorandum............................................................................. 12
Acquiror Financial Statements.............................................................................. 14
Acquiror Reports........................................................................................... 14
Acquiror's Knowledge....................................................................................... 13
Affiliate.................................................................................................. 15
Agreement.................................................................................................. 1
Articles of Merger......................................................................................... 2
Benefit Plans.............................................................................................. 9
Cash Consideration......................................................................................... 2
Certificates............................................................................................... 2
Class B Shares............................................................................................. 5
Closing.................................................................................................... 1
Closing Date............................................................................................... 1
Code....................................................................................................... 6
Communications Law......................................................................................... 6
Company.................................................................................................... 1
Company Capital Stock...................................................................................... 5
Company Common Stock....................................................................................... 2
Company Contracts.......................................................................................... 10
Company Disclosure Memorandum.............................................................................. 4
Company Financial Advisor.................................................................................. 11
Company Financial Statements............................................................................... 7
Company Preferred Shares................................................................................... 5
Company Properties......................................................................................... 11
Company Reports............................................................................................ 6
Company's Knowledge........................................................................................ 7
Competing Transaction...................................................................................... 16
Confidentiality Agreement.................................................................................. 19
Consenting Stockholders.................................................................................... 1
Director Duty.............................................................................................. 16
Effective Time............................................................................................. 2
Employee pension benefit plan.............................................................................. 9
Employee welfare benefit plan.............................................................................. 9
Equity Rights.............................................................................................. 5
ERISA...................................................................................................... 9
Exchange Act............................................................................................... 7
Exchange Agent............................................................................................. 3
FBCA....................................................................................................... 1
FCC........................................................................................................ 6
Funds...................................................................................................... 3
GAAP....................................................................................................... 7
Governmental Authority..................................................................................... 6
HSR Act.................................................................................................... 6
Indemnified Parties........................................................................................ 20
Information Statement...................................................................................... 18
Letter of Credit........................................................................................... 21
Letter of Credit Escrow Agreement.......................................................................... 21
</TABLE>
A-I-28
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
Liens...................................................................................................... 8
<S> <C>
Material Adverse Effect.................................................................................... 4
Material Company Subsidiaries.............................................................................. 5
Merger..................................................................................................... 1
Merger Consideration....................................................................................... 3
Multiemployer plan......................................................................................... 9
Multiemployer plans........................................................................................ 9
Option..................................................................................................... 3
Outside Date............................................................................................... 23
Person..................................................................................................... 15
Plan....................................................................................................... 9
Plans...................................................................................................... 9
Registration Statement..................................................................................... 18
Retirement Plans........................................................................................... 9
Rule 145 Affiliates........................................................................................ 21
SEC........................................................................................................ 6
Securities Act............................................................................................. 7
SFB Plans.................................................................................................. 9
Station Licenses........................................................................................... 8
Stations................................................................................................... 8
Stock Option Plans......................................................................................... 3
Stockholders Agreement..................................................................................... 1
Sub........................................................................................................ 1
Subsidiary................................................................................................. 6
Surviving Corporation...................................................................................... 1
Undisclosed Contracts...................................................................................... 10
Warrant.................................................................................................... 2
Warrant Consideration...................................................................................... 2
Warrant Shares............................................................................................. 18
Warrant Shares Registration Statement...................................................................... 18
</TABLE>
A-I-29
<PAGE>
ANNEX II
JACOR SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of February 12, 1996, is among
Citicasters Inc., a Florida corporation ("Citicasters"), and the Zell/Chilmark
Fund L.P., a Delaware limited partnership ("ZCF").
WHEREAS, Jacor Communications, Inc., an Ohio corporation (the "Company"),
JCAC, Inc., a Florida corporation ("Acquisition") and Citicasters are,
concurrently with the execution of this Agreement, entering into an Agreement
and Plan of Merger (the "Merger Agreement"), which provides, among other things,
upon the terms and subject to the conditions thereof, that Acquisition will be
merged with and into Citicasters in accordance with the Florida Business
Corporation Act (the "Merger") such that each share of Class A Common Stock, par
value $.01 per share, of Citicasters (the "Shares") issued and outstanding
immediately prior to the effective time of the Merger (other than Shares owned
by Citicasters, the Company, Acquisition or any direct or indirect subsidiary of
Citicasters, the Company or Acquisition, and any Shares held in the treasury of
the Company) will be converted into the right to receive the Merger
Consideration (as defined in the Merger Agreement);
WHEREAS, ZCF owns in excess of 69.0% of the outstanding shares (the "ZCF
Shares") of the Company's common stock, without par value ("Common Stock"); and
WHEREAS, in order to induce Citicasters to enter into the Merger Agreement,
ZCF has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, ZCF
and Citicasters hereby agree as follows.
Section 1. REPRESENTATIONS AND WARRANTIES OF ZCF. ZCF represents and
warrants to Citicasters as follows:
(a) ZCF is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) ZCF has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by ZCF and no other proceedings on the part of ZCF are
necessary to authorize this Agreement or to consummate the transactions so
contemplated.
(d) This Agreement has been duly and validly executed and delivered by
ZCF and constitutes a legal, valid and binding agreement of ZCF enforceable
against ZCF in accordance with its terms, except that the enforceability
hereof may be subject to applicable bankruptcy, insolvency or other similar
laws now or hereinafter in effect, affecting creditors' rights generally.
(e) For so long as this Agreement is in effect, ZCF hereby grants
Citicasters an irrevocable proxy and irrevocably appoints Citicasters or its
designees, with full power of substitution, its attorney and proxy to vote
all the ZCF Shares, and any shares of Common Stock hereafter acquired by
ZCF, at any meeting of the shareholders of the Company, however called, in
favor of any proposal to approve for issuance shares of Common Stock and
warrants to purchase shares of Common Stock, in each case, in an amount
necessary for the payment of the Merger Consideration pursuant to the Merger
Agreement, and if required, the adoption of the Merger Agreement and the
approval of the Merger. This Agreement does not grant to Citicasters or its
designees any right to vote on any other matters which may be presented to
the Company's shareholders at such meeting. The proxy granted hereby shall
be deemed to be a proxy coupled with an interest for purposes of Section
1701.48(D) of the Ohio Revised Code.
A-II-1
<PAGE>
(f) For so long as this Agreement is in effect, in any meeting of the
stockholders of the Company, however called, ZCF shall vote or cause to be
voted all of the ZCF Shares, and any shares of Common Stock hereafter
acquired by ZCF, in favor of any proposal to approve for issuance shares of
Common Stock and warrants to purchase shares of Common Stock, in each case,
in an amount necessary for the payment of the Merger Consideration pursuant
to the Merger Agreement.
(g) As of the date of this Agreement, ZCF is the beneficial owner of at
least 69.0% of the outstanding shares of Common Stock.
Section 2. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 3. EXPENSES. Each party shall bear its own expenses and costs in
connection with this Agreement and the transactions contemplated hereby.
Section 4. AMENDMENT; ASSIGNMENT. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto. No party may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party.
Section 5. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 6. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
(a) If to ZCF, to:
David J. Rosen
Zell/Chilmark Fund L.P.
Two North Riverside Plaza
Suite 1900
Chicago, Illinois 60606
Facsimile: (312) 902-1573
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
AND
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
A-II-2
<PAGE>
(b) If to Citicasters, to:
Samuel J. Simon, Esq.
Citicasters Inc.
Suite 600
One East Fourth Street
Cincinnati, Ohio 45202
Facsimile: (513) 562-8075
with a copy to:
James C. Kennedy, Esq.
American Financial Group, Inc.
One East Fourth Street
Suite 919
Cincinnati, Ohio 45202
Facsimile: (513) 579-2113
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 7. REASONABLE BEST EFFORTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement.
Section 8. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio, without regard to the
principles of conflicts of law thereof.
Section 9. TERMINATION. This Agreement shall terminate upon the earlier to
occur of the consummation of the Merger or the termination of the Merger
Agreement without the consummation of the Merger. No such termination shall
relieve any party from liability for any breach of this Agreement.
Section 10. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity and enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid and unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 11. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
Section 12. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
A-II-3
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
ZELL/CHILMARK FUND L.P.
By: ZC, Inc.
By: /S/ SHELI Z. ROSENBERG
-----------------------------------
Name: Sheli Z. Rosenberg
Title: Vice President
CITICASTERS INC.
By: /S/ JOHN P. ZANOTTI
-----------------------------------
Name: John P. Zanotti
Title: President and Chief
Executive Officer
A-II-4
<PAGE>
ANNEX III
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT, dated as of February 12, 1996, is among JACOR
COMMUNICATIONS, INC., an Ohio corporation ("Parent"), JCAC, INC., a Florida
corporation and a wholly owned subsidiary of Parent ("Acquisition"), GREAT
AMERICAN INSURANCE COMPANY, an Ohio corporation ("Seller A"), AMERICAN FINANCIAL
CORPORATION, an Ohio corporation ("Seller B"), AMERICAN FINANCIAL ENTERPRISES,
INC., a Connecticut corporation ("Seller C"), CARL H. LINDNER ("Seller D"), THE
CARL H. LINDNER FOUNDATION, a charitable foundation ("Seller E") and S. CRAIG
LINDNER ("Seller F"). Seller A, Seller B, Seller C, Seller D, Seller E and
Seller F are sometimes individually referred to herein as a "Seller" and are
sometimes collectively referred to herein as the "Sellers".
WHEREAS, Parent, Acquisition, and Citicasters Inc., a Florida corporation
(the "Company"), are, concurrently with the execution of this Agreement,
entering into an Agreement and Plan of Merger (the "Merger Agreement"), which
provides, among other things, upon the terms and subject to the conditions
thereof, that Acquisition will be merged with and into the Company in accordance
with the Florida Business Corporation Act (the "Merger") such that each share of
Class A Common Stock, par value $.01 per share, of the Company (the "Shares")
issued and outstanding immediately prior to the effective time of the Merger
(other than Shares owned by the Company, Parent, Acquisition or any direct or
indirect subsidiary of the Company, Parent or Acquisition, and any Shares held
in the treasury of the Company) will be converted into the right to receive the
Merger Consideration (as defined in the Merger Agreement);
WHEREAS, each Seller owns the number of Shares (the "Seller's Shares") set
forth on Schedule A hereto opposite the name of such Seller; and
WHEREAS, in order to induce Parent and Acquisition to enter into the Merger
Agreement, each Seller has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Acquisition and the Sellers hereby agree as follows.
Section 1. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller
represents and warrants to Parent and Acquisition as follows:
(a) Each of Seller A, Seller B and Seller C is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Each of Seller A, Seller B, Seller C and Seller E has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of Seller A, Seller B,
Seller C and Seller E and no other proceedings on the part of any of Seller
A, Seller B, Seller C or Seller E are necessary to authorize this Agreement
or to consummate the transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered by
each Seller and constitutes a legal, valid and binding agreement of each
Seller enforceable against each Seller in accordance with its terms, except
that the enforceability hereof may be subject to applicable bankruptcy,
insolvency or other similar laws now or hereinafter in effect affecting
creditors' rights generally.
(e) The execution, delivery and performance by the Sellers of this
Agreement and the consummation of the transactions contemplated hereby do
not and will not (i) contravene or conflict with the Certificate of
Incorporation or By-Laws of any of Seller A, Seller B or Seller C or any
organizational or
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governing documents of Seller E; (ii) contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to any Seller, any of
their respective subsidiaries or any of their respective properties; (iii)
conflict with, or result in the breach or termination of any provision of or
constitute a default (with or without the giving of notice or the lapse of
time or both) under, or give rise to any right of termination, cancellation,
or loss of any benefit to which any Seller or any of its subsidiaries is
entitled under any provision of any agreement, contract, license or other
instrument binding upon such Seller, any of its subsidiaries or any of their
respective properties, or allow the acceleration of the performance of, any
obligation of any Seller or any of its subsidiaries under any indenture,
mortgage, deed of trust, lease, license, contract, instrument or other
agreement to which such Seller or any of its subsidiaries is a party or by
which any Seller or any of its subsidiaries or any of their respective
assets or properties is subject or bound; or (iv) result in the creation or
imposition of any security interests, liens, claims, pledges, charges,
voting agreements or other encumbrances of any nature whatsoever
(collectively, "Liens") on any asset of any Seller or any of its
subsidiaries, except in the case of clauses (ii), (iii) and (iv) for any
such contraventions, conflicts, violations, breaches, terminations,
defaults, cancellations, losses, accelerations and Liens which would not
individually or in the aggregate materially interfere with the consummation
of the transactions contemplated by this Agreement.
(f) As of the date hereof, none of the Sellers and none of their
respective properties is subject to any order, writ, judgment, injunction,
decree, determination or award which would prevent or delay the consummation
of the transactions contemplated hereby.
(g) Each Seller has, and at all times between the date of this Agreement
and the consummation of the Merger such Seller will have, (i) good and valid
title to such Seller's Shares, free and clear of any Liens and (ii) the
right to vote such Seller's Shares.
(h) There are no options or rights to acquire, or any agreements to
which any Seller is a party relating to, any Seller's Shares, other than
this Agreement.
(i) The Seller's Shares described in Schedule A represent all of the
Shares beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) by any of the Sellers.
Section 2. REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION. Each
of Parent and Acquisition represents and warrants to the Sellers as follows:
(a) Each of Parent and Acquisition is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation.
(b) Each of Parent and Acquisition has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of Parent and
Acquisition and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered by
each of Parent and Acquisition and constitutes a legal, valid and binding
agreement of each of Parent and Acquisition enforceable against each of
Parent and Acquisition in accordance with its terms, except that the
enforceability hereof may be subject to applicable bankruptcy, insolvency,
or other similar laws, now or hereinafter in effect affecting creditors'
rights generally.
Section 3. NEGATIVE COVENANTS OF SELLERS. Except as provided for herein or
in the Merger Agreement, each Seller agrees not to (either directly or
indirectly):
(a) sell, transfer, pledge, assign, hypothecate or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, assignment,
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hypothecation or other disposition of such Seller's Shares (including,
without limitation, through the disposition or transfer of control of
another person) other than to an affiliate of Seller D that agrees to be
bound by this Agreement;
(b) grant any proxies with respect to such Seller's Shares, deposit such
Seller's Shares into a voting trust or enter into a voting agreement with
respect to any of such Seller's Shares; or
(c) take any action which would make any representation or warranty of
any Seller herein untrue or incorrect in any material respect.
Section 4. NO SOLICITATION. (a) From and after the date of this Agreement
and except as set forth in subsection 4.(b), the Sellers shall not, and the
Sellers shall use their reasonable best efforts to cause the Company not to,
directly or indirectly, (i) solicit, initiate, knowingly encourage, or
participate in discussions or negotiations regarding, any proposals or offers
from any individual, corporation, partnership, limited liability corporation,
joint venture, trust, association, unincorporated organization, other entity,
group or governmental authority ("Person") relating to any Competing Transaction
(as defined in subsection 4.(c)) or (ii) furnish to any other Person any
nonpublic information or access to such information with respect to, or
otherwise concerning, any Competing Transaction. The Sellers shall immediately
cease and cause to be terminated any existing discussions or negotiations with
any third parties conducted heretofore with respect to any proposed Competing
Transaction. The Sellers shall promptly disclose to Parent the identity of any
Person who attempts to initiate any discussions contemplating a Competing
Transaction.
(b) Notwithstanding anything to the contrary contained in this Section 4 or
in any other provision of this Agreement, until the consents required by Section
5 have been duly executed and delivered, the Sellers shall not be required to
cause the Company to refrain from (i) participating in discussions or
negotiations with, and, during such period, furnishing information to, a Person
that seeks to engage in discussions or negotiations, requests information or
makes a proposal to acquire the Company pursuant to a Competing Transaction, if
the Company's directors have determined in good faith that such action is
required for the discharge of their fiduciary obligations, based upon the
written advice of independent legal counsel, who may be the Company's regularly
engaged legal counsel (a "Director Duty"); or (ii) terminating this Agreement
and entering into an agreement providing for a Competing Transaction in
accordance with a Director Duty. In the event that the Sellers participate
(directly or indirectly) in discussions or negotiations with, or furnish
information to, a Person that seeks to engage in such discussions or
negotiations, requests information or makes a proposal to acquire the Company
pursuant to a Competing Transaction pursuant to this subsection 4.(b), then: (i)
the Sellers shall immediately disclose to Parent the decision of the Company's
directors; (ii) the identity of the Person; and (iii) copies of all information
or material not previously furnished to Parent or Acquisition which the Sellers,
the Company, or their respective agents provides or causes to be provided to
such Person or any of its officers, directors, employees, agents, advisors or
representatives.
(c) For the purposes of this Agreement, "Competing Transaction" shall mean
any of the following involving the Company: (i) any merger, consolidation, share
exchange, business combination or other similar transaction; (ii) any sale,
lease, exchange, transfer or other disposition of all or substantially all of
the assets of the Company and its subsidiaries, taken as a whole, in a single
transaction or series of related transactions; or (iii) any tender offer or
exchange offer for Shares.
Section 5. WRITTEN CONSENT. (a) Prior to the close of business on the
thirtieth day following the date of this Agreement (the "Delivery Date"), unless
the Merger Agreement has been terminated on or prior to the Delivery Date, each
Seller will execute and deliver to the corporate secretary of the Company a
written consent with respect to such Seller's Shares in the form attached hereto
as Exhibit A, which written consent will not be withdrawn or revoked. Such
written consents of the Sellers will constitute the irrevocable written consent
of each of the Sellers with respect to his or its Seller's Shares to the
approval and adoption of the Merger Agreement.
(b) For so long as this Agreement is in effect, in any meeting of the
stockholders of the Company, however called, and in any action by consent of the
stockholders of the Company, each Seller shall vote or
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cause to be voted all of such Seller's Shares: (i) against any action or
agreement that would result in a breach in any material respect of any covenant,
representation or warranty or other obligation of any Seller under this
Agreement or of the Company, Parent or Acquisition under the Merger Agreement;
(ii) against any action or agreement that would impede, interfere with or
discourage the transactions contemplated by this Agreement or the Merger
Agreement, including, without limitation: (1) any extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries, (2) a sale or transfer of a material amount
of assets of the Company, or any of its subsidiaries or the issuance of
securities by the Company or any of its subsidiaries, (3) any change in the
board of directors of the Company, (4) any change in the present capitalization
or dividend policy of the Company (other than as contemplated by the Merger
Agreement) or (5) any other material change in the Company's corporate structure
or business; and (iii) in favor of any action or agreement that would further
the consummation of the transactions contemplated by this Agreement or the
Merger Agreement.
Section 6. REGISTRATION AGREEMENT. Prior to the closing of the Merger, the
parties will enter into an agreement providing for shelf registration of resale
of the Warrants and the Warrant Shares (each as defined in the Merger Agreement)
with terms and conditions customary for transactions that are similar to the
Merger.
Section 7. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 8. EXPENSES. Each party shall bear its own expenses and costs in
connection with this Agreement and the transactions contemplated hereby.
Section 9. AMENDMENT; ASSIGNMENT. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall be assignable by the parties hereto; PROVIDED,
HOWEVER, that this Agreement shall not be assignable by any Seller without the
prior written consent of Parent other than to an affiliate of Seller D that
agrees to be bound by this Agreement. No assignment hereunder will relieve any
party to this Agreement of its obligations hereunder.
Section 10. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 11. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
(a) If to Parent or Acquisition, to:
Randy Michaels
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-0090
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
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and
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
(b) If to the Sellers, to:
James C. Kennedy, Esq.
American Financial Group, Inc.
One East Fourth Street
Suite 919
Cincinnati, Ohio 45202
Facsimile: (513) 579-2113
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 12. REASONABLE BEST EFFORTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement.
Section 13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Florida, without regard to
the principles of conflicts of law thereof.
Section 14. TERMINATION. (a) This Agreement shall terminate upon
termination of the Merger Agreement without the consummation of the Merger. No
such termination shall relieve any party from liability for any breach of this
Agreement.
(b) If (i) the Merger Agreement is terminated pursuant to Sections 8.1(f),
8.1(g) or 8.1(h) of that Agreement and (ii) a transaction is consummated within
eighteen months after the termination of the Merger Agreement that results (1)
in the sale, exchange, conversion or other disposition (by merger or otherwise)
of some or all of the Shares owned by Seller D or Seller F (2) a payment (by
dividend or otherwise) to Seller D or Seller F following a sale of all or
substantially all of the assets of the Company, a recapitalization, a
restructuring or other similar event (in the case of (1) or (2), an "Other
Transaction"), Seller D and Seller F shall, immediately after the consummation
of the Other Transaction, pay to Parent a sum (the "Compensating Payment") equal
to the number of Shares sold, exchanged, converted, or otherwise disposed or
with respect to which Seller D or Seller F received a payment, in the Other
Transaction multiplied by one half of the Per Share Difference. The Per Share
Difference shall equal (x) the fair market value, valued as of the time the
Other Transaction is consummated, of the consideration per Share received by
Seller D or Seller F in the Other Transaction less (y) the expected fair market
value per Share, valued as of December 1, 1996, that Seller D or Seller F would
have received in the Merger. If Seller D, Seller F and Parent cannot agree on
the amount of the Compensating Payment, Seller D and Seller F shall pay Parent
immediately a sum equal to what Seller D and Seller F believe the Compensating
Payment to be (the "Immediate Payment") plus interest at 9% per year on the
Immediate Payment for the period between the time the Other Transaction is
consummated and the time the Immediate Payment is made, and the final amount of
the Compensating Payment shall be determined in accordance with the commercial
arbitration rules of the American Arbitration Association by an arbitrator or
arbitrators appointed in accordance with such rules. Such arbitration shall take
place in Cincinnati, Ohio, and judgment upon any award rendered in such
arbitration may be entered in any court of appropriate jurisdiction; the parties
hereto consent to the entry of such judgment and agree that no appeal shall be
taken therefrom. Parent shall be entitled to receive immediately the difference
between the final amount of the Compensating Payment determined by the
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arbitrators and the Immediate Payment (the "Difference") and interest at 9% per
year on the Difference for the period between the date the Competing Transaction
is consummated and the date the Difference is paid to Parent. In no event shall
Parent be required to make any payment under this Agreement.
(c) This Section 14 shall survive the termination of this Agreement.
Section 15. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity and enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid and unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
Section 17. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 18. CERTAIN DEFINITIONS. For purposes of this Agreement, the term:
(a) "affiliate" of a person means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(c) "knowledge" means knowledge after reasonable inquiry;
(d) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of any person means any corporation,
partnership, joint venture or other legal entity of which such person
(either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more of the stock or other equity interests
the holder of which is generally entitled to vote for the election of the
board of directors or other governing body of such corporation, partnership,
joint venture or other legal entity.
Section 19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
GREAT AMERICAN INSURANCE COMPANY
By: /s/ KAREN HOLLEY HORRELL
-----------------------------------
Name: Karen Holley Horrell
Title: Senior Vice President
AMERICAN FINANCIAL CORPORATION
By: /s/ JAMES E. EVANS
-----------------------------------
Name: James E. Evans
Title: Vice President
AMERICAN FINANCIAL ENTERPRISES, INC.
By: /s/ JAMES E. EVANS
-----------------------------------
Name: James E. Evans
Title: Vice President
CARL H. LINDNER
/s/ CARL H. LINDNER
--------------------------------------
Carl H. Lindner
THE CARL H. LINDNER FOUNDATION
By: /s/ CARL H. LINDNER
-----------------------------------
Name: Carl H. Lindner
Title: Trustee
S. CRAIG LINDNER
/s/ S. CRAIG LINDNER
--------------------------------------
S. Craig Lindner
JACOR COMMUNICATIONS, INC.
By: /s/ RANDY MICHAELS
-----------------------------------
Name: Randy Michaels
Title: President and Co-Chief
Operating Officer
JCAC, INC.
By: /s/ RANDY MICHAELS
-----------------------------------
Name: Randy Michaels
Title: President
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<PAGE>
SCHEDULE A
TO THE
STOCKHOLDERS AGREEMENT
Capitalized terms used in this Schedule A and not otherwise defined in this
Schedule A have the respective meanings assigned to such terms in the attached
Stock Purchase Agreement.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF EACH SELLER SHARES
- -------------------------------------------------------------------------------------------- ------------
<S> <C> <C>
GREAT AMERICAN INSURANCE COMPANY............................................................ 3,455,698 Shares
AMERICAN FINANCIAL CORPORATION.............................................................. 1,500,000 Shares
AMERICAN FINANCIAL ENTERPRISES, INC. ....................................................... 2,611,191 Shares
CARL H. LINDNER............................................................................. 3,257,913 Shares
THE CARL H. LINDNER FOUNDATION.............................................................. 170,253 Shares
S. CRAIG LINDNER............................................................................ 85,500 Shares
------------
Total................................................................................... 11,080,555 Shares
------------
------------
</TABLE>
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EXHIBIT A
WRITTEN CONSENT
OF A SHAREHOLDER OF
CITICASTERS, INC.
PURSUANT TO SECTION 607.0704
OF THE FLORIDA BUSINESS CORPORATION ACT
The undersigned, being the holder of shares of Class A Common Stock,
par value $.01 per share, of Citicasters, Inc., a Florida corporation (the
"Company"), by executing this written consent, hereby approves the Agreement and
Plan of Merger (the "Merger Agreement") dated as of February 12, 1996 among the
Company, Jacor Communications, Inc., an Ohio corporation ("Acquiror") and JCAC,
Inc., a Florida corporation and wholly owned subsidiary of Acquiror
("Acquisition") and thereby approves the adoption by the surviving corporation
in the merger contemplated by the Merger Agreement of the Articles of
Incorporation and By-Laws of Acquisition.
IN WITNESS WHEREOF, the undersigned has executed this written consent as of
the date written below.
Date: ___________________
[Shareholder]
______________________________________
[Shareholder]
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNEX IV
JACOR COMMUNICATIONS, INC.
AND
KEYCORP SHAREHOLDER SERVICES, INC.
AS WARRANT AGENT
****************
WARRANT AGREEMENT
DATED AS OF , 1996
****************
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WARRANT AGREEMENT, dated as of , 1996 between Jacor
Communications, Inc., an Ohio corporation (the "Company"), and KeyCorp
Shareholder Services Inc., of , a national banking association, as
Warrant Agent (the "Warrant Agent") ("Agreement").
The Company proposes to issue Common Stock Purchase Warrants, as hereinafter
described (the "Warrants"), to purchase up to an aggregate of [ ]
shares of its Common Stock without par value ("Common Stock") (the shares of
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Warrant Shares"), pursuant to an Agreement and Plan of Merger among the
Company, JCAC, Inc. and Citicasters, Inc. dated as of February , 1996,
pursuant to which the Company will issue the Warrants, each Warrant entitling
the holder thereof to purchase of a share of Common Stock.
The Company wishes the Warrant Agent to act on behalf of the Company and the
Warrant Agent is willing to act in connection with the issuance, division,
transfer, exchange and exercise of Warrants.
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as follows:
Section 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
Section 2. TRANSFERABILITY AND FORM OF WARRANT.
2.1 REGISTRATION. The Warrants shall be numbered and shall be registered
in a Warrant Register as they are issued. The Company and the Warrant Agent
shall be entitled to treat the Holder of any Warrant as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person, and
shall not be liable for any registration of transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such acts that its participation therein amounts to bad
faith.
2.2 TRANSFER. The Warrants shall be transferable only on the books of the
Company maintained at the principal office of the Warrant Agent upon delivery
thereof duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer, which endorsement shall be guaranteed by a bank or trust
company or a broker or dealer which is a member of the National Association of
Securities Dealers, Inc. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, shall be
deposited and remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Warrant Agent in its discretion. Upon any
registration of transfer, the Warrant Agent shall countersign and deliver a new
Warrant or Warrants to the persons entitled thereto.
2.3 FORM OF WARRANT. The text of the Warrant and of the Purchase Form
shall be substantially as set forth in Exhibit A attached hereto. The price per
Warrant Share and the number of Warrant Shares issuable upon exercise of each
Warrant are subject to adjustment upon the occurrence of certain events, all as
hereinafter provided. The Warrants shall be executed on behalf of the Company by
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or an Assistant Secretary. The signature of
any such officers on the Warrants may be manual or facsimile.
Warrants bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrants or did not hold such
offices on the date of this Agreement.
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Warrants shall be dated as of the date of countersignature thereof by the
Warrant Agent either upon initial issuance or upon division, exchange,
substitution or transfer.
Section 3. COUNTERSIGNATURE OF WARRANTS. The Warrants shall be
countersigned by the Warrant Agent (or any successor to the Warrant Agent then
acting as warrant agent under this Agreement) and shall not be valid for any
purpose unless so countersigned. Warrants may be countersigned, however, by the
Warrant Agent (or by its successor as warrant agent hereunder) and may be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature, issuance or
delivery. The Warrant Agent shall, upon written instructions of the Chairman of
the Board, the President, a Vice President, the Treasurer or the Secretary of
the Company, countersign, issue and deliver Warrants entitling the Holders
thereof to purchase not more than [ ] Warrant Shares (subject to
adjustment pursuant to Section 10 hereof) and shall countersign and deliver
Warrants as otherwise provided in this Agreement.
Section 4. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant certificate may
be exchanged for another certificate or certificates entitling the Holder
thereof to purchase a like aggregate number of Warrant Shares as the certificate
or certificates surrendered then entitle such Holder to purchase. Any Holder
desiring to exchange a Warrant certificate or certificates shall make such
request in writing delivered to the Warrant Agent, and shall surrender, properly
endorsed, the certificate or certificates to be so exchanged. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled thereto a new
Warrant certificate or certificates, as the case may be, as so requested.
Section 5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
5.1 TERM OF WARRANTS. Subject to the terms of this Agreement, each Holder
shall have the right, which may be exercised commencing the date of issuance of
the Warrants and until 5:00 P.M., Eastern Time, on , [2001] [the
fifth anniversary of the date of the Effective Time as defined in the Agreement
and Plan of Merger among the Company, JCAC, Inc., and Citicasters, Inc.] (the
"Expiration Date"), to purchase from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be entitled to
purchase on exercise of such Warrants.
5.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon surrender to the
Warrant Agent, at its principal office, of the certificate or certificates
evidencing the Warrants to be exercised, together with the form of election to
purchase on the reverse thereof duly filled in and signed, which signature shall
be guaranteed by a bank or trust company or a broker or dealer which is a member
of the National Association of Securities Dealers, Inc., and upon payment to the
Warrant Agent for the account of the Company of the Warrant Price (as defined in
and determined in accordance with the provisions of Sections 9 and 10 hereof),
for the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Warrant Price shall be made in cash or by
certified or bank cashier's check drawn on a banking institution chartered by
the government of the United States or any state thereof.
Subject to Section 6 hereof, upon such surrender of Warrants and payment of
the Warrant Price as aforesaid, the Warrant Agent shall cause to be issued and
delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as the Holder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrants, together with cash, as provided in Section 11 hereof,
in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares as of the date of the surrender of
such Warrants and payment of the Warrant Price, as aforesaid. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that a certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares purchasable on such exercise at any time prior to
the date of expiration of the Warrants, a new certificate evidencing the
remaining Warrant or Warrants will be issued, and the
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Warrant Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrant certificate or certificates pursuant to the provisions of
this Section and of Section 3 hereof, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrant certificates duly
executed on behalf of the Company for such purpose.
5.3 RESTRICTION ON EXERCISE. A Warrant may not be exercised in whole or in
part if in the reasonable opinion of counsel to the Company the issuance of the
Common Stock upon such exercise would cause the Company to be in violation of
the Telecommunications Act of 1996 or the rules and regulations in effect
thereunder. A Holder desiring to exercise Warrants shall, if requested by the
Company, furnish to the Company such additional information as the Company deems
reasonably necessary in order to determine if exercise of a Warrant may cause
the Company to be in said violation. In the event the Company's counsel
determines that, in such counsel's opinion after review of such information, if
any, requested by and delivered to, the Company, the exercise of a Warrant would
cause the Company to be in violation of the Telecommunications Act of 1996 or
the rules and regulations in effect thereunder, the Company shall notify such
Holder to that effect. Upon receipt of said notice, such Holder may take such
steps, at its own expense, as it reasonably determines necessary so that the
exercise of the Warrant would not cause such a violation; provided, that upon
completion of said steps, such Holder shall notify the Company and the
provisions of this Section 5.3 shall then apply with respect to the proposed
revised transaction.
5.4 LEGEND ON CERTIFICATE. The certificates evidencing the Warrants may,
in the sole discretion of the Company, bear a legend relating to certain
limitations on the ownership of Common Stock imposed by the Telecommunications
Act of 1996.
Section 6. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue or delivery of any Warrants or certificates for Warrant Shares in a
name other than that of the registered Holder of Warrants in respect of which
such Warrant Shares are issued.
Section 7. MUTILATED OR MISSING WARRANTS. In case any of the certificates
evidencing the Warrants shall be mutilated, lost stolen or destroyed, the
Company shall issue, and the Warrant Agent shall countersign and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate lost,
stolen or destroyed, a new Warrant certificate of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant and indemnity or bond, if requested, also satisfactory to them. An
applicant for such a substitute Warrant certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
Section 8. RESERVATION OF WARRANT SHARES; PURCHASE, CALL AND CANCELLATION
OF WARRANTS.
8.1 RESERVATION OF WARRANT SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants. The Transfer Agent
for the Common Stock and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the Transfer Agent
for the Common Stock and with every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed stock certificates for such purposes and will provide or otherwise
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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.
8.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have the right,
except as limited by law, other agreements or herein, to purchase or otherwise
acquire Warrants at such times, in such manner and for such consideration as it
may deem appropriate.
8.3 CANCELLATION OF WARRANTS. In the event the Company shall purchase or
otherwise acquire Warrants, the same shall thereupon be delivered to the Warrant
Agent and be canceled by it and retired. The Warrant Agent shall cancel any
Warrant surrendered for exchange, substitution, transfer or exercise in whole or
in part.
Section 9. WARRANT PRICE. The price per share at which Warrant Shares
shall be purchasable upon exercise of Warrants shall be $ (the "Warrant
Price"), subject to adjustment pursuant to Section 10 hereof.
Section 10. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
number and kind of securities purchasable upon the exercise of each Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined.
10.1 MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable upon
the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, or (iv) issue
by reclassification of its shares of Common Stock other securities of the
Company (including any such reclassification in connection with a
consolidation or merger in which the Company is surviving corporation), the
number of Warrant Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the Holder of each
Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which he would have owned or have been
entitled to receive after the happening of any of the events described
above, had such Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, or such
event.
(b) In case the Company shall issue rights, options or warrants to all
holders of its outstanding Common Stock, without any charge to such holders,
entitling them (for a period within 45 days after the record date mentioned
below) to subscribe for or purchase shares of Common Stock at a price per
share which is lower at the record date mentioned below than the then
current market price per share of Common Stock (as defined in paragraph (d)
below) the number of Warrant Shares thereafter purchasable upon the exercise
of each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon exercise of each Warrant by a fraction,
of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants plus
the number of additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of shares which the aggregate offering price of the
total number of shares of Common Stock so offered would purchase at the then
current market price per share of Common Stock. Such adjustment shall be
made whenever such rights, options or warrants are issued, and shall become
effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute to all holders of its shares of
Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions payable out of consolidated earnings or surplus
legally available for dividends and dividends or distributions referred to
in paragraph (a)
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above) or rights, options or warrants, or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of
Common Stock (excluding those referred to in paragraph (b) above), then in
each case the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon the exercise of each Warrant, by
a fraction, of which the numerator shall be the then current market price
per share of Common Stock (as defined in paragraph (d) below) on the date of
such distribution, and of which the denominator shall be the then current
market price per share of Common Stock, less the then fair value (as
determined by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options or
warrants, or of such convertible or exchangeable securities applicable to
one share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to the record date for the determination of shareholders
entitled to receive such distribution.
In the Company's sole discretion, in the event of a distribution by the
Company to all holders of its shares of Common Stock of the capital stock of
a subsidiary or securities convertible into or exercisable for such stock,
then in lieu of an adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant, the Holder of each Warrant, upon the
exercise thereof at any time after such distribution shall be entitled to
receive the stock or other securities to which such Holder would have been
entitled if such Holder had exercised such Warrant immediately prior
thereto, all subject to further adjustment as provided in this subsection
10.1; provided, however, that no adjustment in respect of dividends or
interest on such stock or other securities shall be made during the term of
a Warrant or upon the exercise of a Warrant.
(d) For the purpose of any computation under paragraphs (b) and (c) of
this Section, the current market price per share of Common Stock at any date
shall be the average of the daily closing prices for 20 consecutive trading
days commencing 30 trading days before the date of such computation. The
closing price for each day shall be the last reported sales price regular
way or, in case no reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in each case on the
principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted to trading,
the average of the closing bid and asked prices of the Common Stock in the
over-the-counter market as reported by NASDAQ or any comparable system. In
the absence of one or more such quotations, the Company shall determine the
current market price on the basis of such quotations as it considers
appropriate.
(e) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless and until such adjustment would require an increase
or decrease of at least one percent (1%) in the number of Warrant Shares
purchasable upon the exercise of each Warrant; provided, however, that any
adjustments which by reason of this paragraph (e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-thousandth of
a share.
(f) Whenever the number of shares purchasable upon the exercise of each
Warrant is adjusted as provided in paragraphs (a), (b) and (c) above, the
Warrant Price payable upon exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares purchasable immediately thereafter.
(g) No adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant need be made under paragraphs (b) and (c) if the
Company issues or distributes to each Holder of Warrants the rights,
options, warrants, or convertible or exchangeable securities, or evidence of
indebtedness or assets referred to in those paragraphs which each Holder of
Warrants would have been entitled to receive had the Warrants been exercised
prior to the happening of such event or the record date with respect
thereto. No adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant need be made for sales of Warrant Shares pursuant
to a Company plan for reinvestment of dividends or interest. No adjustment
need be made for a change in the par value of the Warrant Shares.
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(h) For the purpose of this subsection 10.1, the term "shares of Common
Stock" shall mean (i) the class of stock designated as the Common Stock of
the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to paragraph (a) above, the Holders
shall become entitled to purchase any shares of the Company other than
shares of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price of such
shares shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Warrant Shares contained in paragraph (a) through (c), inclusive, above,
and the provisions of Section 5 and subsections 10.2 through 10.4,
inclusive, with respect to the Warrant Shares, shall apply on like terms to
any such other shares.
(i) Upon the expiration of any rights, options, warrants or conversion
or exchange privileges, if any thereof shall not have been exercised, the
Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as the case may
be) as if (A) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange rights and (B) such
shares of Common Stock, if any, were issued or sold for the consideration,
if any, actually received by the Company for the issuance, sale or grant of
all such rights, options, warrants or conversion or exchange rights whether
or not exercised; provided, further, that no such readjustment shall have
the effect of increasing the Warrant Price by an amount in excess of the
amount of the adjustment initially made in respect to the issuance, sale or
grant of such rights, options, warrants or conversion or exchange rights.
10.2 DETERMINATION OF CONSIDERATION. Upon any issuance or sale for a
consideration other than cash, or a consideration part of which is other than
cash, of any shares of Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any shares of Common
Stock or Convertible Securities, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company. In case any shares of Common Stock or Convertible Securities or any
rights, options or warrants to subscribe for, purchase or otherwise acquire any
shares of Common Stock or Convertible Securities shall be issued or sold
together with other shares, stock or securities or other assets of the Company
for a consideration which covers both, the consideration for the issue or sale
of such shares of Common Stock or Convertible Securities or such rights or
options shall be deemed to be the portion of such consideration allocated
thereto in good faith by the Board of Directors of the Company.
10.3 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Warrant
Price to any amount deemed appropriate by the Board of Directors of the Company.
10.4 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, to an extent that such
adjustment is equal to or greater than 5% of the Warrant Price in effect prior
to such adjustment, the Company shall cause the Warrant Agent promptly to mail
by first class mail, postage prepaid, to each Holder notice of such adjustment
or adjustments and shall deliver to the Warrant Agent a certificate of a firm of
independent public accountants selected by the Board of Directors of the Company
(who may be the regular accountants employed by the Company) setting forth the
number of Warrant Shares purchasable upon the exercise of each Warrant and the
Warrant Price of such Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such certificate shall be
conclusive evidence of the correctness of such adjustment. The Warrant Agent
shall be entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same,
from time to time, to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not at any
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time be under any duty or responsibility to any Holders to determine whether any
facts exist which may require any adjustment of the Warrant Price or the number
of Warrant Shares or other stock or property purchasable on exercise thereof, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed in making such adjustment.
10.5 NO ADJUSTMENT OF DIVIDENDS. Except as provided in subsection 10.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
10.6 PRESERVATION OF PURCHASE RIGHTS RECLASSIFICATION, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the Company
into another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with the Warrant Agent an agreement that (i) each Holder shall have the right
thereafter upon payment of the Warrant Price in effect immediately prior to such
action to purchase upon exercise of each Warrant the kind and amount of shares
and other securities and property (including cash) which he would have owned or
have been entitled to receive after the happening of such consolidation, merger,
sale, transfer or lease had such Warrant been exercised immediately prior to
such action; or (ii) in the event that all of the property to which a Holder
would be entitled to receive in such an action had such Warrant been exercised
immediately prior to such action is cash, then upon surrender of a certificate
representing Warrants each Holder shall be entitled to receive cash in the
amount of the difference between the amount which such Holder would have paid to
exercise such Warrants in full at the Warrant Price in effect immediately prior
to such action and the amount of cash which he would have been entitled to
receive after the happening of such consolidation, merger, sale, transfer or
lease had such Warrant been exercised immediately prior to such action;
provided, however, that no adjustment in respect of dividends, interest or other
income on or from such shares or other securities and property shall be made
during the term of a Warrant or upon the exercise of a Warrant. The Company
shall mail by first class mail, postage prepaid, to each Holder, notice of the
execution of any such agreement. Such agreement shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 10. The provisions of this subsection 10.6 shall
similarly apply to successive consolidations, mergers, sales, transfers or
leases. The Warrant Agent shall be under no duty or responsibility to determine
the correctness of any provisions contained in any such agreement relating to
the kind or amount of shares of stock or other securities or property receivable
upon exercise of Warrants or with respect to the method employed and provided
therein for any adjustments and shall be entitled to rely upon the provisions
contained in any such agreement.
10.7 STATEMENT ON WARRANTS. Irrespective of any adjustments in the Warrant
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
Section 11. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 11,
be issuable on the exercise of any Warrant (or specified portion thereof), the
Warrant Agent shall pay (and shall be promptly reimbursed by the Company upon
demand therefor) an amount in cash equal to the closing price for one share of
the Common Stock, as defined in paragraph (d) of subsection 10.1, on the trading
day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
Section 12. NO RIGHTS AS STOCKHOLDERS; NOTICES TO HOLDERS. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as
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stockholders of the Company. If, however, at any time prior to the expiration of
the Warrants and prior to their exercise, any of the following events shall
occur:
(a) the Company shall declare any dividend payable in any securities
upon its shares of Common Stock or make any distribution (other than a cash
dividend as to which no adjustment in the Warrant Price is to be made as
herein provided) to the holders of its shares of Common Stock; or
(b) the Company shall offer to the holders of its shares of Common Stock
any additional shares of Common Stock or securities convertible into shares
of Common Stock or any right to subscribe thereto; or
(c) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation, merger, transfer or lease of all or
substantially all of its property, assets, and business as an entirety)
shall be proposed.
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Warrant Agent and the Holders as provided in
Section 18 hereof and (b) cause notice of such event to be published once in THE
WALL STREET JOURNAL, such giving of notice and publication to be completed at
least 20 days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the stockholders entitled to such
dividend, distribution, or subscription rights, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to publish or mail such notice
or any defect therein or in the publication or mailing thereof shall not affect
the validity of any action taken in connection with such dividend, distribution
or subscription rights, or such proposed dissolution, liquidation or winding up.
Section 13. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS; INSPECTION OF
WARRANT AGREEMENT. The Warrant Agent shall account to the Company with respect
to Warrants exercised two business days thereafter and concurrently pay to the
Company all monies received by the Warrant Agent for the purchase of the Warrant
Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices given
or received hereunder available for inspection by the Holders during normal
business hours at its principal office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may request.
Section 14. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT
AGENT. Any corporation into which the Warrant Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporation trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 16 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, any of
the Warrants shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent and deliver such Warrants so countersigned; and in case at that time any
of the Warrants shall not have been countersigned, any successor to the Warrant
Agent may countersign such Warrants either in the name of the predecessor
Warrant Agent or in the name of the successor Warrant Agent; and in all such
cases Warrants shall have the full force provided in the Warrants and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignatures under its prior name and
deliver such Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
Warrants shall have the full force provided in the Warrants and in this
Agreement.
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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.
15.1 CORRECTNESS OF STATEMENTS. The statements contained herein and in the
Warrants shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as herein
otherwise provided.
15.2 BREACH OF COVENANTS. The Warrant Agent shall not be responsible for
any failure of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant to be complied with by the Company.
15.3 PERFORMANCE OF DUTIES. The Warrant Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents (which shall not include its
employees) and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
15.4 RELIANCE ON COUNSEL. The Warrant Agent may consult at any time with
legal counsel satisfactory to it and the Company (who may be counsel for the
Company) and the Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
15.5 PROOF OF ACTIONS TAKEN. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by the Chairman of the Board
or President, a Vice President, the Treasurer or the Secretary of the Company
and delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
15.6 COMPENSATION. The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the performance
of its duties under this Agreement in accordance with the fee schedule agreed to
from time to time by the Company and the Warrant Agent, to reimburse the Warrant
Agent for all expenses, taxes and governmental charges and other charges of any
kind and nature reasonably incurred by the Warrant Agent in the performance of
its duties under this Agreement, and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and counsel
fees, for anything done or omitted by the Warrant Agent in the performance of
its duties under this Agreement except as a result of the Warrant Agent's
negligence or bad faith.
15.7 LEGAL PROCEEDINGS. The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceedings relative thereto, any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable benefit
of the Holders, as their respective rights or interests may appear.
A-IV-9
<PAGE>
15.8 OTHER TRANSACTIONS IN SECURITIES OF COMPANY. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants, or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
15.9 LIABILITY OF WARRANT AGENT. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith.
15.10 RELIANCE ON DOCUMENTS. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, documents or instrument reasonably believed by it to be genuine and
to have been signed, set or presented by the proper party or parties.
15.11 VALIDITY OF AGREEMENT. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its countersignature
thereof); nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Warrant
Shares (or other stock) to be issued pursuant to this Agreement or any Warrant,
or as to whether any Warrant Shares (or other stock) will, when issued, be
validly issued, fully paid and nonassessable, or as to the Warrant Price or the
number or amount of Warrant Shares or other securities or other property
issuable upon exercise of any Warrant.
15.12 INSTRUCTIONS FROM COMPANY. The Warrant Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President, a Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officer for advice or instructions in connection with its duties, and shall not
be liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or officers.
Section 16. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company 30 days
notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then any Holder may apply to any
court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Any successor warrant agent, whether appointed by the Company or
such a court, shall be a bank or trust company, in good standing, incorporated
under the laws of the United States of America or any state thereof and having
at the time of its appointment as warrant agent a combined capital and surplus
of at least $100,000,000. After appointment, the successor warrant agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed, but the
former Warrant Agent shall deliver and transfer to the successor warrant agent
any property at the time held by it hereunder, and execute and deliver for
further assurance, conveyance, act or deed necessary for the purpose. Failure to
file any notice provided for in this Section 16, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be. In the event of such resignation or removal, the successor warrant agent
shall mail, by first class mail, postage prepaid, to each Holder, written notice
of such removal or resignation and the name and address of such successor
warrant agent.
Section 17. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment of
any subsequent transfer agent for the Common Stock, or any other shares of the
Company's capital stock issuable upon the exercise
A-IV-10
<PAGE>
of the Warrants, the Company will file with the Warrant Agent a statement
setting forth name and address of such subsequent transfer agent.
Section 18. NOTICES. Any notice pursuant to this Agreement by the Company
or by any Holder to the Warrant Agent, or by the Warrant Agent or by any Holder
to the Company, shall be in writing and shall be delivered in person or by
facsimile transmission, or mailed first class, postage prepaid (a) to the
Company, at its offices at ; or (b) the Warrant agent, to
[Bank] . Each party hereto may from time to time change the
address to which notices to it are to be delivered or mailed hereunder by notice
to the other party.
Any notice mailed pursuant to this Agreement by the Company or the Warrant
Agent to the Holders shall be in writing and shall be mailed first class,
postage prepaid, or otherwise delivered to such Holders at their respective
addresses on the books of the Warrant Agent.
Section 19. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent
may from time to time supplement or amend this Agreement without the approval of
any Holder, in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and which shall not adversely affect the interests of the
Holders.
This Agreement shall not otherwise be modified, supplemented or altered in
any respect except with the consent in writing of the Holders of Warrants
representing not less than 50% of the Warrants then outstanding; and provided,
further, that no change in (i) the number or nature of the securities
purchasable upon the exercise of any Warrant, (ii) the Warrant Price therefor,
(iii) the acceleration of the Expiration Date, or (iv) the anti-dilution
provisions of Section 10 hereof which would adversely affect the interests of
any Holder shall be made without the consent in writing of the Holder of the
certificate representing such Warrant, other than such changes as are
specifically prescribed by this Agreement as originally executed or are made in
compliance with applicable law.
Section 20. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
Section 21. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other corporation unless the successor
or purchasing corporation, as the case may be (if not the Company), shall
expressly assume, by supplemental agreement satisfactory in form to the Warrant
Agent and executed and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
Section 22. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Ohio, without giving effect to principles of conflict of laws.
Section 23. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Holders of the Warrants.
Section 24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 25. CAPTIONS. The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have no substantive
effect.
A-IV-11
<PAGE>
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:
By:
- ------------------------------------------
Secretary
KEYCORP SHAREHOLDER SERVICES, INC.
as Warrant Agent
By:
--------------------------------------
Title:
[SEAL]
Attest:
By:
- ------------------------------------------
Corporate Trust Officer
A-IV-12
<PAGE>
EXHIBIT A TO THE WARRANT AGREEMENT
VOID AFTER 5:00 P.M. EASTERN TIME, , 2001
NO. WARRANTS TO PURCHASE
[ ] SHARES OF COMMON STOCK
JACOR COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANTS
This certifies that, for value received, or registered assigns (the
"Holder"), is entitled to purchase from Jacor Communications, Inc., an Ohio
corporation (the "Company"), at any time, at the purchase price of $ per
share (the "Warrant Price"), the number of shares of Common Stock, without par
value, of the Company ("Common Stock"), shown above. The number of shares
purchasable upon exercise of the Warrants and the Warrant Price are subject to
adjustment from time to time as set forth in the Warrant Agreement referred to
below.
Warrants may be exercised in whole or in part by presentation of this
Warrant Certificate with the Purchase Form on the reverse side hereof duly
executed, which signature shall be guaranteed by a bank or trust company or a
broker or dealer which is a member of the National Association of Securities
Dealers, Inc., and simultaneous payment of the Warrant Price at the principal
office of KeyCorp Shareholder Services, Inc. (the "Warrant Agent") in
. Payment of such price shall be made at the option of the Holder
hereof in cash or by certified or bank cashier's check drawn upon a bank
chartered by the government of the United States or any state thereof.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of , 1996, between the Company and the Warrant
Agent and is subject to the terms and provisions contained in the Warrant
Agreement, to all of which the Holder of this Warrant Certificate by acceptance
hereof consents. A copy of the Warrant Agreement may be obtained by the Holder
hereof upon written request to the Company.
Upon any partial exercise of the Warrants evidenced by this Warrant
Certificate, there shall be countersigned and issued to the Holder hereof a new
Warrant Certificate for the shares of Common Stock as to which the Warrants
evidenced by this Warrant Certificate shall not have been exercised. This
Warrant Certificate may be exchanged at the office of the Warrant Agent by
surrender of this Warrant Certificate properly endorsed either separately or in
combination with one or more other Warrant Certificates for one or more new
Warrant Certificates evidencing the right of the Holder thereof to purchase the
same aggregate number of shares as were purchasable on exercise of the Warrants
evidenced by the Warrant Certificate or Certificates exchanged. No fractional
shares will be issued upon the exercise of any Warrant, but the 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.
A-IV-13
<PAGE>
This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent.
DATED:
COUNTERSIGNED:
[Bank]
Warrant Agent
By:
- --------------------------------------
Authorized Signature
JACOR COMMUNICATIONS, INC.
Attest:
- ---------------------------------- By:
- ---------------------------------------
Secretary Title:
A-IV-14
<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 in full by tendering cash or certified or bank cashier's check
drawn upon a bank chartered by the government of the United States or any state
thereof in the aggregate amount of $ . The undersigned requests that
certificates for such shares of Common Stock shall be issued in the name of
- --------------------------------------------------------------------------------
(Please print Name, Address and Social Security No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and, if said number of shares shall not be all the shares purchasable
thereunder, that a New Warrant Certificate for the balance remaining of the
shares purchasable under the within Warrant Certificate be issued in the name of
the undersigned Warrantholder or his Assignee as below indicated and delivered
to the address stated below.
DATED:
- --------- ,
- ---------
Name of Warrantholder or Assignee:
----------------------------------------------------------
(Please
Print)
Address:
- --------------------------------------------------------------------------------
Signature:
- --------------------------------------------------------------------------------
(The above signature must correspond with the name as written
upon the face of this Warrant Certificate in every
particular, without alteration or enlargement or any change
whatever, unless this Warrant Certificate has been assigned.)
Signature Guaranteed:
- ----------------------------------------
A-IV-15
<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 Printed or Typewritten) the
within Warrant Certificate, irrevocably constituting and appointing ,
Attorney to transfer said Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
DATED: ,
Signature:
-----------------------------------------------------------------------------
(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.)
Signature Guaranteed:
- ---------------------------------
A-IV-16
<PAGE>
ANNEX V
[SALOMON BROTHERS LETTERHEAD]
CONFIDENTIAL
February 12, 1996
Board of Directors
Citicasters, Inc.
One East Fourth Street
Suite 600
Cincinnati, OH 45202
Gentlemen:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the holders of shares of Common Stock (the
"Shares"), of Citicasters Inc., a Florida corporation (the "Company"), of the
consideration to be received by such holders in the proposed merger (the
"Merger") of JCAC, Inc. ("Sub"), a Florida corporation and a direct wholly owned
subsidiary of Jacor Communications, Inc., an Ohio corporation ("Jacor"), with
and into the Company. Pursuant to the Agreement and Plan of Merger dated as of
February 12, 1996 (the "Merger Agreement") among the Company, Jacor and Sub, all
outstanding Shares will receive $29.50 per Share, plus the Warrant Consideration
as defined in the Merger Agreement.
In connection with rendering our opinion, we have reviewed and analyzed,
among other things, the following: (i) a draft of the Merger Agreement dated
February 11, 1996 and certain related documents; (ii) certain publicly available
and other information concerning the Company and Jacor, including the Annual
Reports on Form 10-K of the Company and Jacor for each of the years in the
five-year period ended December 31, 1994 and the Quarterly Reports on Form 10-Q
of the Company and Jacor for the quarter ended September 30, 1995; (iii) certain
other internal information for the Company, primarily financial in nature,
including the Company's estimates of 1995 and 1996 earnings, concerning the
business and operations of the Company furnished to us by the Company for
purposes of our analysis; (iv) certain publicly available information concerning
the historic and current trading of, and the historic and current trading market
for, the Shares and for the common stock of Jacor; (v) certain publicly
available information concerning the historic and current trading of, and the
historic and current trading market for, the equity securities of certain other
companies that we believe to be comparable to the Company and Jacor; and (vi)
certain publicly available information concerning the nature and terms of
certain other acquisition transactions that we consider relevant to our inquiry.
We were not requested to and did not generally solicit
A-V-1
<PAGE>
SALOMON BROTHERS INC
Citicasters, Inc.
February 12, 1996
Page 2
[SALOMON BROTHERS LOGO]
third party interest in the Company. We have also met with certain officers and
employees of the Company to discuss the foregoing as well as other matters we
believe relevant to our inquiry. We have also considered such other information,
financial studies, analyses, investigations and financial, economic and market
criteria which we deemed relevant.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided us or publicly available and have neither attempted
independently to verify nor assumed responsibility for verifying any of such
information. With respect to the Company's estimates of earnings for 1995 and
1996, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the Company's
management as to the financial performance of the Company for the periods
covered. We have not made or obtained any independent evaluations or appraisals
of any of the Company's or Jacor's assets, properties or facilities, nor have we
been furnished with any such evaluations or appraisals. We have assumed that the
Merger will be consummated in accordance with the terms of the Merger Agreement.
We have also assumed that the definitive Merger Agreement and related documents
will not, when executed, contain any terms or conditions that differ materially
from the terms and conditions contained in the drafts of such documents we have
reviewed.
In conducting our analysis and arriving at our opinion as expressed herein,
we have considered such financial and other factors as we have deemed
appropriate under the circumstances, including, among others, the following: (i)
the historical and current financial position and results of the operations of
the Company and Jacor based on publicly available financial information; (ii)
the business prospects of the Company and, where such information was publicly
available, of Jacor; (iii) the historical and current trading of, and the
historic and current trading market for, the Shares and for the common stock of
Jacor and for the equity securities of certain other companies that we believe
to be comparable to the Company and Jacor; and (iv) the nature and terms of
certain other acquisition transactions that we consider relevant to our inquiry.
We have also taken into account our assessment of general economic, market and
financial conditions and our knowledge of the broadcasting industry as well as
our experience in connection with similar transactions and securities valuation
generally. Our opinion necessarily is based upon conditions as they exist and
can be evaluated on the date hereof. Our opinion is, in any event, limited to
the fairness, from a financial point of view, of the consideration to be
received by the holders of the Shares in the Merger and does not address the
Company's underlying business decision to effect the Merger or constitute a
recommendation to any holder of Shares as to how such holder should vote with
respect to the Merger.
As you are aware, Salomon Brothers Inc has acted as financial advisor to the
Company in connection with the Merger and will receive a fee for our services, a
substantial portion of which is contingent upon the consummation of the
transaction contemplated by the Merger Agreement. Additionally, Salomon Brothers
Inc has previously rendered certain investment banking and financial advisory
services to affiliates of the Company for which we received customary
compensation. In addition, in the ordinary course of our business, we may
actively trade the securities of the Company and Jacor for our own account and
for the accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.
A-V-2
<PAGE>
SALOMON BROTHERS INC
Citicasters, Inc.
February 12, 1996
Page 3
[SALOMON BROTHERS LOGO]
Salomon Brothers Inc has provided certain investment banking services to
Jacor in the past, and may provide investment banking services to Jacor in the
future.
It is understood that this letter is for the information of the Board of
Directors of the Company and may not be used for any other purpose without prior
written consent, except that this opinion may be included in any filing made by
the Company or Jacor with the Securities and Exchange Commission with respect to
the Merger and transactions related thereto.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the consideration to be received by the holders of Shares in the
Merger is fair to such holders from a financial point of view.
Very truly yours,
SALOMON BROTHERS INC
A-V-3
<PAGE>
ANNEX VI
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated as of March 13, 1996, is
made by and among Jacor Communications, Inc., an Ohio corporation ("Acquiror"),
Citicasters, Inc., a Florida corporation (the "Company"), and PNC Bank, Ohio,
N.A., as Escrow Agent ("Escrow Agent").
Acquiror and the Company are the parties to an Agreement and Plan of Merger
dated as of the date hereof (as in effect from time to time, the "Merger
Agreement"). Each capitalized term which is used but not otherwise defined in
this Agreement has the meaning assigned to that term in the Merger Agreement.
If the Merger Agreement is terminated by the Company pursuant to any
Escrow-Surrender Provision (as defined below), then the Company will be entitled
to a payment in the amount of the Escrow Payment (as defined below). As security
for the obligations to make such payment, Acquiror is depositing or causing to
be deposited a Letter of Credit (as defined below) in accordance with the terms
of this Agreement, to be held and acted upon by Escrow Agent in accordance with
the provisions of this Agreement.
The parties agree as follows:
1 DEFINITIONS. As used in this Agreement:
(a) "Escrow-Surrender Event" means solely the termination of the Merger
Agreement under the circumstances defined in Sections 8.2(b)(i), 8.2(b)(ii),
8.2(b)(iii), 8.2(b)(iv) or 8.2(b)(v) of the Merger Agreement.
(b) "Escrow-Retention Event" means the termination of the Merger Agreement
in any manner that is not an Escrow-Surrender Event.
2 ESCROW PAYMENT. (a) Simultaneously with the delivery of the consents by
the Consenting Shareholders (as defined in the Merger Agreement) (the "Delivery
Date"), Acquiror will deliver or cause to be delivered to Escrow Agent an
irrevocable, direct pay letter of credit issued to Escrow Agent on behalf of
Acquiror by Banque Paribas (the "Initial Issuing Bank") in the amount of
$75,000,000.00 (the "Escrow Payment"). If Acquiror fails to comply with the
requirements of the preceding sentence, Acquiror will on the day immediately
following the Delivery Date pay to the Escrow Agent in immediately available
funds the sum of $75,000,000.00. Acquiror, at its option and at its expense, may
replace the Initial Letter of Credit (or any Replacement Letter of Credit) by
delivery of another irrevocable, direct pay letter of credit in the amount of
$75,000,000.00 issued by an institution that is reasonably acceptable to the
Company, and in a form that is reasonably acceptable to the Company (any such
other letter of credit being referred to herein as a "Replacement Letter of
Credit"). Upon receipt of a Replacement Letter of Credit, Escrow Agent will
surrender the replaced letter of credit to the issuing institution for
cancellation. Any letter of credit held by the Escrow Agent at any time pursuant
to this Agreement is referred to herein as the "Letter of Credit," and any
institution that has issued such Letter of Credit is referred to herein as the
"Issuing Bank".
(b) Notwithstanding anything in this Agreement to the contrary, the Letter
of Credit (or any Replacement Letter of Credit) may have any expiration date
reasonably determined by Acquiror; PROVIDED, HOWEVER, that (i) if the Merger
Agreement shall not have been terminated and (ii) if a Replacement Letter of
Credit in the amount of $75,000,000.00 issued by an institution reasonably
acceptable to the Company and in a form that is reasonably acceptable to the
Company shall not have been delivered and accepted by the Escrow Agent at least
two business days prior to the expiration date of the then outstanding Letter of
Credit (the "Expiration Date"), then the Escrow Agent shall (x) on the business
day immediately preceding the Expiration Date, present to the Issuing Bank in
accordance with the Letter of Credit a draft for payment to the Escrow Agent of
an amount equal to $75,000,000.00 (the "Letter of Credit Proceeds"); and (y)
upon receipt of the Letter of Credit Proceeds, hold such proceeds in escrow
until Acquiror shall have delivered, and the Escrow Agent shall have accepted, a
Letter of Credit in the amount of $75,000,000.00 issued by an institution
reasonably acceptable to the Company and in a form that is reasonably acceptable
to the Company.
A-VI-1
<PAGE>
3 APPOINTMENT OF ESCROW AGENT. Acquiror and the Company hereby designate
and appoint Escrow Agent as their joint escrow agent pursuant to the terms of
this Agreement. Escrow Agent agrees to (a) act as Escrow Agent, (b) hold and act
upon the Letter of Credit and (c) deliver the proceeds of any payment under the
Letter of Credit, in each case in accordance with the terms and conditions of
this Escrow Agreement.
4 DISBURSEMENT REQUESTS. At any time after termination of the Merger
Agreement pursuant to any Escrow-Surrender Event, the Company may deliver to
Escrow Agent and simultaneously to Acquiror a written notice (a "Company Payment
Request") which states that such termination has occurred and requests that
Escrow Agent, unless the Escrow Agent shall have already drawn on the Letter of
Credit pursuant to Section 2(b) of this Agreement, (i) present to the Issuing
Bank in accordance with the Letter of Credit a draft for payment to Escrow Agent
of an amount equal to $75,000,000.00, and (ii) upon receipt of proceeds of such
payment under the Letter of Credit, pay such proceeds in the manner indicated in
such notice. If the Escrow Agent shall have already drawn on the Letter of
Credit pursuant to Section 2(b) of this Agreement, the Escrow Agent shall, on
the second business day after the Escrow Agent's receipt of the Company Payment
Request, pay the proceeds of the Letter of Credit to the Company in the manner
indicated in the Company Payment Request. Promptly upon termination of the
Merger Agreement pursuant to an Escrow-Retention Provision, the Company shall
deliver to Escrow Agent and Acquiror a written notice (a "Company Surrender
Request") which states that such termination has occurred and requests that
Escrow Agent surrender the Letter of Credit to the Issuing Bank for
cancellation, or if the Escrow Agent shall have already drawn on the Letter of
Credit pursuant to Section 2(b), requests the Escrow Agent to pay the proceeds
of the Letter of Credit to Acquiror in the manner indicated in the Company
Surrender Request.
5 ESCROW AGENT'S RELEASE OF THE ESCROW FUND.
(a) ACTIONS UPON JOINT INSTRUCTIONS. Escrow Agent will give instructions to
the Issuing Bank or take other actions with respect to the Letter of Credit, and
make disbursements, in accordance with the joint written instructions of the
Company and Acquiror.
(b) CONSUMMATION OF MERGER. At the closing of the Merger, pursuant to joint
written instructions executed by Acquiror and the Company, Escrow Agent will
surrender the Letter of Credit to the Issuing Bank for cancellation, or if the
Escrow Agent shall have drawn on the Letter of Credit pursuant to Section 2(b),
the Escrow Agent will pay the proceeds of the Letter of Credit to Acquiror as
directed by Acquiror. If the Letter of Credit is cancelled pursuant to this
paragraph 5(b), then this Agreement will terminate.
(c) ACTIONS UPON COMPANY PAYMENT REQUEST. Upon receipt from the Company of
a Company Payment Request pursuant to paragraph 4, Escrow Agent will immediately
(and in any event within one business day) give Acquiror notice of such Company
Payment Request. Escrow Agent will take the requested actions set forth in such
Company Payment Request on the second business day following receipt of such
Company Payment Request.
(d) ACTIONS UPON COMPANY SURRENDER REQUEST. Immediately upon receipt from
the Company of a Company Surrender Request pursuant to paragraph 4, Escrow Agent
will take the requested actions set forth in such Company Surrender Request.
(e) LETTER OF CREDIT WAIVER. Immediately upon receipt from the Company or
Acquiror of a Letter of Credit Waiver (as defined in the Merger Agreement),
Escrow Agent will surrender the Letter of Credit to the Issuing Bank for
cancellation, or if the Escrow Agent shall have already drawn on the Letter of
Credit pursuant to Section 2(b), pay the proceeds of the Letter of Credit to
Acquiror. Upon such surrender or payment, this Agreement will terminate.
6 LIABILITY OF ESCROW AGENT. Escrow Agent's duties and obligations under
this Agreement will be determined solely by the express provisions of this
Agreement. Escrow Agent will be under no obligation to refer to any documents
other than this Agreement and the instructions and requests delivered to Escrow
Agent hereunder. Escrow Agent will not have any duties or responsibilities
except as expressly provided in this Agreement. Escrow Agent will not be
obligated to recognize, and will not have any liability or responsibility
arising under, any agreement to which Escrow Agent is not a party, even though
reference thereto may be made herein. With respect to Escrow Agent's
responsibility, the Company and Acquiror further agree that:
A-VI-2
<PAGE>
(a) Escrow Agent will have no liability by reason of any error of
judgment or for any act done or step taken or omitted by Escrow Agent, or
for any mistake of fact or law or anything which Escrow Agent may do or
refrain from doing in Agent's gross negligence, bad faith or willful
misconduct. Escrow Agent may consult with counsel of its own choice (other
than counsel for Acquiror or the Company or any of their affiliates) and
will have full and complete authorization and protection for any action
taken or suffered by Escrow Agent hereunder in good faith and in accordance
with the opinion of such counsel. The reasonable costs of such counsel's
services will be paid to Escrow Agent in accordance with paragraph 7. The
Company and Acquiror will jointly indemnify and hold Escrow Agent harmless
from and against any and all liability and expense which may arise out of
any action taken or omitted by Escrow Agent in accordance with this
Agreement, except for such liability and expenses which results from Escrow
Agent's gross negligence, bad faith or willful misconduct.
(b) The Company or Acquiror may examine the Escrow Agent's records
pertaining to this Agreement at any time during normal business hours at
Escrow Agent's office upon 24 hours' prior notice.
(c) This Agreement is a personal one, Escrow Agent's duties hereunder
being only to the other parties hereto, their successors, permitted assigns
and legal representatives, and to no other Person.
(d) No succession to, or assignment of, the interest of Acquiror or the
Company will be binding upon the Escrow Agent unless and until written
evidence of such succession or assignment, in form satisfactory to Escrow
Agent, has been filed with and accepted by Escrow Agent.
(e) Escrow Agent may rely or act upon requests or instructions signed by
the proper parties or bearing a signature or signatures reasonably believed
by Escrow Agent to be genuine of the proper parties.
(f) In case any emergency held by Escrow Agent will be attached,
garnished or levied upon under a court order, or the delivery thereof will
be stayed or enjoined by a court order, or any writ, order, judgment or
decree will be made or entered by any court, or any order, judgment or
decree will be made or entered by any court affecting the property deposited
under this Agreement or any party thereof, Escrow Agent is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs,
orders, judgments or decrees so entered or issued, whether or with or
without jurisdiction, and in case Escrow Agent obeys or complies with any
such writ, order, judgment or decree, Escrow Agent will not be liable to
Acquiror or the Company or to any other Person by reason of such compliance
in connection with such litigation, and the Company and Acquiror jointly and
severally agree to pay to Escrow Agent on demand its reasonable costs,
attorneys' fees, charges, disbursements and expenses in connection with such
litigation.
(g) Subject to the terms of this paragraph 6(g), Escrow Agent reserves
the right to resign at any time by giving written notice of resignation to
Acquiror and the Company specifying the effective date thereof. Within 30
days after receiving such notice, Acquiror and the Company jointly will
appoint a successor escrow agent to which Escrow Agent may distribute the
property then held hereunder, less Escrow Agent's accrued fees and
reasonable costs and expenses. Escrow Agent hereby agrees to use
commercially reasonable efforts to comply with the Issuing Bank's conditions
for transfer of the Letter of Credit to a successor escrow agent. If a
successor escrow agent has not been appointed or has not accepted such
appointment by the end of such 30-day period, Escrow Agent may apply to a
court of competent jurisdiction for the appointment of a successor escrow
agent, and Acquiror and the Company will pay the reasonable costs, expenses
and attorneys' fees which are incurred in connection with such proceeding.
Notwithstanding the above, if a transfer of the Letter of Credit is
prohibited by this terms, or if the Letter of Credit does not expressly
permit a subsequent holder to draw on such Letter of Credit, then Escrow
Agent shall not deliver the Letter of Credit to the clerk for any such
court, but instead either (i) Acquiror shall arrange for the replacement of
such Letter of Credit with another Letter of Credit permitting such transfer
and permitting the subsequent holder to draw on the replacement Letter of
Credit in accordance with the terms hereof and as specified in the
replacement Letter of Credit (which shall be on the same terms and
conditions contained in the Letter of Credit), in which event the Escrow
Agent may deposit such replacement Letter of Credit with the clerk of any
such court, or (ii) the Escrow Agent shall draw on such non-transferable
Letter of Credit and deliver the proceeds to the clerk of such court.
A-VI-3
<PAGE>
(h) Escrow Agent does not have any interest in the escrow fund, but is
serving as escrow holder only and has possession thereof. If any payments of
income from the escrow fund will be subject to withholding regulations then
in force with respect to United States taxes, Acquiror and the Company agree
to provide Escrow Agent with appropriate forms for or with respect to such
withholder. This paragraph 6(h) and paragraphs 6(a), 6(f), 6(g) and 7 will
survive notwithstanding any termination of this Agreement or Escrow Agent's
resignation.
7 COMPENSATION OF ESCROW AGENT. Escrow Agent will be entitled to a
reasonable fee for services rendered and for reimbursement of extraordinary
expenses incurred in performance of its duties, which extraordinary expenses are
not included in said fee. Said fee and expenses will be divided equally between
Acquiror, on the one hand, and the Company, on the other hand.
8 NOTICES. All notices, requests, demands, claims and other communications
hereunder ("Notices") will be in writing, personally delivered or sent by
facsimile and addressed to the intended recipient as set forth below:
NOTICES TO THE COMPANY:
Citicasters Inc.
Suite 600
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Samuel J. Simon, Esq.
Phone: (513) 562-8019
Facsimile: (513) 562-8075
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE TO THE COMPANY) TO:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske, Esq.
Phone: (216) 586-7264
Facsimile: (216) 579-0212
NOTICES TO ACQUIROR:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Attention: Mr. Randy Michaels
Phone: (513) 621-1300
Facsimile: (513) 621-0090
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE TO ACQUIROR) TO:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: Thomas W. Kahle
Phone: (513) 621-6464
Facsimile: (513) 651-3836
A-VI-4
<PAGE>
and to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, IL 60603-3441
Attention: Scott J. Davis, Esq.
Phone: (312) 701-7311
Facsimile: (312) 701-7711
NOTICES TO ESCROW AGENT:
PNC Bank, Ohio, N.A.
201 East Fifth Street
Corporate Trust Department
Third Floor
Cincinnati, OH 45202
Attention: Jack Hannah
Phone: (513) 651-8385
Facsimile: (513) 651-7901
Any notices will be deemed to have been given pursuant to this Agreement when
personally delivered or sent by facsimile (electronically confirmed). Any party
may change the address to which Notices are to be delivered by giving the other
parties notice in the manner provided in this paragraph 8.
9 BINDING EFFECT: ASSIGNMENT. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
10 SEVERABILITY. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision will be fully severable; this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part of this Agreement; and the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement.
11 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any Person.
12 HEADINGS. The headings used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced and construed
as if no heading had been used in this Agreement.
13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
Person, but all such counterparts taken together will constitute one and the
same instrument.
14 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Ohio, without giving effect to
any choice of law or conflict of law provision (whether of the State of Ohio or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Ohio.
15 NUMBER. Each defined term used in this Agreement has a comparable
meaning used in its plural or singular form.
A-VI-5
<PAGE>
16 INCLUDING. Whenever the term "including" (whether or not that term is
followed by the word "but not limited to" or "without limitation" or words of
similar effect) is used in this Agreement in connection with a listing of items
within a particular classification, that listing will be interpreted to be
illustrative only and will not be interpreted as a limitation on, or exclusive
listing of, the items within that classification.
17 TERMINATION. If the Letter of Credit (other than a Letter of Credit
that is replaced by a Replacement Letter of Credit) is cancelled pursuant to the
terms of this Agreement, then this Agreement will terminate. This Agreement
shall survive any termination of the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
JACOR COMMUNICATIONS, INC.
By: /s/ RANDY MICHAELS
-----------------------------------
Its: President and Co-Chief
Operating Officer
-----------------------------------
CITICASTERS INC.
By: /s/ SAMUEL J. SIMON
-----------------------------------
Its: Senior Vice President
-----------------------------------
PNC BANK, OHIO, N.A., as Escrow Agent
By: /s/ JACK C. HANNAH
-----------------------------------
Its: Bank Officer
-----------------------------------
A-VI-6
<PAGE>
ANNEX VII
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER ("Plan") dated as of , 1996, is
entered into by JACOR COMMUNICATIONS, INC., an Ohio corporation ("Jacor"), and
NEW JACOR, INC., a Delaware corporation ("New Jacor"), under the following
circumstances:
A. Jacor is a corporation duly incorporated and existing under the
General Corporation Law of the State of Ohio.
B. New Jacor is a corporation duly incorporated and existing under the
General Corporation Law of the State of Delaware and is a wholly-owned
subsidiary of Jacor.
C. The Boards of Directors of Jacor and New Jacor deem it desirable and
in the best interests of their corporations and their stockholders that
Jacor be merged with and into New Jacor upon the terms and conditions
hereinafter set forth, which terms and conditions have been approved by the
Boards of Directors of the constituent corporations.
NOW, THEREFORE, in consideration of the agreements and covenants and subject
to the conditions herein set forth, Jacor and New Jacor agree as follows:
SECTION 1. MERGER. Jacor and New Jacor will be merged into a single
corporation by Jacor merging with and into New Jacor ("Merger"). New Jacor will
survive the Merger and change its name to "Jacor Communications, Inc." (the
"Resulting Corporation"). The Resulting Corporation will be governed by the
General Corporation Law of the State of Delaware. Upon such Merger, the separate
existence of Jacor (except insofar as it may be continued by statute) will cease
and the Resulting Corporation shall possess all the property, rights,
privileges, powers and franchises, and shall be subject to all the debts,
liabilities and duties of Jacor.
SECTION 2. APPROVAL. Upon the approval and adoption of this Plan by a
favorable vote of the holders of two-thirds of the outstanding shares of Jacor
common stock and by a favorable vote of the holders of a majority of New Jacor
common stock, the Board of Directors of Jacor and of New Jacor shall be
authorized to execute this Plan and related Certificates of Merger. The Merger
will be effective at the close of business on the date on which a Certificate of
Merger is filed with the appropriate state officials in the State of Ohio and a
Certificate of Merger is filed in the State of Delaware ("Effective Time").
SECTION 3. CERTIFICATE OF INCORPORATION. From and after the Effective
Time, the Certificate of Incorporation of New Jacor in effect at the Effective
Time will become the Certificate of Incorporation of the Resulting Corporation
(the "New Certificate of Incorporation") until such time the New Certificate of
Incorporation may be further amended as provided by General Corporation Law of
the State of Delaware and by the New Certificate of Incorporation. The New
Certificate of Incorporation as it will exist on the Effective Date is attached
hereto as Exhibit A.
SECTION 4. BYLAWS. From and after the Effective Time, the Bylaws of New
Jacor, in effect at the Effective Time will become the Bylaws of the Resulting
Corporation (the "New Bylaws") until the New Bylaws may be further amended as
provided by the General Corporation Law of the State of Delaware and the New
Certificate of Incorporation. The New Bylaws as they will exist on the Effective
Date are attached hereto as Exhibit B.
SECTION 5. DIRECTORS. From and after the Effective Time, the directors of
Jacor at the Effective Time will serve as the directors of the Resulting
Corporation until their successors are duly elected or appointed and qualified
in the manner provided by Delaware law and the New Certificate of Incorporation
and the New Bylaws.
SECTION 6. OFFICERS. From and after the Effective Time, the officers of
Jacor at the Effective Time will serve as the officers of the Resulting
Corporation until their successors are duly elected or appointed in accordance
with the New Bylaws and at the pleasure of the Resulting Corporation's Board of
Directors.
A-VII-1
<PAGE>
SECTION 7. CONVERSION OF SHARES. The manner and basis of converting shares
of Jacor common stock, without par value, into shares of the Resulting
Corporation's common stock, with a par value of $.01 per share, upon the
consummation of the Merger is as follows:
7.1 All shares of common stock of New Jacor outstanding immediately prior to
the Effective Time shall be cancelled as a result of the Merger and shall
be held as treasury shares by the Resulting Corporation.
7.2 Each share of common stock of Jacor outstanding immediately prior to the
Effective Time, except shares held in Jacor's treasury which shares are
cancelled at the Effective Time, will be converted into one share of the
Resulting Corporation's common stock, so that for each share of Jacor
common stock held a Jacor stockholder will receive one share of the
Resulting Corporation's common stock.
7.3 The one-for-one exchange of shares of the Resulting Corporations' common
stock for shares of Jacor's common stock outstanding immediately prior to
the Effective Time is not subject to adjustment to take into account the
effect of any stock split, stock dividend, or other like changes with
respect to Jacor common stock occurring between the record date for Jacor
stockholders entitled to vote upon the Plan and the Effective Time.
7.4 Each outstanding option to acquire shares of Jacor common stock will be
converted upon the Effective Time into an option to acquire an equal
number of shares of the Resulting Corporation's common stock.
7.5 Each outstanding Jacor certificate which, immediately prior to the
Effective Time, represented Jacor common stock will, immediately after
the Effective Time, evidence ownership of the number of shares of the
Resulting Corporation's common stock into which the Jacor common stock
has been converted and the holder thereof will have all rights of a
holder of the Resulting Corporation's common stock, including dividends,
distributions and voting rights. It is not necessary that existing
certificates of Jacor common stock be exchanged for new certificates of
the Resulting Corporation's common stock.
SECTION 8. TERMINATION. At any time prior to the filing of the
Certificates of Merger as contemplated by this Plan, the Merger may be
terminated by the Board of Directors of either Jacor or of New Jacor
notwithstanding approval of this Plan by the stockholders of Jacor or of New
Jacor.
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be executed
in their respective corporate names by their respective officers as duly
authorized by their respective Boards of Directors and stockholders, all as the
date first above written.
ATTEST: JACOR COMMUNICATIONS,
INC.
By: __________________________________ By: __________________________________
R. Christopher Weber, SECRETARY Randy Michaels, PRESIDENT
ATTEST: NEW JACOR, INC.
By: __________________________________ By: __________________________________
R. Christopher Weber, SECRETARY Randy Michaels, PRESIDENT
A-VII-2
<PAGE>
EXHIBIT A
CERTIFICATE OF INCORPORATION
OF
NEW JACOR, INC.
----------------------------------------------------------------------------
First: The name of the Corporation is New Jacor, Inc.
Second: The address of the registered office of the Corporation is
Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle,
Delaware 19801. The name of the registered agent at that address is The
Corporation Trust Company.
Third: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware. The Corporation shall have all of the powers granted or
permitted by the laws of the State of Delaware to corporations organized under
its General Corporation Law.
Fourth: The maximum aggregate number of shares which the Corporation is
authorized to have outstanding is One Hundred Four Million (104,000,000) shares,
divided into three classes. The first class consists of One Hundred Million
(100,000,000) shares of Common Stock, with a par value of $.01 per share (the
"Common Stock"). The second class consists of Two Million (2,000,000) shares of
Class A preferred stock, with a par value of $.01 per share (the "Class A
Preferred Stock"). The third class consists of Two Million (2,000,000) shares of
Class B preferred stock, with a par value of $.01 per share (the "Class B
Preferred Stock", which together with the Class A Preferred Stock is referred to
herein as the "Preferred Stock"). The Preferred Stock is senior to the Common
Stock, and the Common Stock is subject to the rights and preferences of the
Preferred Stock as hereinafter set forth.
(a) DIVIDENDS ON COMMON STOCK. So long as any Preferred Stock shall remain
outstanding, no dividend shall be declared or paid or any distribution made on
the Common Stock or on any other class of shares junior to the Preferred Stock,
and no shares of Common Stock or of any other class junior to the Preferred
Stock shall be purchased or retired, and no moneys shall be made available for a
sinking fund for such purpose unless dividends for all past dividend periods
shall have been paid or declared (and funds for the payment thereof set apart)
on all outstanding Preferred Stock of all series. Subject to the above
provisions, and not otherwise, dividends may be paid from time to time on the
Common Stock or other junior issues out of funds legally available for the
purpose as and when declared by the Board of Directors.
(b) LIQUIDATION RIGHTS. In the event of any liquidation, dissolution, or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Preferred Stock of each series shall be entitled to be paid
in full the liquidation price fixed by the Board of Directors for the respective
series at or before the time of issuance thereof, plus an additional amount
equal to any accrued unpaid dividends. All such payments or distributions to or
among the holders of the Preferred Stock are to be made before any sum shall be
paid to or distributed among the holders of the Common Stock. Liquidation rights
of different classes or series of Preferred Stock shall be as determined by the
Board of Directors pursuant to Article Fourth, Section (f) below.
(c) VOTING RIGHTS. The holders of Common Stock and Class A Preferred Stock
shall have full voting rights (provided that, except as otherwise required by
law, the Common Stock and the Class A Preferred Stock shall vote together and
not separately). The holders of Class B Preferred Stock shall not be entitled to
vote at meetings of the shareholders of the Corporation or to receive notice of
such meetings, except as otherwise provided herein or as required by law or as
lawfully fixed by the Board of Directors with respect to each series of Class B
Preferred Stock.
A-VII-3
<PAGE>
(d) PREEMPTIVE RIGHTS. No holder of shares of Common Stock or Preferred
Stock shall be entitled as a matter of right to subscribe for or purchase any
part of any new or additional issue of shares, or securities convertible into
shares of any kind whatsoever, whether now or hereafter authorized, and whether
issued for cash, property, services, by way of dividends, or otherwise.
(e) CONVERSION. The holders of Common Stock shall have no right to convert
their shares to shares of any other class or any other series.
(f) PREFERRED STOCK. The Board of Directors is authorized, subject to any
limitations prescribed by law, to provide from time to time for the issuance of
the shares of the Class A Preferred Stock and the Class B Preferred Stock in
series, and to establish, by resolution, without shareholder approval, the
characteristics of each series including the following:
(1) SERIES. The number of shares of that series, which may
subsequently be increased or decreased (but not below the number of shares
of that series then outstanding) by resolution of the Board of Directors,
and the distinctive designation thereof;
(2) DIVIDENDS. The rights in respect of dividends on the shares of
that series, whether dividends shall be cumulative and if so, from which
date or dates and the relative rights or priority, if any, of payment of
dividends on shares of that series and any limitations, restrictions or
conditions on the payment of dividends;
(3) VOTING RIGHTS. The voting rights, if any, with respect to that
series;
(4) LIQUIDATION RIGHTS. The relative amounts, and the relative rights
or priority, if any, of payment in respect of shares of that series, which
the holders of the shares of that series shall be entitled to receive upon
any liquidation, dissolution or winding up of the Corporation;
(5) REDEMPTION. The terms and conditions (including the price or
prices, which may vary under different conditions and at different
redemption dates), if any, upon which all or any part of the shares of that
series may be redeemed, and any limitations, restrictions or conditions on
such redemption;
(6) RETIREMENT. The terms, if any, of any purchase, retirement or
sinking fund to be provided for the shares of that series;
(7) CONVERSION. The terms, if any, upon which the shares of that
series shall be convertible into or exchangeable for shares of any other
class, classes or series, or other securities, whether or not issued by the
Corporation;
(8) RESTRICTIONS ON INDEBTEDNESS. The restrictions, limitations and
conditions, if any, upon issuance of indebtedness of the Corporation so long
as any shares of that series are outstanding; and
(9) MISCELLANEOUS. Any other preferences and relative, participating,
optional or other rights and limitations of that series not inconsistent
with law, the provisions of this Section (f) or any resolution of the Board
of Directors pursuant hereto (including preferences, rights and limitations
of that series relative to the common stock or other preferred stock of the
Corporation).
Fifth: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors, or any class of them, and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code, or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement
A-VII-4
<PAGE>
and the said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of the
Corporation, as the case may be, and also on the Corporation.
Sixth: A Director of the Corporation shall not be personally liable to the
Corporation or any stockholder for monetary damages for breach of fiduciary duty
as a Director, except that this Article Sixth shall not eliminate or limit a
Director's liability (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the Director derived an improper personal benefit. If the Delaware
General Corporation Law is amended after the filing of the Certificate of
Incorporation of which this Article Sixth is a part to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
Any repeal or modification of the foregoing provisions of this Article Sixth
by the stockholders of the Corporation shall not increase the personal liability
of any Director of the Corporation for any act or occurrence taking place prior
to such repeal or modification, or otherwise adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
The Corporation shall, to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law, as amended from time to time, indemnify all
persons who are eligible for indemnification pursuant thereto. The provisions of
this Article Sixth shall not be deemed to limit or preclude indemnification of a
Director by the Corporation for any liability of a Director which has not been
eliminated by the provisions of this Article Sixth.
Seventh: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
GENERAL POWERS OF THE BOARD OF DIRECTORS. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. In addition to the powers and authority expressly conferred upon them
by status or by the Certificate of Incorporation or the Bylaws of the
Corporation, the Directors are hereby empowered to exercise all such powers and
to do such things and acts as may be exercised or done by the Corporation.
(a) ADDITIONAL POWERS OF THE BOARD OF DIRECTORS. The Board of Directors
shall have the power, without the vote or assent of the stockholders and subject
to the restrictions set forth herein and to the rights of the holders of the
Common Stock and Preferred Stock then outstanding:
(1) CERTAIN ACTS. To make, alter, amend, change, add to or repeal the
Bylaws of the Corporation; to fix and vary an amount to be reserved for any
proper purpose; to incur indebtedness and authorize and cause to be executed
mortgages and liens upon all or any part of the property of the Corporation;
to determine the use and disposition of any surplus or net profit; and to
fix the times for declaration and payment of dividends.
(2) CONTRACTS. The directors, in their discretion, may submit any
contract or act for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any contract or act
that shall be approved or be ratified by the vote of the holders of a
majority of the stock of the Corporation which is represented in person or
by proxy at such meeting and entitled to vote thereat (provided that a
lawful quorum of stockholders be there represented in person or by proxy)
shall be as valid and binding upon the Corporation and upon all the
stockholders as though it had been approved or ratified by every stockholder
of the Corporation, whether or not the contract or act would otherwise be
open to attack because of directors' interest or for any other reason.
A-VII-5
<PAGE>
Eighth: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by law, and all rights and powers conferred herein on
stockholders, directors and officers are subject to this reserved power.
Ninth: Notwithstanding any other provision of this Certificate of
Incorporation to the contrary, outstanding shares of stock of the Corporation
shall always be subject to redemption by the Corporation, by action of the Board
of Directors, if in the judgment of the Board of Directors such action should be
taken, pursuant to Section 151(b) of the Delaware General Corporation Law or any
other applicable provision of law, to the extent necessary to prevent the loss
or secure the reinstatement of any license or franchise from any governmental
agency held by the Corporation or any of its subsidiaries to conduct any portion
of the business of the Corporation or any of its subsidiaries, which license or
franchise is conditioned upon some or all of the holders of the Corporation's
stock meeting prescribed qualifications and/or restrictions. The terms and
conditions of such redemption shall be as follows:
(a) the redemption price of the shares to be redeemed pursuant to this
Article Ninth shall be determined by the Board of Directors and shall be at
least equal to the lesser of (i) the Fair Market Value or (ii) if such stock was
purchased by such Disqualified Holder within one year of the Redemption Date,
such Disqualified Holder's purchase price for such shares;
(b) the redemption price of such shares may be paid in cash, Redemption
Securities or any combination thereof;
(c) if less than all the shares held by Disqualified Holders are to be
redeemed, the shares to be redeemed shall be selected in such manner as shall be
determined by the Board of Directors, which may include selection first of the
most recently purchased shares thereof, selection by lot or selection in any
other manner determined by the Board of Directors;
(d) at least 30 days' written notice of the Redemption Date shall be given
to the record holders of the shares selected to be redeemed (unless waived in
writing by any such holder), provided that the Redemption Date may be the date
on which written notice shall be given to record holders if the cash or
Redemption Securities necessary to effect the redemption shall have been
deposited in trust for the benefit of such record holders and subject to
immediate withdrawal by them upon surrender of the stock certificates for their
shares to be redeemed;
(e) from and after the Redemption Date, any and all rights of whatever
nature, which may be held by the owners of shares selected for redemption
(including without limitation any rights to vote or participate in dividends
declared on stock of the same class or series as such shares), shall cease and
terminate and they shall thenceforth be entitled only to receive the cash or
Redemption Securities payable upon redemption; and
(f) such other terms and conditions as the Board of Directors shall
determine.
For purposes of this Article Ninth:
(i) "Disqualified Holder" shall mean any holder of shares of stock of
the Corporation whose holding of such stock, either individually or when
taken together with the holding of shares of stock of the Corporation by any
other holders, may result, in the judgment of the Board of Directors, in the
loss of, or the failure to secure the reinstatement of, any license or
franchise from any governmental agency held by the Corporation or any of its
subsidiaries to conduct any portion of the business of the Corporation or
any of its subsidiaries.
(ii) "Fair Market Value" of a share of the Corporation's stock of any
class or series shall mean the average Closing Price for such a share for
each of the 45 most recent days on which shares of stock of such class or
series shall have been traded preceding the day on which notice of
redemption shall be given pursuant to paragraph (d) of this Article Ninth;
PROVIDED, HOWEVER, that if shares of stock of such class or series are not
traded on any securities exchange or in the over-the-counter market, "Fair
Market Value" shall be determined by the Board of Directors in good faith.
"Closing Price" on any day means the reported closing sales price or, in
case no such sale takes place, the average of the reported closing
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bid and asked prices on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing sales price or bid quotation for such stock on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such prices or quotations are available, the
fair market value on the day in question as determined by the Board of
Directors.
(iii) "Redemption Date" shall mean the date fixed by the Board of
Directors for the redemption of any shares of stock of the Corporation
pursuant to this Article Ninth.
(iv) "Redemption Securities" shall mean any debt or equity securities of
the Corporation, any of its subsidiaries or any other corporation, or any
combination thereof, having such terms and conditions as shall be approved
by the Board of Directors and which, together with any cash to be paid as
part of the redemption price, in the opinion of any nationally recognized
investment banking firm selected by the Board of Directors (which may be a
firm which provides other investment banking, brokerage or other services to
the Corporation), has a value, at the time notice of redemption is given
pursuant to paragraph (d) of this Article Ninth, at least equal to the price
required to be paid pursuant to paragraph (a) of this Article Ninth
(assuming, in the case of Redemption Securities to be publicly traded, such
Redemption Securities were fully distributed and subject only to normal
trading activity).
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EXHIBIT B
BYLAWS OF
NEW JACOR, INC.
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ARTICLE 1
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETING. An annual meeting of the stockholders, for the
election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Board of
Directors shall each year fix, which date shall be within thirteen (13) months
of the last annual meeting of stockholders or, if no such meeting has been held,
the date of incorporation.
SECTION 1.2 SPECIAL MEETINGS. Special meetings of the stockholders, for any
purpose or purposes prescribed in the notice of the meeting, may be called by
one-third (1/3) of the directors then in office (rounded up to the nearest whole
number), by the chief executive officer, or by stockholders holding at least ten
percent (10%) of all issued and outstanding stock entitled to vote at the
meeting. A Special meeting may not be called by any other person or persons. No
business other than that described in the notice of the special meeting may be
transacted at a special meeting of stockholders.
SECTION 1.3 PLACE OF MEETINGS. Annual and special meetings of Stockholders
shall be held at the principal office of the corporation in the City of
Cincinnati, Ohio, or at any other reasonably convenient location, either within
or without the State of Ohio, to be designated by the Board of Directors.
SECTION 1.4 NOTICE OF MEETINGS. Written notice of the place, date, and time
of all meetings of the stockholders shall be given, not less than ten (10) nor
more than sixty (60) days before the date on which the meeting is to be held, to
each stockholder entitled to vote at such meeting, except as otherwise provided
herein or required by law (meaning, here and hereinafter, as required from time
to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
SECTION 1.5 QUORUM. At any meeting of the stockholders, the holders of a
majority of all of the shares of the stock entitled to vote at the meeting,
present in person or by proxy, shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number may be
required by law. Where a separate vote by a class or classes is required, a
majority of the shares of such class or classes present in person or represented
by proxy shall constitute a quorum entitled to take action with respect to that
vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting or
the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.
SECTION 1.6 ORGANIZATION. Such person as the Board of Directors may have
designated or, in the absence of such a person, the chief executive officer of
the Corporation or, in his or her absence, such person as may be chosen by the
holders of a majority of the shares entitled to vote who are present, in person
or by
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proxy, shall call to order any meeting of the stockholders and act as chairman
of the meeting. In the absence of the Secretary of the Corporation, the
secretary of the meeting shall be such person as the chairman appoints.
SECTION 1.7 CONDUCT OF BUSINESS. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him or her in order. The date and time of the opening and
closing of the polls for each matter upon which the stockholders will vote at
the meeting shall be announced at the meeting.
SECTION 1.8 PROXIES AND VOTING. At any meeting of the stockholders, every
stockholder entitled to vote may vote in person or by proxy authorized by an
instrument in writing or by a transmission permitted by law filed in accordance
with the procedure established for the meeting. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefore by a stockholder entitled to vote or by his or her proxy, a
stock vote shall be taken. Every stock vote shall be taken by ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
The Corporation may, and to the extent required by law, shall, in advance of any
meeting of stockholders, appoint one or more inspectors to act at the meeting
and make a written report thereof. The Corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting may, and to the extent required by law, shall, appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his ability. Every vote taken by ballots shall be counted by an
inspector or inspectors appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast affirmatively or negatively.
SECTION 1.9 STOCK LIST. A complete list of stockholders entitled to vote at
any meeting of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the number of shares
registered in his or her name, shall be open to the examination of any such
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the place
where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
SECTION 1.10 CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action
required to be taken at any annual or special meeting of stockholders of the
Corporation, or any action which may be taken at any annual or special meeting
of the stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Corporation by delivery to its
registered office in Delaware, or its principal place of business, or an officer
or agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be made by hand or by certified or registered mail,
return receipt requested.
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Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the date
of the earliest dated consent delivered to the Corporation, a written consent or
consents signed by a sufficient number of holders to take action are delivered
to the Corporation in the manner prescribed in the first paragraph of this
Section 1.10.
ARTICLE 2
BOARD OF DIRECTORS
SECTION 2.1 NUMBER AND TERM OF OFFICE. The number of directors who shall
constitute the whole Board shall be such number as the Board of Directors shall
from time to time have designated, except that in the absence of any such
designation, such number shall be seven (7). Each director shall be elected for
a term of one year and until his or her successor is elected and qualified,
except as otherwise provided herein or required by law.
Whenever the authorized number of directors is increased between annual
meetings of the stockholders, a majority of the directors then in office shall
have the power to elect such new directors for the balance of a term and until
their successors are elected and qualified. Any decrease in the authorized
number of directors shall not become effective until the expiration of the term
of the directors then in office unless, at the time of such decrease, there
shall be vacancies on the board which are being eliminated by the decrease.
SECTION 2.2 VACANCIES. If the office of any director becomes vacant by
reason of death, resignation, disqualification, removal or other cause, a
majority of the directors remaining in office, although less than a quorum, may
elect a successor for the unexpired term and until his or her successor is
elected and qualified. A resignation from the Board of Directors shall be deemed
to take effect upon its receipt by the Secretary unless some other effective
time is specified therein.
SECTION 2.3 REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such place or places, on such date or dates, and at such time
or times as shall have been established by the Board of Directors and publicized
among all directors. A notice of each regular meeting shall not be required.
SECTION 2.4 SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by two of the directors then in office or by the chief executive
officer and shall be held on such date, and at such time as they or he or she
shall fix. Notice of the place, date, and time of each such special meeting
shall be given each director by whom it is not waived by mailing written notice
not less than seven (7) days before the meeting or by telegraphing or telexing
or by facsimile transmission of the same not less than twenty-four (24) hours
before the meeting. Unless otherwise indicated in the notice thereof, any and
all business may be transacted at a special meeting.
SECTION 2.5 PLACE OF MEETINGS OF BOARD OF DIRECTORS. All meetings of the
Board of Directors shall be held at the principal office of the corporation in
the City of Cincinnati, Ohio, or at such other reasonably convenient location,
either within or without the State of Ohio, as the Board may designate from time
to time and as may be specified in the notice thereof.
SECTION 2.6 QUORUM. At any meeting of the Board of Directors, a majority of
the total number of the whole Board shall constitute a quorum for all purposes.
If a quorum shall fail to attend any meeting, a majority of those present may
adjourn the meeting to another place, date, or time, without further notice or
waiver thereof.
SECTION 2.7 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of
the Board of Directors, or of any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
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SECTION 2.8 CONDUCT OF BUSINESS. At any meeting of the Board of Directors,
business shall be transacted in such order and manner as the Board may from time
to time determine, and all matters shall be determined by the vote of a majority
of the directors present, except as otherwise provided herein or required by
law. Action may be taken by the Board of Directors without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
SECTION 2.9 POWERS. The Board of Directors may, except as otherwise
required by law, exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:
2.9.1 To declare dividends from time to time in accordance with law;
2.9.2 To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
2.9.3 To authorize the creation, making and issuance, in such form as it
may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things
necessary in connection therewith;
2.9.4 To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any
officer upon any other person for the time being;
2.9.5 To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and
agents;
2.9.6 To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers,
employees and agents of the Corporation and its subsidiaries as it
may determine;
2.9.7 To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
2.9.8 To adopt from time to time regulations, not inconsistent with
these Bylaws, for the management of the Corporation's business and
affairs.
SECTION 2.10 COMPENSATION OF DIRECTORS. Directors, as such, may receive,
pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.
ARTICLE 3
COMMITTEES
SECTION 3.1 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors,
by a vote of a majority of the whole Board, may from time to time designate
committees of the Board, with such lawfully delegable powers and duties as it
thereby confers, to serve at the pleasure of the Board and shall, for those
committees and any others provided for herein, elect a director or directors to
serve as the member or members, designating, if it desires, other directors as
alternate members who may replace any absent or disqualified member at any
meeting of the committee. Any committee so designated may exercise the power and
authority of the Board of Directors to declare a dividend, to authorize the
issuance of stock or to adopt a certificate of ownership and merger pursuant to
Section 253 of the Delaware General Corporation Law if the resolution which
designates the committee or a supplemental resolution of the Board of Directors
shall so provide. In the absence or disqualification of any member of any
committee and any alternate member in his or her place, the member or members of
the committee present at the meeting and not disqualified from voting, whether
or not he or she or they constitute a quorum, may by unanimous vote appoint
another member of the Board of Directors to act at the meeting in the place of
the absent or disqualified member.
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SECTION 3.2 CONDUCT OF BUSINESS. Each committee may determine the
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to members of all meetings;
one-third (1/3) of the members shall constitute a quorum unless the committee
shall consist of one (1) or two (2) members, in which event one (1) member shall
constitute a quorum; and all matters shall be determined by a majority vote of
the members present. Action may be taken by any committee without a meeting if
all members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of such committee.
ARTICLE 4
OFFICERS
SECTION 4.1 GENERALLY. The officers of the Corporation shall consist of a
Chairman of the Board, a President, one or more Vice Presidents, a Secretary, a
Treasurer and such other officers as may from time to time be appointed by the
Board of Directors. Officers shall be elected by the Board of Directors, which
shall consider that subject at its first meeting after every annual meeting of
stockholders. Each officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
number of offices may be held by the same person.
SECTION 4.2 CHAIRMAN OF THE BOARD. The Chairman of the Board, if one be
elected, shall preside at all meetings of the Board of Directors and shall have
such other powers and duties as may be prescribed by the Board of Directors.
SECTION 4.3 PRESIDENT. The President shall be the chief executive officer
of the Corporation. Subject to the provisions of these Bylaws and to the
direction of the Board of Directors, he or she shall have the responsibility for
the general management and control of the business and affairs of the
Corporation and shall perform all duties and have all powers which are commonly
incident to the office of chief executive or which are delegated to him or her
by the Board of Directors. He or she shall have power to sign all stock
certificates, contracts and other instruments of the Corporation which are
authorized and shall have general supervision and direction of all of the other
officers, employees and agents of the Corporation.
SECTION 4.4 VICE PRESIDENT. Each Vice President shall have such powers and
duties as may be delegated to him or her by the Board of Directors. One (1) Vice
President shall be designated by the Board to perform the duties and exercise
the powers of the President in the event of the President's absence or
disability.
SECTION 4.5 TREASURER. The Treasurer shall have the responsibility for
maintaining the financial records of the Corporation. He or she shall make such
disbursements of the funds of the Corporation as are authorized and shall render
from time to time an account of all such transactions and of the financial
condition of the Corporation. The Treasurer shall also perform such other duties
as the Board of Directors may from time to time prescribe.
SECTION 4.6 SECRETARY. The Secretary shall issue all authorized notices
for, and shall keep minutes of, all meetings of the stockholders and the Board
of Directors. He or she shall have charge of the corporate books and shall
perform such other duties as the Board of Directors may from time to time
prescribe.
SECTION 4.7 DELEGATION OF AUTHORITY. The Board of Directors may from time
to time delegate the powers or duties of any officer to any other officers or
agents, notwithstanding any provision hereof.
SECTION 4.8 REMOVAL. Any officer of the Corporation may be removed at any
time, with or without cause, by the Board of Directors.
SECTION 4.9 ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS. Unless
otherwise directed by the Board of Directors, the President or any officer of
the Corporation authorized by the President shall have power to vote and
otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of
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stockholders of or with respect to any action of stockholders of any other
corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other corporation.
ARTICLE 5
STOCK
SECTION 5.1 CERTIFICATES OF STOCK. Each stockholder shall be entitled to a
certificate signed by, or in the name of the Corporation by, the President or a
Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer
or an Assistant Treasurer, certifying the number of shares owned by him or her.
Any or all of the signatures on the certificate may be by facsimile.
SECTION 5.2 TRANSFERS OF STOCK. Transfers of stock shall be made only upon
the transfer books of the Corporation kept at an office of the Corporation or by
transfer agents designated to transfer shares of the stock of the Corporation.
Except where a certificate is issued in accordance with Section 4 of these
Bylaws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
SECTION 5.3 RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders, or
to receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date on
which the resolution fixing the record date is adopted and which record date
shall not be more than sixty (60) nor less than ten (10) days before the date of
any meeting of stockholders, nor more than sixty (60) days prior to the time for
such other action as hereinbefore described; provided, however, that if no
record date for determining stockholders shall be at the close of business on
the day next preceding the day on which notice is given or, if notice is waived,
at the close of business on the day next preceding the day on which the meeting
is held, and, for determining stockholders entitled to receive payment of any
dividend or other distribution or allotment of rights or to exercise any rights
of change, conversion or exchange of stock or for any other purpose, the record
date shall be at the close of business on the day on which the Board of
Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall be not more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by the Board of Directors and no prior action by the Board of Directors is
required by the Delaware General Corporation Law, the record date shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in the manner prescribed by
Section 1.10 hereof. If no record date has been fixed by the Board of Directors
and prior action by the Board of Directors is required by the Delaware General
Corporation Law with respect to the proposed action by written consent of the
stockholders, the record date for determining stockholders entitled to consent
to corporate action in writing shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action.
SECTION 5.4 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event of the
loss, theft or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of Directors
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may establish concerning proof of such loss, theft or destruction and concerning
the giving of a satisfactory bond or bonds of indemnity.
SECTION 5.5 REGULATIONS. The issue, transfer, conversion and registration
of certificates of stock shall be governed by such other regulations as the
Board of Directors may establish.
ARTICLE 6
NOTICES
SECTION 6.1 NOTICES. Except as otherwise specifically provided herein or
required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the mails, postage paid, or by sending such notice by pre-paid
telegram or mailgram. Any such notice shall be addressed to such stockholder,
director, office, employee or agent at his or her last known address as the same
appears on the books of the Corporation. The time when such notice is received,
if hand delivered, or dispatched, if delivered through the mails or by telegram
or mailgram, shall be the time of the giving of the notice.
SECTION 6.2 WAIVERS. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer, employee
or agent. Neither the business nor the purpose of any meeting need be specified
in such a waiver.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 FACSIMILE SIGNATURES. In addition to the provisions for use of
facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
SECTION 7.2 CORPORATE SEAL. The Board of Directors may, but need not,
provide a suitable seal, containing the name of the Corporation, which seal
shall be in the charge of the Secretary. If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used by
the Treasurer or by an Assistant Secretary or Assistant Treasurer.
SECTION 7.3 RELIANCE UPON BOOKS, REPORTS AND RECORDS. Each director, each
member of any committee designated by the Board of Directors, and each officer
of the Corporation shall, in the performance of his or her duties, be fully
protected in relying in good faith upon the books of account or other records of
the Corporation and upon such information, opinions, reports or statements
presented to the Corporation by any of its officers or employees or committees
of the Board of Directors so designated, or by any other person as to matters
which such director or committee member reasonably believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
SECTION 7.4 FISCAL YEAR. The fiscal year of the Corporation shall be as
fixed by the Board of Directors.
SECTION 7.5 TIME PERIODS. In applying any provision of these Bylaws which
requires that an act be done or not be done a specified number of days prior to
an event or that an act be done during a period of a specified number of days
prior to an event, calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.
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ARTICLE 8
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 8.1 RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director or an officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
here-after be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; provided, however, that, except as provided in Section 8.3
with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
SECTION 8.2 RIGHT TO ADVANCEMENT OF EXPENSES. The right to indemnification
conferred in Section 8.1 shall include the right to be paid by the Corporation
the expenses (including attorney's fees) incurred in defending any such
proceeding in advance of its final disposition (hereinafter an "advancement of
expenses"); provided, however, that, if the Delaware General Corporation Law
requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is not further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not entitled
to be indemnified for such expenses under this Section 8.2 or otherwise. The
rights to indemnification and to the advancement of expenses conferred in
Section 8.1 and Section 8.2 of this ARTICLE 8 shall be contract rights and such
rights shall continue as to an indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the indemnitee's
heirs, executors and administrators.
SECTION 8.3 RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 8.1
or 8.2 of this ARTICLE 8 is not paid in full by the Corporation within sixty
(60) days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall be entitled to be paid also to the expense of prosecuting or defending
such suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable
A-VII-15
<PAGE>
standard of conduct, shall create a presumption that the indemnitee has not met
the applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
ARTICLE 8 or otherwise shall be on the Corporation.
SECTION 8.4 NON-EXCLUSIVITY OF RIGHTS; HEIRS. The right to indemnification
and to the advancement of expenses conferred in this ARTICLE 8 shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Corporation's Certificate of Incorporation, Bylaws,
agreement, vote of stockholder or disinterested directors or otherwise, and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
SECTION 8.5 INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
SECTION 8.6 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this ARTICLE 8 with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
ARTICLE 9
AMENDMENTS
These Bylaws may be amended or repealed by the Board of Directors at any
meeting or by the stockholders at any meeting.
A-VII-16
<PAGE>
ANNEX VIII
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SECTION 1701.81 ORC APPROVED --------------
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DATE ------------------
FEE --------------------
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CERTIFICATE OF MERGER
MERGING
JACOR COMMUNICATIONS, INC.
(AN OHIO CORPORATION)
CHARTER NO.
INTO
NEW JACOR, INC.
(A DELAWARE CORPORATION)
CHARTER NO.
Randy Michaels, President, and R. Christopher Weber, Secretary, of Jacor
Communications, Inc., and Randy Michaels, President, and R. Christopher Weber,
Secretary, of New Jacor, Inc. (such entities hereinafter each referred to
separately as a "Constituent Corporation" and collectively referred to as
"Constituent Corporations"), do hereby certify the following:
1. The name and state of formation of each Constituent Corporation is:
JACOR COMMUNICATIONS, INC.
(an Ohio corporation)
Charter No.
NEW JACOR, INC.
(an Delaware corporation)
Charter No.
2. The Constituent Corporations have approved a Plan and Agreement of
Merger under which Jacor Communications, Inc. shall be merged into New
Jacor, Inc., and New Jacor, Inc. shall be the surviving corporation
(hereinafter sometimes referred to as the "Surviving Corporation").
3. The name of the Surviving Corporation shall be:
JACOR COMMUNICATIONS, INC.
4. The Constituent Corporations have complied with all of the laws
under which they exist and such laws permit this merger.
5. The name and mailing address of the person or entity that will
provide a copy of the Plan and Agreement of Merger in response to any
written request made by any shareholder or other equity holder of either
Constituent Corporation is:
R. Christopher Weber, Secretary
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
6. This merger shall be effective on , 1996.
7. The Plan and Agreement of Merger has been duly authorized by each
Constituent Corporation and the persons who have executed this Certificate
have been duly authorized.
A-VIII-1
<PAGE>
IN WITNESS WHEREOF, each Constituent Corporation has caused this Certificate
of Merger to be signed by its duly authorized officers this day of
, 1996.
JACOR COMMUNICATIONS, INC.
By:
-----------------------------------
Randy Michaels, PRESIDENT
And:
----------------------------------
R. Christopher Weber, SECRETARY
NEW JACOR, INC.
By:
-----------------------------------
Randy Michaels, PRESIDENT
And:
----------------------------------
R. Christopher Weber, SECRETARY
A-VIII-2
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
JACOR COMMUNICATIONS, INC.
INTO
NEW JACOR, INC.
(PURSUANT TO SECTION 253 OF THE GENERAL
CORPORATION LAW OF DELAWARE)
New Jacor, Inc., a Delaware corporation ("Subsidiary"), does hereby certify:
FIRST: That Subsidiary is incorporated pursuant to the General Corporation
Law of the State of Delaware.
SECOND: That Jacor Communications, Inc., an Ohio corporation ("Parent") owns
all of the outstanding shares of each class of the capital stock of
Subsidiary.
THIRD: That Subsidiary, by the following resolutions of its Board of
Directors, duly adopted on the day of , 1996, determined that
Parent should be merged into Subsidiary on the conditions set forth in such
resolutions:
RESOLVED: That Jacor Communication, Inc. ("Parent") merge itself into its
subsidiary, New Jacor, Inc. ("Subsidiary"), and that Subsidiary shall
assume all of Parent's liabilities and obligations;
FURTHER RESOLVED: That the President and the Secretary of Subsidiary be
and they hereby are directed to make, execute and acknowledge a
certificate of ownership and merger setting forth a copy of the
resolution to merge Parent into Subsidiary and to assume Parent's
liabilities and obligations and the date of adoption thereof and to file
the same in the office of the Secretary of State of Delaware and a
certified copy thereof in the Office of the Recorder of Deeds of New
Castle County, and to do all acts and things whatever, whether within or
without the State of Delaware, as may be necessary and proper to effect
the merger.
IN WITNESS WHEREOF, New Jacor, Inc., has caused its corporate seal to be
affixed and this certificate to be signed by Randy Michaels, its President, and
R. Christopher Weber, its Secretary, this day of , 1996.
NEW JACOR, INC.
By:
-----------------------------------
Randy Michaels, PRESIDENT
By:
-----------------------------------
R. Christopher Weber, SECRETARY
A-VIII-3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1 of Article VI of the Registrant's Amended and Restated Code of
Regulations (the "Code of Regulations") generally provides that each of the
Registrant's directors, officers and employees is entitled to be indemnified
from personal liability to the fullest extent permitted by Ohio law, Section
1701.13 of the Ohio Revised Code permits a corporation to indemnify its
officers, directors and employees (other than in certain cases involving bad
faith, negligence or misconduct) from and against any and all claims and
liabilities to which he or she may become subject by reason of his or her
position, or acts or commissions in such position, including reasonable costs of
defense and settlements (except in connection with shareholder derivative suits,
where indemnification is limited to the costs of defense). Ohio law also permits
corporations to provide broader indemnification than that provided by statute.
Pursuant to authority contained in its Code of Regulations, the Registrant
maintains in force a standard directors' and officers' liability insurance
policy providing coverage of $10,000,000 against liability incurred by any
director or officer in his or her capacity as such.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
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2.1 Form of Plan and Agreement of Merger between the Registrant and New Jacor, Inc.
(attached as Annex VII to the Proxy Statement/Information Statement/Prospectus in this
Registration Statement). *
2.2 Agreement and Plan of Merger dated February 12, 1996 (the "Merger Agreement") among
Citicasters Inc., the Registrant and JCAC, Inc. Incorporated by reference to Exhibit
2.1 to the Registrant's Current Report on Form 8-K dated February 27, 1991. *
2.3 Stockholders Agreement dated February 12, 1996 among the Registrant, JCAC, Inc., Great
American Insurance Company, American Financial Corporation, American Financial
Enterprises, Inc., Carl H. Lindner, The Carl H. Lindner Foundation and S. Craig
Lindner. Incorporated by reference to Exhibit 2.2 to the Registrant's Current Report
on Form 8-K dated February 27, 1996. *
2.4 Jacor Shareholders Agreement dated February 12, 1996 among Citicasters Inc. and
Zell/Chilmark Fund L.P. Incorporated by reference to Exhibit 2.3 to the Registrant's
Current Report on Form 8-K dated February 27, 1996. *
2.5 Escrow Agreement among the Registrant, Citicasters Inc. and PNC Bank dated March 13,
1996. Incorporated by reference to Exhibit 2.4 to the Registrant's Form S-3
Registration Statement dated March 22, 1996. *
2.6 Irrevocable Letter of Credit, Banque Paribas, Chicago Branch dated March 13, 1996.
Incorporated by reference to Exhibit 2.5 to the Registrant's Form S-3 Registration
Statement dated March 22, 1996. *
2.7 Letter of Credit and Reimbursement Agreement by and between the Registrant and Banque
Paribas dated March 13, 1996. Incorporated by reference to Exhibit 2.5 to the
Registrant's Form S-3 Registration Statement dated March 22, 1996. *
</TABLE>
II-1
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2.8 Form of Employment Continuation Agreement (executive officer form) between Citicasters
Inc. and [executive officer] (referred to as exhibit 6.6(c)(i) in Merger Agreement).
Incorporated by reference to Exhibit 2.5 to the Registrant's Current Report on Form
8-K dated February 27, 1996. *
2.9 Form of Employment Continuation Agreement (management form) between Citicasters Inc.
and [manager] (referred to as exhibit 6.6(c)(ii) in Merger Agreement). Incorporated by
reference to Exhibit 2.6 to the Registrant's Current Report on Form 8-K dated February
27, 1996. *
2.10 Form of Warrant Agreement between the Registrant, and KeyCorp Shareholder Services,
Inc. as warrant agent (referred to as exhibit 3.1 in Merger Agreement). Incorporated
by reference to Exhibit 2.7 to the Registrant's Current Report on Form 8-K dated
February 27, 1996. *
2.11 Stock Purchase and Stock Warrant Redemption Agreement dated as of February 20, 1996
among the Registrant, Prudential Venture Partners II, L.P., Northeast Ventures, II,
John T. Lynch, Frank A. DeFrancesco, Thomas R. Jiminez, William R. Arbenz, CIHC,
Incorporated, Bankers Life Holding Corporation and Noble Broadcast Group, Inc.
("Noble") (omitting exhibits not deemed material or filed separately in executed
form). [Prudential and Northeast are sometimes referred to hereafter as the "Class A
Shareholders"; Lynch, DeFrancesco, Jiminez and Arbenz as the "Class B Shareholders";
and CIHC and Bankers Life as the Warrant Sellers.]. Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
2.12 Investment Agreement dated as of February 20, 1996 among the Registrant, Noble and the
Class B Shareholders (omitting exhibits not deemed material). Incorporated by
reference to Exhibit 2.2 to the Registrant's Current Report on Form 8-K dated March 6,
1996, as amended. *
2.13 Warrant to Purchase Class A Common Stock of Noble issued to the Registrant.
Incorporated by reference to Exhibit 2.3 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
2.14 Indemnification and Escrow Agreement dated as of February 20, 1996 among the
Registrant, Noble, the Class A Shareholders, the Class B Shareholders, the Warrant
Sellers, The Fifth Third Bank and Conseco, Inc. Incorporated by reference to Exhibit
2.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.15 Stock Escrow and Security Agreement dated as of February 20, 1996 among the Registrant,
Noble, the Class B Shareholders, Philip H. Banks, as trustee, and The Fifth Third
Bank, as escrow agent (omitting exhibits not deemed material or filed separately in
executed form). Incorporated by reference to Exhibit 2.5 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended. *
</TABLE>
II-2
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2.16 Trust Agreement dated as of February 20, 1996 among the Class B Shareholders and their
spouses, and Philip H. Banks, as trustee. Incorporated by reference to Exhibit 2.6 to
the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.17 Registration Rights Agreement dated as of February 20, 1996 between the Registrant and
Noble. Incorporated by reference to Exhibit 2.7 to the Registrant's Current Report on
Form 8-K dated March 6, 1996, as amended. *
2.18 Asset Purchase Agreement dated as of February 20, 1996 among Chesapeake Securities,
Inc. (a Registrant subsidiary), Noble Broadcast of San Diego, Inc., Sports Radio, Inc.
and Noble Broadcast Center, Inc. Incorporated by reference to Exhibit 2.7 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.19 Jacor -- CMM Limited Partnership Agreement dated January 1, 1994, by and between Jacor
Cable, Inc., Up Your Ratings, Inc. and the Registrant. Incorporated by reference to
Exhibit 2.2 of the Registrant's Annual Report on Form 10-K dated March 30, 1995. *
2.20 Amendment No. 1 to Jacor -- CMM Limited Partnership Agreement of Limited Partnership
dated July 22, 1994, by and between Jacor Cable, Inc., Up Your Ratings, Inc. and the
Registrant to amend the Jacor -- CMM Limited Partnership dated January 1, 1994.
Incorporated by reference to Exhibit 2.3 of the Registrant's Annual Report on Form
10-K dated March 30, 1995. *
2.21 Amendment No. 2 to Jacor -- CMM Limited Partnership Agreement of Limited Partnership
with an effective date as of January 1, 1994, by and between Jacor Cable, Inc., Up
Your Ratings, Inc. and the Registrant to amend the Jacor -- CMM Limited Partnership
Agreement of Limited Partnership dated January 1, 1994. Incorporated by reference to
Exhibit 2.4 of the Registrant's Annual Report on Form 10-K dated March 30, 1995. *
3.1 The Registrant's Amended and Restated Articles of Incorporation. Incorporated by
reference to Exhibit 3 of the Registrant's Quarterly Report on Form 10-Q dated August
10, 1995. *
3.2 The Registrant's Amended and Restated Code of Regulations. Incorporated by reference to
Exhibit 3 of the Registrant's Quarterly Report on Form 10-Q dated July 29, 1994. *
4.1 Specimen Common Stock Certificate. Incorporated by reference to Exhibit 2.1 to the
Registrant's Form 8-A, dated January 12, 1993. *
4.2 Credit Agreement dated as of February 20, 1996, among the Registrant, the Banks named
therein, Banque Paribas, as Agent, and the The First National Bank of Boston and Bank
of America Illinois, as Co-Agents (omitting exhibits not deemed material or filed
separately in executed form). Incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
</TABLE>
II-3
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<TABLE>
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4.3 Revolving A Note in favor of Banque Paribas by the Registrant dated as of February 20,
1996.(1) Incorporated by reference to Exhibit 4.2 to the Registrant's Current Report
on Form 8-K dated March 6, 1996, as amended. *
4.4 Revolving B Note in favor of Banque Paribas by the Registrant dated as of February 20,
1996.(1) Incorporated by reference to Exhibit 4.3 to the Registrant's Current Report
on Form 8-K dated March 6, 1996, as amended. *
4.5 Security Agreement dated as of February 20, 1996 among the Registrant, Banque Paribas,
as Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to
Exhibit 4.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.6 Pledge Agreement dated as of February 20, 1996 among the Registrant, Banque Paribas, as
Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to Exhibit
4.5 to the Registrant's Current Report on Form 8-K dated March, 6, 1996, as amended. *
4.7 Trademark Security Agreement dated as of February 20, 1996 among the Registrant, Banque
Paribas, as Agent, for itself, the Co-Agents and the Banks. Incorporated by reference
to Exhibit 4.6 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.8 Subsidiary Guaranty dated as of February 20, 1996, by various subsidiaries of the
Registrant in favor of Banque Paribas, as Agent, for itself, the Co-Agents and the
Banks.(2) Incorporated by reference to Exhibit 4.7 to the Registrant's Current Report
on Form 8-K dated March, 6, 1996, as amended. *
4.9 Subsidiary Security Agreement dated as of February 20, 1996, by various Company
subsidiaries in favor of Banque Paribas, as Agent, for itself, the Co-Agents and the
Banks (omitting exhibits not deemed material). (2) Incorporated by reference to
Exhibit 4.8 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.10 Primary Pledge Agreement dated as of February 20, 1996 among Chesapeake Securities,
Inc.(a subsidiary of the Registrant), Banque Paribas, as Agent, for itself, the
Co-Agents and the Banks. (3) Incorporated by reference to Exhibit 4.9 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
4.11 Secondary Pledge Agreement dated as of February 20, 1996 between the Registrant and
Chesapeake Securities, Inc. (a subsidiary of the Registrant).(4) Incorporated by
reference to Exhibit 4.10 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended. *
</TABLE>
II-4
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4.12 Subsidiary Trademark Agreement dated as of February 20, 1996 among Jacor Broadcasting
of Tampa Bay, Inc., Jacor Broadcasting of Atlanta, Inc., Jacor Broadcasting
Corporation and Jacor Broadcasting of Florida, Inc. in favor of Banque Paribas as
Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to Exhibit
4.11 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
4.13 Deed to Secure Debt and Security Agreement, dated as of February 20, 1996, by and
between Jacor Broadcasting of Atlanta, Inc., and Banque Paribas, as Agent.
Incorporated by reference to Exhibit 4.12 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
4.14 Deed of Trust and Security Agreement, dated as of February 20, 1996, between Jacor
Broadcasting of Colorado, Inc. and the Public Trustee in the County of Weld and the
State of Colorado.(6) Incorporated by reference to Exhibit 4.13 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended. *
4.15 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement, dated
February 20, 1996, by and between Jacor Broadcasting Corporation and Banque Paribas,
as Agent. (7) Incorporated by reference to Exhibit 4.14 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended. *
4.16 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement dated as of
February 20, 1996, by Jacor Broadcasting of Tampa Bay, Inc. in favor of Banque
Paribas, as Agent. (8) Incorporated by reference to Exhibit 4.15 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended. *
4.17 Deed of Trust and Security Agreement, Assignment of Leases, Rents and Profits,
Financing Statement and Fixture Filing made by Chesapeake Securities, Inc. for the
Benefit of Banque Paribas, as Agent, dated as of February 20, 1996. Incorporated by
reference to Exhibit 4.16 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended. *
4.18 Second Consolidated Amended and Restated Intercompany Demand Note issued to the Company
by various subsidiaries of the Registrant dated as of February 20, 1996. (5)
Incorporated by reference to Exhibit 4.17 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
4.19 Second Amended and Restated Intercompany Security Agreement and Financing Statement
dated as of February 20, 1996 by various subsidiaries of the Registrant in favor of
the Company (omitting exhibits not deemed material). (2) Incorporated by reference to
Exhibit 4.18 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
</TABLE>
II-5
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4.20(+) Restricted Stock Agreement dated as of June 23, 1993 between the Registrant and Rod F.
Dammeyer.(9) Incorporated by reference to Exhibit 4.2 to the Registrant's Quarterly
Report on Form 10-Q dated August 13, 1993. *
4.21(+) Stock Option Agreement dated as of June 23, 1993 between the Registrant and Rod F.
Dammeyer covering 10,000 shares of the Registrant's common stock.(10) Incorporated by
reference to Exhibit 4.3 to the Registrant's Quarterly Report on Form 10-Q dated
August 13, 1993. *
4.22(+) Stock Option Agreement dated as of December 15, 1994 between the Registrant and Rod F.
Dammeyer covering 5,000 shares of the Registrant's common stock. (11) Incorporated by
reference to Exhibit 4.23 to the Registrant's Quarterly Report on Form 10-Q dated
August 13, 1993. *
4.23 Indenture dated as of June 12, 1996 between the Registrant and The Bank of New York for
the Registrant's Liquid Yield Option Notes Due 2011.
4.24 Indenture dated as of June 12, 1996 among the Registrant, JCAC, Inc. and First Trust of
Illinois, National Association for JCAC's 10 1/8% Senior Subordinated Notes due 2006
and the Registrant's Guaranty thereof.
4.25 First Amendment and Limited Waiver to Credit Agreement dated as of June 3, 1996 by and
among the Registrant, Banque Paribas as Agent, the Co-Agents named therein, and the
Banks named therein. Incorporated by reference to Exhibit 4.23 to the Registrant's
Form S-3 Registration Statement, File No. 333-1917, as amended. *
4.26 Second Amendment to Credit Agreement dated as of June 12, 1996 by and among the
Registrant, Banque Paribas as Agent, the Co-Agents named therein, and the Banks named
therein.
4.27 Credit Agreement dated as of June 12, 1996 by and among JCAC, the Lenders named
therein, Chemical Bank, as Administrative Agent, Banque Paribas, as Documentation
Agent, and Bank of America Illinois, as Syndication Agent.
4.28 Security Agreement dated as of June 12, 1996 by and between JCAC, Inc and Chemical
Bank, as Administrative Agent.
4.29 Parent Guaranty dated as of June 12, 1996 by the Registrant in favor of Chemical Bank,
as Administrative Agent, for the Lenders and any Interest Rate Hedge Providers (each
as defined in the Credit Agreement).
4.30 Pledge Agreement dated as of June 12, 1996 by and between the Registrant and Chemical
Bank, as Administrative Agent for the Agents, the Lenders and any Interest Rate Hedge
Providers (each as defined in the Credit Agreement).
5.1 Opinion of Graydon, Head & Ritchey.
8.1 Opinion of Jones, Day, Reavis & Pogue.
</TABLE>
II-6
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10.1 Credit Agreement dated as of February 20, 1996 among Broadcast Finance, Inc. (a
Registrant subsidiary), Noble Broadcast Group, Inc. and Noble Broadcast Holdings, Inc.
(omitting exhibits not deemed material or filed separately in executed form).
Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
10.2 Subsidiary Guaranty dated as of February 20, 1996 in favor of Broadcast Finance, Inc.
by Noble Broadcast Center, Inc., Noble Broadcast of Colorado, Inc., Noble Broadcast of
St. Louis, Inc., Noble Broadcast of Toledo, Inc., Nova Marketing Group, Inc., Noble
Broadcast Licenses, Inc., Noble Broadcast of San Diego, Inc., Sports Radio, Inc. and
Sports Radio Broadcasting, Inc. Incorporated by reference to Exhibit 10.2 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
10.3 Term Note in the amount of $40,000,000 by Noble Broadcast Holdings, Inc. in favor of
Broadcast Finance, Inc., dated as of February 20, 1996. Incorporated by reference to
Exhibit 10.3 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
10.4 Revolving Note in the amount of $1,000,000 by Noble Broadcast Holdings, Inc. in favor
of Broadcast Finance, Inc. dated as of February 20, 1996. Incorporated by reference to
Exhibit 10.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
10.5 (+) Jacor Communications, Inc. 1993 Stock Option Plan. Incorporated by reference to Exhibit
99 to the Quarterly Report on Form 10-Q dated August 13, 1993. *
10.6 (+) Jacor Communications, Inc. 1995 Employee Stock Purchase Plan. Incorporated by reference
to Exhibit 4.01 to the Registration Statement on Form S-8, filed on November 9, 1994. *
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant Incorporated by reference to Exhibit 21 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
as amended. *
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3 Consent of Price Waterhouse LLP
23.4 Consent of Graydon, Head & Ritchey (included in opinion of counsel filed as Exhibit
5.1)
23.5 Consent of Jones, Day, Reavis & Pogue (included in opinion of counsel filed as Exhibit
8.1)
24 Powers of Attorney of directors and officers signing this Registration Statement are
part of the Signature Pages.
99.1 Proxy for holders of the Registrant's Common Stock.
</TABLE>
II-7
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EXHIBIT NUMBERED
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99.2 Letter to the holders of the Registrant's Common Stock (attached to Prospectus).
99.3 Notice of Annual Meeting of Shareholders of the holders of the Registrant's Common
Stock (attached to Prospectus).
99.4 Report of Equity Group Investments, Inc. presented to the Registrant's Board of
Directors on February 12, 1996.
</TABLE>
- ------------------------
(*) Incorporated by reference
(+) Management Contracts and Compensatory Arrangements
<TABLE>
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(1) Identical Notes were issued by the Company in favor of the following Banks:
The First National Bank of Boston
Bank of America Illinois
Bank of Montreal
The Bank of New York
The Bank of Nova Scotia
CIBC, Inc.
First Bank
Society National Bank
Union Bank
The aggregate principal amount of Revolving A Notes is $190 million. The aggregate
principal amount of the Revolving B Notes is $110 million.
(2) Executed by the following subsidiaries of the Registrant:
Jacor Broadcasting of Florida, Inc.
Jacor Broadcasting of Atlanta, Inc.
Jacor Broadcasting of Knoxville, Inc.
Jacor Broadcasting of Colorado, Inc.
Jacor Broadcasting of Tampa Bay, Inc.
Jacor Broadcasting of St. Louis, Inc.
Jacor Cable, Inc.
Georgia Network Equipment, Inc.
Jacor Broadcasting Corporation
Broadcast Finance, Inc.
Chesapeake Securities, Inc.
OIA Broadcasting L.L.C.
(3) An identical Primary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
(4) An identical Secondary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
(5) Such notes were issued by the subsidiaries of the Registrant identified in (2) above.
(6) A substantially similar document was entered into by Jacor Broadcasting of Colorado,
Inc. relating to real property located in Douglas County, Colorado.
</TABLE>
II-8
<PAGE>
<TABLE>
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(7) A substantially similar document was entered into by Jacor Broadcasting Corporation
relating to real property located in Hamilton County, Ohio.
(8) Substantially similar documents were entered into by Jacor of Tampa Bay, Inc. relating
to real property located in Manatee County, Florida and by Jacor Broadcasting of
Florida relating to real property located in Duval County, Florida and St. Johns
County, Florida.
(9) Substantially identical documents were entered into with John W. Alexander, F. Philip
Handy and Marc Lasry covering 20,000, 30,000 and 10,000 shares of common stock,
respectively.
(10) Identical documents were entered into with John W. Alexander, F. Philip Handy and Marc
Lasry.
(11) Identical documents were entered into with John W. Alexander, F. Philip Handy, Marc
Lasry and Sheli Z. Rosenberg.
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(2) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) That, prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(4) That, every prospectus (i) that is filed pursuant to paragraph (3)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415 thereunder, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10, 11 or 15 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-9
<PAGE>
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(8) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (Section230.424(b) of this chapter)
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(9) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF OHIO
ON THIS 21ST DAY OF JUNE 1996.
JACOR COMMUNICATIONS, INC.
By: /s/ R. Christopher Weber
-----------------------------------
R. Christopher Weber
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL
OFFICER AND SECRETARY
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW HEREBY CONSTITUTES AND APPOINTS R. CHRISTOPHER WEBER AND JON M. BERRY, OR
EITHER OF THEM, AS SUCH SIGNATORY'S TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENTS,
WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR SUCH SIGNATORY AND IN
SUCH SIGNATORY'S NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY
OR ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION
STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND ALL DOCUMENTS IN
CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO
SAID ATTORNEYS-IN-FACT AND AGENTS, FULL POWER AND AUTHORITY TO DO AND PERFORM
EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE
FOREGOING, AS FULLY AS TO ALL INTENTS AND PURPOSES AS SUCH SIGNATORY MIGHT OR
COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS, OR ANY OF THEM, OR THEIR OR HIS SUBSTITUTE OR
SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED ON JUNE 21, 1996 BY THE FOLLOWING PERSONS
IN THE CAPACITIES INDICATED.
<TABLE>
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Principal Executive Officer: Principal Financial and Accounting Officer:
/s/ Randy Michaels /s/ R. Christopher Weber
- ------------------------------------------- ---------------------------------------------
Randy Michaels R. Christopher Weber
PRESIDENT, CO-CHIEF OPERATING SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER
OFFICER AND DIRECTOR AND SECRETARY
/s/ Robert L. Lawrence /s/ Rod F. Dammeyer
- ------------------------------------------- ---------------------------------------------
Robert L. Lawrence Rod F. Dammeyer
CO-CHIEF OPERATING OFFICER AND DIRECTOR DIRECTOR
/s/ Sheli Z. Rosenberg /s/ F. Philip Handy
- ------------------------------------------- ---------------------------------------------
Sheli Z. Rosenberg F. Philip Handy
BOARD CHAIR AND DIRECTOR DIRECTOR
/s/ John W. Alexander
- ------------------------------------------- ---------------------------------------------
John W. Alexander Marc Lasry
DIRECTOR DIRECTOR
</TABLE>
II-11
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- --------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
2.1 Form of Plan and Agreement of Merger between the Registrant and New Jacor, Inc.
(attached as Annex VII to the Proxy Statement/Information Statement/Prospectus in this
Registration Statement). *
2.2 Agreement and Plan of Merger dated February 12, 1996 (the "Merger Agreement") among
Citicasters Inc., the Registrant and JCAC, Inc. Incorporated by reference to Exhibit
2.1 to the Registrant's Current Report on Form 8-K dated February 27, 1991. *
2.3 Stockholders Agreement dated February 12, 1996 among the Registrant, JCAC, Inc., Great
American Insurance Company, American Financial Corporation, American Financial
Enterprises, Inc., Carl H. Lindner, The Carl H. Lindner Foundation and S. Craig
Lindner. Incorporated by reference to Exhibit 2.2 to the Registrant's Current Report
on Form 8-K dated February 27, 1996. *
2.4 Jacor Shareholders Agreement dated February 12, 1996 among Citicasters Inc. and
Zell/Chilmark Fund L.P. Incorporated by reference to Exhibit 2.3 to the Registrant's
Current Report on Form 8-K dated February 27, 1996. *
2.5 Escrow Agreement among the Registrant, Citicasters Inc. and PNC Bank dated March 13,
1996. Incorporated by reference to Exhibit 2.4 to the Registrant's Form S-3
Registration Statement dated March 22, 1996. *
2.6 Irrevocable Letter of Credit, Banque Paribas, Chicago Branch dated March 13, 1996.
Incorporated by reference to Exhibit 2.5 to the Registrant's Form S-3 Registration
Statement dated March 22, 1996. *
2.7 Letter of Credit and Reimbursement Agreement by and between the Registrant and Banque
Paribas dated March 13, 1996. Incorporated by reference to Exhibit 2.5 to the
Registrant's Form S-3 Registration Statement dated March 22, 1996. *
2.8 Form of Employment Continuation Agreement (executive officer form) between Citicasters
Inc. and [executive officer] (referred to as exhibit 6.6(c)(i) in Merger Agreement).
Incorporated by reference to Exhibit 2.5 to the Registrant's Current Report on Form
8-K dated February 27, 1996. *
2.9 Form of Employment Continuation Agreement (management form) between Citicasters Inc.
and [manager] (referred to as exhibit 6.6(c)(ii) in Merger Agreement). Incorporated by
reference to Exhibit 2.6 to the Registrant's Current Report on Form 8-K dated February
27, 1996. *
2.10 Form of Warrant Agreement between the Registrant, and KeyCorp Shareholder Services,
Inc. as warrant agent (referred to as exhibit 3.1 in Merger Agreement). Incorporated
by reference to Exhibit 2.7 to the Registrant's Current Report on Form 8-K dated
February 27, 1996. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- --------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
2.11 Stock Purchase and Stock Warrant Redemption Agreement dated as of February 20, 1996
among the Registrant, Prudential Venture Partners II, L.P., Northeast Ventures, II,
John T. Lynch, Frank A. DeFrancesco, Thomas R. Jiminez, William R. Arbenz, CIHC,
Incorporated, Bankers Life Holding Corporation and Noble Broadcast Group, Inc.
("Noble") (omitting exhibits not deemed material or filed separately in executed
form). [Prudential and Northeast are sometimes referred to hereafter as the "Class A
Shareholders"; Lynch, DeFrancesco, Jiminez and Arbenz as the "Class B Shareholders";
and CIHC and Bankers Life as the Warrant Sellers.]. Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
2.12 Investment Agreement dated as of February 20, 1996 among the Registrant, Noble and the
Class B Shareholders (omitting exhibits not deemed material). Incorporated by
reference to Exhibit 2.2 to the Registrant's Current Report on Form 8-K dated March 6,
1996, as amended. *
2.13 Warrant to Purchase Class A Common Stock of Noble issued to the Registrant.
Incorporated by reference to Exhibit 2.3 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
2.14 Indemnification and Escrow Agreement dated as of February 20, 1996 among the
Registrant, Noble, the Class A Shareholders, the Class B Shareholders, the Warrant
Sellers, The Fifth Third Bank and Conseco, Inc. Incorporated by reference to Exhibit
2.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.15 Stock Escrow and Security Agreement dated as of February 20, 1996 among the Registrant,
Noble, the Class B Shareholders, Philip H. Banks, as trustee, and The Fifth Third
Bank, as escrow agent (omitting exhibits not deemed material or filed separately in
executed form). Incorporated by reference to Exhibit 2.5 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended. *
2.16 Trust Agreement dated as of February 20, 1996 among the Class B Shareholders and their
spouses, and Philip H. Banks, as trustee. Incorporated by reference to Exhibit 2.6 to
the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.17 Registration Rights Agreement dated as of February 20, 1996 between the Registrant and
Noble. Incorporated by reference to Exhibit 2.7 to the Registrant's Current Report on
Form 8-K dated March 6, 1996, as amended. *
2.18 Asset Purchase Agreement dated as of February 20, 1996 among Chesapeake Securities,
Inc. (a Registrant subsidiary), Noble Broadcast of San Diego, Inc., Sports Radio, Inc.
and Noble Broadcast Center, Inc. Incorporated by reference to Exhibit 2.7 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
2.19 Jacor -- CMM Limited Partnership Agreement dated January 1, 1994, by and between Jacor
Cable, Inc., Up Your Ratings, Inc. and the Registrant. Incorporated by reference to
Exhibit 2.2 of the Registrant's Annual Report on Form 10-K dated March 30, 1995. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- --------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
2.20 Amendment No. 1 to Jacor -- CMM Limited Partnership Agreement of Limited Partnership
dated July 22, 1994, by and between Jacor Cable, Inc., Up Your Ratings, Inc. and the
Registrant to amend the Jacor -- CMM Limited Partnership dated January 1, 1994.
Incorporated by reference to Exhibit 2.3 of the Registrant's Annual Report on Form
10-K dated March 30, 1995. *
2.21 Amendment No. 2 to Jacor -- CMM Limited Partnership Agreement of Limited Partnership
with an effective date as of January 1, 1994, by and between Jacor Cable, Inc., Up
Your Ratings, Inc. and the Registrant to amend the Jacor -- CMM Limited Partnership
Agreement of Limited Partnership dated January 1, 1994. Incorporated by reference to
Exhibit 2.4 of the Registrant's Annual Report on Form 10-K dated March 30, 1995. *
3.1 The Registrant's Amended and Restated Articles of Incorporation. Incorporated by
reference to Exhibit 3 of the Registrant's Quarterly Report on Form 10-Q dated August
10, 1995. *
3.2 The Registrant's Amended and Restated Code of Regulations. Incorporated by reference to
Exhibit 3 of the Registrant's Quarterly Report on Form 10-Q dated July 29, 1994. *
4.1 Specimen Common Stock Certificate. Incorporated by reference to Exhibit 2.1 to the
Registrant's Form 8-A, dated January 12, 1993. *
4.2 Credit Agreement dated as of February 20, 1996, among the Registrant, the Banks named
therein, Banque Paribas, as Agent, and the The First National Bank of Boston and Bank
of America Illinois, as Co-Agents (omitting exhibits not deemed material or filed
separately in executed form). Incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
4.3 Revolving A Note in favor of Banque Paribas by the Registrant dated as of February 20,
1996.(1) Incorporated by reference to Exhibit 4.2 to the Registrant's Current Report
on Form 8-K dated March 6, 1996, as amended. *
4.4 Revolving B Note in favor of Banque Paribas by the Registrant dated as of February 20,
1996.(1) Incorporated by reference to Exhibit 4.3 to the Registrant's Current Report
on Form 8-K dated March 6, 1996, as amended. *
4.5 Security Agreement dated as of February 20, 1996 among the Registrant, Banque Paribas,
as Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to
Exhibit 4.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.6 Pledge Agreement dated as of February 20, 1996 among the Registrant, Banque Paribas, as
Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to Exhibit
4.5 to the Registrant's Current Report on Form 8-K dated March, 6, 1996, as amended. *
4.7 Trademark Security Agreement dated as of February 20, 1996 among the Registrant, Banque
Paribas, as Agent, for itself, the Co-Agents and the Banks. Incorporated by reference
to Exhibit 4.6 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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4.8 Subsidiary Guaranty dated as of February 20, 1996, by various subsidiaries of the
Registrant in favor of Banque Paribas, as Agent, for itself, the Co-Agents and the
Banks.(2) Incorporated by reference to Exhibit 4.7 to the Registrant's Current Report
on Form 8-K dated March, 6, 1996, as amended. *
4.9 Subsidiary Security Agreement dated as of February 20, 1996, by various Company
subsidiaries in favor of Banque Paribas, as Agent, for itself, the Co-Agents and the
Banks (omitting exhibits not deemed material). (2) Incorporated by reference to
Exhibit 4.8 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.10 Primary Pledge Agreement dated as of February 20, 1996 among Chesapeake Securities,
Inc.(a subsidiary of the Registrant), Banque Paribas, as Agent, for itself, the
Co-Agents and the Banks. (3) Incorporated by reference to Exhibit 4.9 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
4.11 Secondary Pledge Agreement dated as of February 20, 1996 between the Registrant and
Chesapeake Securities, Inc. (a subsidiary of the Registrant).(4) Incorporated by
reference to Exhibit 4.10 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended. *
4.12 Subsidiary Trademark Agreement dated as of February 20, 1996 among Jacor Broadcasting
of Tampa Bay, Inc., Jacor Broadcasting of Atlanta, Inc., Jacor Broadcasting
Corporation and Jacor Broadcasting of Florida, Inc. in favor of Banque Paribas as
Agent, for itself, the Co-Agents and the Banks. Incorporated by reference to Exhibit
4.11 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
4.13 Deed to Secure Debt and Security Agreement, dated as of February 20, 1996, by and
between Jacor Broadcasting of Atlanta, Inc., and Banque Paribas, as Agent.
Incorporated by reference to Exhibit 4.12 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
4.14 Deed of Trust and Security Agreement, dated as of February 20, 1996, between Jacor
Broadcasting of Colorado, Inc. and the Public Trustee in the County of Weld and the
State of Colorado.(6) Incorporated by reference to Exhibit 4.13 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended. *
4.15 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement, dated
February 20, 1996, by and between Jacor Broadcasting Corporation and Banque Paribas,
as Agent. (7) Incorporated by reference to Exhibit 4.14 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended. *
4.16 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement dated as of
February 20, 1996, by Jacor Broadcasting of Tampa Bay, Inc. in favor of Banque
Paribas, as Agent. (8) Incorporated by reference to Exhibit 4.15 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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4.17 Deed of Trust and Security Agreement, Assignment of Leases, Rents and Profits,
Financing Statement and Fixture Filing made by Chesapeake Securities, Inc. for the
Benefit of Banque Paribas, as Agent, dated as of February 20, 1996. Incorporated by
reference to Exhibit 4.16 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended. *
4.18 Second Consolidated Amended and Restated Intercompany Demand Note issued to the Company
by various subsidiaries of the Registrant dated as of February 20, 1996. (5)
Incorporated by reference to Exhibit 4.17 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
4.19 Second Amended and Restated Intercompany Security Agreement and Financing Statement
dated as of February 20, 1996 by various subsidiaries of the Registrant in favor of
the Company (omitting exhibits not deemed material). (2) Incorporated by reference to
Exhibit 4.18 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
4.20(+) Restricted Stock Agreement dated as of June 23, 1993 between the Registrant and Rod F.
Dammeyer.(9) Incorporated by reference to Exhibit 4.2 to the Registrant's Quarterly
Report on Form 10-Q dated August 13, 1993. *
4.21(+) Stock Option Agreement dated as of June 23, 1993 between the Registrant and Rod F.
Dammeyer covering 10,000 shares of the Registrant's common stock.(10) Incorporated by
reference to Exhibit 4.3 to the Registrant's Quarterly Report on Form 10-Q dated
August 13, 1993. *
4.22(+) Stock Option Agreement dated as of December 15, 1994 between the Registrant and Rod F.
Dammeyer covering 5,000 shares of the Registrant's common stock. (11) Incorporated by
reference to Exhibit 4.23 to the Registrant's Quarterly Report on Form 10-Q dated
August 13, 1993. *
4.23 Indenture dated as of June 12, 1996 between the Registrant and The Bank of New York for
the Registrant's Liquid Yield Option Notes Due 2011.
4.24 Indenture dated as of June 12, 1996 among the Registrant, JCAC, Inc. and First Trust of
Illinois, National Association for JCAC's 10 1/8% Senior Subordinated Notes due 2006
and the Registrant's Guaranty thereof.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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<C> <S> <C>
4.25 First Amendment and Limited Waiver to Credit Agreement dated as of June 3, 1996 by and
among the Registrant, Banque Paribas as Agent, the Co-Agents named therein, and the
Banks named therein. Incorporated by reference to Exhibit 4.23 to the Registrant's
Form S-3 Registration Statement, File No. 333-1917, as amended. *
4.26 Second Amendment to Credit Agreement dated as of June 12, 1996 by and among the
Registrant, Banque Paribas as Agent, the Co-Agents named therein, and the Banks named
therein.
4.27 Credit Agreement dated as of June 12, 1996 by and among JCAC, the Lenders named
therein, Chemical Bank, as Administrative Agent, Banque Paribas, as Documentation
Agent, and Bank of America Illinois, as Syndication Agent.
4.28 Security Agreement dated as of June 12, 1996 by and between JCAC, Inc and Chemical
Bank, as Administrative Agent.
4.29 Parent Guaranty dated as of June 12, 1996 by the Registrant in favor of Chemical Bank,
as Administrative Agent, for the Lenders and any Interest Rate Hedge Providers (each
as defined in the Credit Agreement).
4.30 Pledge Agreement dated as of June 12, 1996 by and between the Registrant and Chemical
Bank, as Administrative Agent for the Agents, the Lenders and any Interest Rate Hedge
Providers (each as defined in the Credit Agreement).
5.1 Opinion of Graydon, Head & Ritchey.
8.1 Opinion of Jones, Day, Reavis & Pogue.
10.1 Credit Agreement dated as of February 20, 1996 among Broadcast Finance, Inc. (a
Registrant subsidiary), Noble Broadcast Group, Inc. and Noble Broadcast Holdings, Inc.
(omitting exhibits not deemed material or filed separately in executed form).
Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended. *
10.2 Subsidiary Guaranty dated as of February 20, 1996 in favor of Broadcast Finance, Inc.
by Noble Broadcast Center, Inc., Noble Broadcast of Colorado, Inc., Noble Broadcast of
St. Louis, Inc., Noble Broadcast of Toledo, Inc., Nova Marketing Group, Inc., Noble
Broadcast Licenses, Inc., Noble Broadcast of San Diego, Inc., Sports Radio, Inc. and
Sports Radio Broadcasting, Inc. Incorporated by reference to Exhibit 10.2 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended. *
10.3 Term Note in the amount of $40,000,000 by Noble Broadcast Holdings, Inc. in favor of
Broadcast Finance, Inc., dated as of February 20, 1996. Incorporated by reference to
Exhibit 10.3 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
10.4 Revolving Note in the amount of $1,000,000 by Noble Broadcast Holdings, Inc. in favor
of Broadcast Finance, Inc. dated as of February 20, 1996. Incorporated by reference to
Exhibit 10.4 to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- --------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
10.5 (+) Jacor Communications, Inc. 1993 Stock Option Plan. Incorporated by reference to Exhibit
99 to the Quarterly Report on Form 10-Q dated August 13, 1993. *
10.6 (+) Jacor Communications, Inc. 1995 Employee Stock Purchase Plan. Incorporated by reference
to Exhibit 4.01 to the Registration Statement on Form S-8, filed on November 9, 1994. *
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant Incorporated by reference to Exhibit 21 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
as amended. *
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3 Consent of Price Waterhouse LLP
23.4 Consent of Graydon, Head & Ritchey (included in opinion of counsel filed as Exhibit
5.1)
23.5 Consent of Jones, Day, Reavis & Pogue (included in opinion of counsel filed as Exhibit
8.1)
24 Powers of Attorney of directors and officers signing this Registration Statement are
part of the Signature Pages.
99.1 Proxy for holders of the Registrant's Common Stock.
99.2 Letter to the holders of the Registrant's Common Stock (attached to Prospectus).
99.3 Notice of Annual Meeting of Shareholders of the holders of the Registrant's Common
Stock (attached to Prospectus).
99.4 Report of Equity Group Investments, Inc. presented to the Registrant's Board of
Directors on February 12, 1996.
</TABLE>
- ------------------------
(*) Incorporated by reference
(+) Management Contracts and Compensatory Arrangements
<PAGE>
<TABLE>
<S> <C>
(1) Identical Notes were issued by the Company in favor of the following Banks:
The First National Bank of Boston
Bank of America Illinois
Bank of Montreal
The Bank of New York
The Bank of Nova Scotia
CIBC, Inc.
First Bank
Society National Bank
Union Bank
The aggregate principal amount of Revolving A Notes is $190 million. The aggregate
principal amount of the Revolving B Notes is $110 million.
(2) Executed by the following subsidiaries of the Registrant:
Jacor Broadcasting of Florida, Inc.
Jacor Broadcasting of Atlanta, Inc.
Jacor Broadcasting of Knoxville, Inc.
Jacor Broadcasting of Colorado, Inc.
Jacor Broadcasting of Tampa Bay, Inc.
Jacor Broadcasting of St. Louis, Inc.
Jacor Cable, Inc.
Georgia Network Equipment, Inc.
Jacor Broadcasting Corporation
Broadcast Finance, Inc.
Chesapeake Securities, Inc.
OIA Broadcasting L.L.C.
(3) An identical Primary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
(4) An identical Secondary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
(5) Such notes were issued by the subsidiaries of the Registrant identified in (2) above.
(6) A substantially similar document was entered into by Jacor Broadcasting of Colorado,
Inc. relating to real property located in Douglas County, Colorado.
(7) A substantially similar document was entered into by Jacor Broadcasting Corporation
relating to real property located in Hamilton County, Ohio.
(8) Substantially similar documents were entered into by Jacor of Tampa Bay, Inc. relating
to real property located in Manatee County, Florida and by Jacor Broadcasting of
Florida relating to real property located in Duval County, Florida and St. Johns
County, Florida.
(9) Substantially identical documents were entered into with John W. Alexander, F. Philip
Handy and Marc Lasry covering 20,000, 30,000 and 10,000 shares of common stock,
respectively.
(10) Identical documents were entered into with John W. Alexander, F. Philip Handy and Marc
Lasry.
(11) Identical documents were entered into with John W. Alexander, F. Philip Handy, Marc
Lasry and Sheli Z. Rosenberg.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
JACOR COMMUNICATIONS, INC.
Liquid Yield Option-TM- Notes due 2011
(Zero Coupon -- Senior)
_______________________
INDENTURE
Dated as of June 12, 1996
_______________________
The Bank of New York,
Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
-TM-Trademark of Merrill Lynch & Co., Inc.
<PAGE>
TABLE OF CONTENTS
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions......................................... 1
SECTION 1.02. Other Definitions................................... 6
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act....................................... 6
SECTION 1.04. Rules of Construction............................... 7
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating..................................... 8
SECTION 2.02. Execution and Authentication........................ 8
SECTION 2.03. Registrar, Paying Agent and Conversion
Agent............................................... 9
SECTION 2.04. Paying Agent To Hold Money and
Securities in Trust................................. 9
SECTION 2.05. Securityholder Lists............................... 10
SECTION 2.06. Transfer and Exchange.............................. 10
SECTION 2.07. Replacement Securities............................. 13
SECTION 2.08. Outstanding Securities; Determinations
of Holders' Action................................. 14
SECTION 2.09. Temporary Securities............................... 15
SECTION 2.10. Cancellation....................................... 16
SECTION 2.11. CUSIP Numbers...................................... 16
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. Right to Redeem; Notices to Trustee................ 16
SECTION 3.02. Selection of Securities to Be Redeemed............. 17
SECTION 3.03. Notice of Redemption............................... 17
SECTION 3.04. Effect of Notice of Redemption..................... 18
SECTION 3.05. Deposit of Redemption Price........................ 19
SECTION 3.06. Securities Redeemed in Part........................ 19
SECTION 3.07. Conversion Arrangement on Call for
Redemption......................................... 19
SECTION 3.08. Purchase of Securities at the Option of
the Holder ........................................ 20
SECTION 3.09. Purchase of Securities at Option of the
Holder upon Change in Control...................... 27
i
<PAGE>
SECTION 3.10. Effect of Purchase Notice or Change in Control
Purchase Notice.................................... 30
SECTION 3.11. Deposit of Purchase Price or Change in Control
Purchase Price..................................... 32
SECTION 3.12. Securities Purchased in Part....................... 32
SECTION 3.13. Covenant to Comply with Securities Laws
upon Purchase of Securities........................ 32
SECTION 3.14. Repayment to the Company........................... 33
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities.............................. 33
SECTION 4.02. SEC Reports........................................ 34
SECTION 4.03. Compliance Certificate; Notice of
Defaults........................................... 34
SECTION 4.04. Further Instruments and Acts....................... 35
SECTION 4.05. Maintenance of Office or Agency.................... 35
SECTION 4.06. Calculation of Original Issue Discount............. 35
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge or Transfer Assets.......... 36
SECTION 5.02. Successor Company Substituted...................... 36
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.................................. 37
SECTION 6.02. Acceleration....................................... 39
SECTION 6.03. Other Remedies..................................... 39
SECTION 6.04. Waiver of Past Defaults............................ 40
SECTION 6.05. Control by Majority................................ 40
SECTION 6.06. Limitation on Suits................................ 40
SECTION 6.07. Rights of Holders to Receive Payment............... 41
SECTION 6.08. Collection Suit by Trustee......................... 41
SECTION 6.09. Trustee May File Proofs of Claim................... 41
SECTION 6.10. Priorities......................................... 42
SECTION 6.11. Undertaking for Costs.............................. 42
SECTION 6.12. Notice of Defaults................................. 43
SECTION 6.13. Waiver of Stay, Extension or Usury
Laws............................................... 43
ARTICLE 7
TRUSTEE
SECTION 7.01. Rights of Trustee.................................. 44
SECTION 7.02. Individual Rights of Trustee....................... 45
ii
<PAGE>
SECTION 7.03. Trustee's Disclaimer............................... 46
SECTION 7.04. Notice of Defaults................................. 46
SECTION 7.05. Reports by Trustee to Holders...................... 46
SECTION 7.06. Compensation and Indemnity......................... 46
SECTION 7.07. Replacement of Trustee............................. 47
SECTION 7.08. Successor Trustee by Merger........................ 48
SECTION 7.09. Eligibility; Disqualification...................... 48
SECTION 7.10. Preferential Collection of Claims
Against Company ................................... 48
SECTION 7.11. Money Held in Trust................................ 49
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities............... 49
SECTION 8.02. Repayment to the Company........................... 49
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders......................... 50
SECTION 9.02. With Consent of Holders............................ 50
SECTION 9.03. Compliance with Trust Indenture Act................ 51
SECTION 9.04. Revocation and Effect of Consents, Waivers and
Actions............................................ 52
SECTION 9.05. Notation on or Exchange of Securities.............. 52
SECTION 9.06. Trustee to Sign Supplemental Indentures............ 52
SECTION 9.07. Effect of Supplemental Indentures.................. 52
ARTICLE 10
CONVERSION
SECTION 10.01. Conversion Privilege............................... 52
SECTION 10.02. Conversion Procedure............................... 54
SECTION 10.03. Fractional Shares.................................. 55
SECTION 10.04. Taxes on Conversion................................ 55
SECTION 10.05. Company to Provide Stock........................... 56
SECTION 10.06. Adjustment for Change in Capital Stock............. 56
SECTION 10.07. Adjustment for Rights Issue........................ 57
SECTION 10.08. Adjustment for Other Distributions................. 58
SECTION 10.09. When Adjustment May Be Deferred.................... 61
SECTION 10.10. When No Adjustment Required........................ 61
SECTION 10.11. Notice of Adjustment............................... 62
SECTION 10.12. Voluntary Increase................................. 62
SECTION 10.13. Notice of Certain Transactions..................... 62
SECTION 10.14. Reorganization of Company; Special Distributions... 63
SECTION 10.15. Company Determination Final........................ 64
SECTION 10.16. Trustee's Adjustment Disclaimer.................... 64
SECTION 10.17. Simultaneous Adjustments........................... 64
iii
<PAGE>
SECTION 10.18. Successive Adjustments............................. 64
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls....................... 64
SECTION 11.02 Notices............................................ 64
SECTION 11.03 Communication by Holders with Other Holders........ 65
SECTION 11.04 Certificate and Opinion as to Conditions
Precedent ......................................... 65
SECTION 11.05 Statements Required in Certificate or Opinion...... 66
SECTION 11.06 Separability Clause................................ 66
SECTION 11.07 Rules By Trustee, Paying Agent,
Conversion Agent and Registrar..................... 66
SECTION 11.08 Legal Holiday...................................... 66
SECTION 11.09 GOVERNING LAW...................................... 67
SECTION 11.10 No Recourse Against Others......................... 67
SECTION 11.11 Successors......................................... 67
SECTION 11.12 Multiple Originals................................. 67
SIGNATURES................................................................... 68
EXHIBIT A FORM OF FACE OF LYON............................................A-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
------- ---------
310(a)(1) ............................................ 7.09
(a)(2) ............................................ 7.09
(a)(3) ............................................ N.A.
(a)(4) ............................................ N.A.
(b) ............................................ 7.07; 7.09
(c) ............................................ N.A.
311(a) ............................................ 7.10
(b) ............................................ 7.10
(c) ............................................ N.A.
312(a) ............................................ 2.05
(b) ............................................ 11.03
(c) ............................................ 11.03
313(a) ............................................ 7.05
(b) ............................................ 7.05
(c) ............................................ 11.02
(d) ............................................ 7.05
314(a) ............................................ 4.02; 11.02
(b) ............................................ N.A.
(c)(1) ............................................ 11.04
(c)(2) ............................................ 11.04
(c)(3) ............................................ N.A.
(d) ............................................ N.A.
(e) ............................................ 11.05
(f) ............................................ N.A.
315(a) ............................................ 7.01
(b) ............................................ 7.04; 11.02
[(c) ............................................ 7.01]
[(d) ............................................ 7.01]
(e) ............................................ 6.11
316(a)(last sentence) ................................ 2.08
(a)(1)(A) ........................................ 6.05
(a)(1)(B) ........................................ 6.04
(a)(2) ............................................ N.A.
(b) ............................................ 6.07
317(a)(1) ............................................ 6.08
(a)(2) ............................................ 6.09
(b) ............................................ 2.04
318(a) ............................................ 11.01
N.A. means Not Applicable.
_______________
* Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE>
INDENTURE, dated as of June 12, 1996, between JACOR COMMUNICATIONS, INC.,
an Ohio corporation ("COMPANY"), and The Bank of New York, a New York banking
corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's Liquid Yield
Option-TM- Notes due 2011 (Zero Coupon -- Senior) (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"CONTROL", when used with respect to any specified person, means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" or "BOARD" means, with respect to any matter,
either the board of directors of the Company or any committee of such board duly
authorized, with respect to such matter, to exercise the powers of such board.
- ------------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
<PAGE>
"BUSINESS DAY" means each day of the year on which banking
institutions in The City of New York are not required or authorized to close.
"CAPITALIZED LEASE OBLIGATIONS" of any person means the obligations of
such person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"CAPITAL STOCK" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) capital stock issued by that
corporation.
"CASH" or "cash" means such coin or currency of The United States
of America as at any time of payment is legal tender for the payment of public
and private debts.
"COMMON STOCK" means the Common Stock, no par value per share, of the
Company as it exists on the date of this Indenture or any other shares of
capital stock of the Company into which such common stock shall be reclassified
or changed.
"COMPANY" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by either of its Chairman or Vice
Chairman of the Board, its President, any Vice President, its Treasurer, or any
Assistant Treasurer, and by its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"CONSOLIDATED NET ASSETS" means the total amount of assets of the
Company and its Subsidiaries (less applicable depreciation, amortization and
other valuation reserves), after deducting therefrom all current liabilities of
the Company and its Subsidiaries (other than intercompany liabilities and the
current portion of long-term debt and Capitalized Lease Obligations), all as set
forth on the latest consolidated balance sheet of the Company prepared in
accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary the
accounts of which are consolidated with those of the Company as of such date for
public financial reporting purposes.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
2
<PAGE>
"DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that does not include the paragraph and
schedule referred to in footnotes 1 and 2, respectively.
"DEPOSITARY" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"GAAP" means generally accepted accounting principles in the United
States as in effect on the date hereof.
"GLOBAL SECURITY" means a Security that contains the paragraph and the
schedule referred to in footnotes 1 and 2, respectively, in the form of Security
attached hereto as Exhibit A.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a
Security is registered on the Registrar's books.
"INDENTURE" means this Indenture as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
"OFFICER" means either Chairman or Vice Chairman of the Board, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.04 and 11.05, (i) signed in the name of the
Company by either its Chairman of the Board, Vice Chairman of the Board,
President, any Vice President, Treasurer, any Assistant Treasurer, Controller,
or any Assistant Controller, and (ii) attested to by its Secretary or any
Assistant Secretary, and delivered to the Trustee.
3
<PAGE>
"OPINION OF COUNSEL" means a written opinion containing the
information specified in Sections 11.04 and 11.05, if applicable, rendered by
legal counsel who may be (i) an employee of, or counsel to, the Company or (ii)
other counsel designated by the Company and reasonably acceptable to the
Trustee.
"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between
the Issue Price and the Principal Amount of the Security as set forth on the
face of the Security.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the
principal amount due at the Stated Maturity of the Security as set forth on the
face of the Security.
"PRINCIPAL PROPERTY" means (i) a parcel of improved or unimproved real
estate or other physical facility or depreciable asset of the Company or a
Subsidiary, the net book value of which on the date of determination exceeds 2%
of Consolidated Net Assets and (ii) any group of parcels of real estate, other
physical facilities, and/or depreciable assets of the Company and/or its
Subsidiaries, the net book value of which, when sold in one or a series of
related Sale and Lease-Back Transactions or securing debt issued in respect of
such Principal Properties, on the date of determination exceeds 2% of the
Consolidated Net Assets. For purposes of the foregoing, "related Sale and
Lease-back Transactions" refers to any two or more such contemporaneous
transactions which are on substantially similar terms with substantially the
same parties.
"REDEMPTION DATE" or "REDEMPTION DATE" shall mean the date
specified for redemption of any of the Securities in accordance with the terms
of the Securities and this Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning
set forth in paragraph 5 of the Securities.
"SALE AND LEASE-BACK TRANSACTIONS" means any arrangement with any
lessor (other than the Company), providing for the leasing to the Company for a
period of more than three years (including renewals at the option of the lessee)
of any Principal Property that has been or is to be sold or transferred by the
Company to such lessor or to any other person, to which funds have been or are
to be advanced by such lessor or other person on the security of the leased
property.
4
<PAGE>
"SALE PRICE" of a single share of Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case the
average of the average bid and the average ask prices) on such date as reported
in composite transactions for the principal United States securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional stock exchange, as reported by the National
Association of Securities Dealers Automated Quotation System.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" or "SECURITY" means any of the Company's Liquid Yield
Option-TM- Notes due 2011 (Zero Coupon -- Senior), as amended or supplemented
from time to time in accordance with the terms hereof, issued under this
Indenture.
"SECURITIES CUSTODIAN" means the Registrar as custodian with respect
to the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a
Security is registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means the
date specified in such Security as the fixed date on which the Principal of such
Security is due and payable.
"SUBSIDIARY" means (i) a corporation, a majority of whose Capital
Stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more subsidiaries of the Company or by the Company and one or more
subsidiaries of the Company, (ii) a partnership in which the Company or a
subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a subsidiary of the Company or the Company
and one or more subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, and as in effect on the date of this Indenture,
except as provided in Section 9.03.
5
<PAGE>
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for trading
or quotation.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor.
"ZELL/CHILMARK" means Zell/Chilmark Fund L.P. and any person who
controls, is controlled by or is under common control with Zell/Chilmark;
provided that for purposes of this definition "control" means the beneficial
ownership of more than 50% of the total voting power of a person normally
entitled to vote in the election of directors, managers or trustees, as
applicable, of a person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"AGENT MEMBERS" ...................................... 2.01(a)
"ASSOCIATE" .......................................... 3.09(a)
"AVERAGE SALE PRICE" ................................. 10.01
"BENEFICIAL OWNER" ................................... 3.09(a)
"CHANGE IN CONTROL" .................................. 3.09(a)
"CHANGE IN CONTROL PURCHASE DATE" .................... 3.09(a)
"CHANGE IN CONTROL PURCHASE NOTICE"................... 3.09(c)
"CHANGE IN CONTROL PURCHASE PRICE" ................... 3.09(a)
"COMPANY NOTICE" ..................................... 3.08(e)
"COMPANY NOTICE DATE" ................................ 3.08(e)
"CONVERSION AGENT" ................................... 2.03
"CONVERSION DATE" .................................... 10.02
"CONVERSION RATE" .................................... 10.01
"DTC" ................................................ 2.03
"EVENT OF DEFAULT" ................................... 6.01
"EXCHANGE ACT" ....................................... 3.08(d)
"EX-DIVIDEND TIME" ................................... 10.01
"EXTRAORDINARY CASH DIVIDEND" ........................ 10.08
"LEGAL HOLIDAY" ...................................... 11.08
"MARKET PRICE" ....................................... 3.08(d)
"NOTICE OF DEFAULT" .................................. 6.01
"OPTION".............................................. 2.02
"PAYING AGENT"........................................ 2.03
"PURCHASE DATE" ...................................... 3.08(a)
"PURCHASE NOTICE" .................................... 3.08(a)
6
<PAGE>
"PURCHASE PRICE" ..................................... 3.08(a)
"REGISTRAR" .......................................... 2.03
"SECURITIES ACT" ..................................... 3.08(d)
"TIME OF DETERMINATION" .............................. 10.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee.
"OBLIGOR" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA or
defined by TIA reference to another statute or regulation have the meanings
assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time in The United States of America;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
7
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ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage (provided that any
such notation, legend or endorsement required by usage is in a form acceptable
to the Company and the Trustee). Each Security shall be dated the date of its
authentication.
The Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated June 6_, 1996, between the Company and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Purchase
Agreement").
SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed by the Company by either of its Chairman or Vice Chairman of the Board,
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities 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 of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the Issue Date of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue
in an aggregate Principal Amount of up to $226,000,000 upon a Company Order
without any further action by the Company; PROVIDED, HOWEVER, that in the
event that the Company sells any Securities pursuant to the option (the
"OPTION") granted pursuant to Section 2 of the Purchase Agreement, then
the Trustee shall authenticate and deliver Securities for original issue in an
aggregate Principal Amount of up to $226,000,000 plus up to
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$33,900,000 aggregate Principal Amount of Securities sold pursuant to the Option
upon a Company Order. The aggregate Principal Amount of Securities outstanding
at any time may not exceed the amount set forth in the foregoing sentence,
subject to the proviso set forth therein, except as provided in Section 2.07.
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 Principal Amount and only integral multiples
thereof.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for purchase or payment ("PAYING AGENT") and
an office or agency where Securities may be presented for conversion
("CONVERSION AGENT"). The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent.
The term Conversion Agent includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar other than the
Trustee. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee and the Holders of
the name and address of any such agent and of any change in the office or agency
referred to in Section 4.05. If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.06. The
Company or any Subsidiary or an Affiliate of either of them may act as Paying
Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Registrar to act as Securities
Custodian with respect to the Global Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.
In accordance with Section 4.05 and except as otherwise provided herein, prior
to 12:00 noon, New York City time, or on each due date of payments in respect of
any Security, the Company
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shall deposit with the Paying Agent a sum of money or, if permitted by the terms
hereof, securities sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money and securities held by the Paying Agent
for the making of payments in respect of the Securities and shall notify the
Trustee of any default by the Company in making any such payment. At any time
during the continuance of any default by the Company in making any payments in
respect of the Securities, the Paying Agent shall, upon the written request of
the Trustee, forthwith pay to the Trustee all money and securities so held in
trust. If the Company, a Subsidiary or an Affiliate of any of them acts as
Paying Agent, it shall segregate the money and securities held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money and securities held by it to the Trustee and to
account for any money and securities disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for the money and securities.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish or cause to be furnished to the Trustee (i)
at least semiannually on June 1 and December 1 a list of the names and addresses
of Securityholders dated within 15 days of the date on which the list is
furnished and (ii) at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require, of
the names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. Upon surrender
for registration of transfer of any Definitive Security, together with a written
instrument of transfer satisfactory to the Trustee duly executed by the
Securityholder or such Securityholder's attorney duly authorized in writing, at
the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.03 or at the office or agency referred to in Section 4.05,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Definitive
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount. The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to pay all taxes, assessments or other governmental charges that
may be imposed in connection with the transfer or exchange of the Definitive
Securities from the
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Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a Definitive Security not involving any change in
ownership).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged for
a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with written instructions of the
Holder directing the Registrar to make, or to direct the Securities Custodian to
make, an endorsement on the Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global Security,
then the Registrar shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate a new Global Security in
the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture and the procedures of
the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Definitive
Security. Upon receipt by the Registrar of written instructions or such
other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any Person having a beneficial
interest in a Global Security, and, if such beneficial interest is being
transferred to the Person designated by the Depositary as being the
beneficial owner, a certification from such person to that effect (in
substantially the form set forth on the reverse of the Security)(all of
which may be submitted by facsimile), then the Registrar or the Securities
Custodian, at the direction of the Trustee, will cause, in accordance with
the standing instructions and procedures existing between the Depositary
and the Securities Custodian, the aggregate principal amount of the Global
Security to be reduced and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the form of an
Officers'
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Certificate, the Trustee or the Trustee's authenticating agent will
authenticate and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The Registrar
shall deliver such Definitive Securities to the persons in whose names
such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITARY.
If at any time:
(i) the Depositary for the Securities notifies the Company that
the Depositary is unwilling or unable to continue as Depositary for the
Global Securities and a successor Depositary for the Global Securities is
not appointed by the Company within 90 days after delivery of such notice;
or
(ii) the Company, in its sole discretion, notifies the Trustee and
the Registrar in writing that it elects to cause the issuance of
Definitive Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will, or its authenticating agent will, authenticate and deliver Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or cancelled, such Global Security
shall be returned to or retained and cancelled by the Registrar. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such
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Global Security shall be reduced and an endorsement shall be made on such Global
Security, by the Registrar or the Securities Custodian, at the direction of the
Registrar, to reflect such reduction.
(h) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES. At the option
of the Holder, Securities may be exchanged for other Securities of any
authorized denomination or denominations, of a like aggregate Principal Amount,
upon surrender of the Securities to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Securityholder or such Securityholder's attorney duly authorized in writing, at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Definitive Securities selected for
redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed), (b) any Securities in respect of which a
Purchase Notice or a Change in Control Purchase Notice has been given and not
withdrawn by the Holder thereof in accordance with the terms of this Indenture
(except, in the case of Securities to be purchased in part, the portion thereof
not to be purchased) or (c) any Securities for a period of 15 days before the
mailing of a notice of redemption.
Successive registrations and registrations of transfers and exchanges as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the register for the Securities.
Any Registrar appointed pursuant to Section 2.03 hereof shall provide to
the Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Securities upon transfer or exchange of
Securities.
No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security
is surrendered to the Company or the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity
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as may be required by them to save each of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security has been acquired by
a BONA FIDE purchaser, the Company shall execute, and upon its written
request the Trustee shall authenticate and deliver, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or stolen Security, a
new Security of like tenor and Principal Amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'
ACTION. Securities outstanding at any time are all the Securities
authenticated by the Trustee (including any Security represented by a Global
Security) except for those cancelled by it, those delivered to it for
cancellation, mutilated, destroyed, lost or stolen Securities for which the
Trustee has authenticated and delivered a new Security in lieu therefor pursuant
to Section 2.07, those paid pursuant to Section 2.07, those reductions in the
interest in a Global Security effected by the Registrar hereunder and those
described in this Section 2.08 as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate thereof holds the Security;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
Principal Amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the
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Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee actually knows to be so owned shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on Stated Maturity, money or, if permitted by the
terms hereof including, without limitation, Section 3.08, securities sufficient
to pay the Securities payable on that date, then on and after that date such
Securities shall cease to be outstanding and Original Issue Discount and
interest, if any, on such Securities shall cease to accrue and all other rights
of the Holder shall terminate (other than the right to receive the applicable
Redemption Price, Purchase Price or Change in Control Purchase Price, as the
case may be, upon delivery of the Security in accordance with the terms of this
Indenture); PROVIDED, that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the Conversion Date such Security shall cease to be outstanding and
Original Issue Discount and interest, if any, shall cease to accrue on such
Security.
SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary
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Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such
purpose pursuant to Section 2.03 or 4.05, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like Principal Amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 2.10. CANCELLATION. All Securities surrendered for payment,
redemption or purchase by the Company pursuant to Article 3, conversion pursuant
to Article 10, registration of transfer or exchange shall, if surrendered to any
person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. The Company may not
issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
10. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
delivered to the Company.
SECTION 2.11. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
PROVIDED that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at
its option, may redeem the Securities for cash in accordance with the provisions
set forth in paragraphs 5 and 7 of
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the Securities. If the Company elects to redeem Securities pursuant to
paragraph 5 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the Principal Amount of Securities to be redeemed and the
Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 at least 45 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee). If fewer
than all the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed by lot or by any other method the Trustee considers fair and
appropriate (so long as such method is not prohibited by the rules of any stock
exchange on which the Securities are then listed). The Trustee shall make the
selection at least 30 but not more than 60 days before the Redemption Date from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the Principal Amount of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in Principal Amounts of $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
If any Security selected for partial redemption is thereafter surrendered
for conversion in part before termination of the conversion right with respect
to the portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be), solely for purposes of determining
the aggregate Principal Amount of Securities to be redeemed by the Company, to
be the portion selected for redemption. Securities that have been converted
during a selection of Securities to be redeemed may be treated by the Trustee as
outstanding for the purpose of such selection. Nothing in this Section 3.02
shall affect the right of any Holder to convert any Security pursuant to Article
10 before the termination of the conversion right with respect thereto.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a Redemption Date, the Trustee, in the name and at the expense of
the Company, shall cause notice of redemption to be mailed, first-class postage
prepaid, to each Holder of Securities to be redeemed at his address as it
appears on
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the list of Securityholders maintained pursuant to Section 2.05. At the
Company's written request, the Trustee shall, in the name and at the expense of
the Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date (upon which the Redemption Price shall be
paid);
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent
and of the office or agency referred to in Section 4.05;
(5) that Securities called for redemption may be converted at any
time before the close of business on the Redemption Date;
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered to
the Paying Agent or at the office or agency referred to in Section 4.05 to
collect the Redemption Price;
(8) the CUSIP number of the Securities;
(9) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and Principal Amounts of the particular
Securities to be redeemed; and
(10) that, unless the Company defaults in payment of the Redemption
Price, Original Issue Discount on Securities called for redemption and
interest, if any, will cease to accrue on and after the Redemption Date.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to such notice of
redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is given, Securities called for redemption become due
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and payable on the Redemption Date stated in the notice and at the Redemption
Price therefor except for Securities that are converted in accordance with the
terms of this Indenture. Upon the later of the Redemption Date and the date
such Securities are surrendered to the Paying Agent or at the office or agency
referred to in Section 4.05, such Securities called for redemption shall be paid
at the Redemption Price therefor.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to or on the
Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of either of them is the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the Redemption Price
of all Securities to be redeemed on that date other than Securities or portions
of Securities called for redemption which prior thereto have been delivered by
the Company to the Trustee for cancellation. The Paying Agent shall as promptly
as practicable return to the Company any money, with interest, if any, thereon
(subject to the provisions of Section 7.01(f)), not required for that purpose
because of conversion of Securities pursuant to Article 10. If such money is
then held by the Company or a Subsidiary or an Affiliate of the Company in trust
and is not required for such purpose it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder, a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Securities, the Company may arrange, in lieu
of redemption, for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment bankers or other
purchasers to purchase all or a portion of such Securities by paying to the
Trustee in trust for the Securityholders whose Securities are to be so
purchased, on or before the close of business on the Redemption Date, an amount
that, together with any amounts deposited with the Trustee by the Company for
redemption of such Securities, is not less than the Redemption Price, together
with interest, if any, accrued to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no such
agreement shall relieve the Company of its obligation to pay such Redemption
Price and interest, if any. If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may, at
the option of the
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Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 10) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase and conversion in the same manner as it would moneys deposited with
it by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.08. PURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER.(a) GENERAL. Securities shall be purchased by the Company pursuant
to paragraph 6 of the Securities as of June 12, 2001 and June 12, 2006 (each, a
"PURCHASE DATE"), at the purchase price specified therein (each, a "PURCHASE
PRICE"), at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent or to the office or agency
referred to in Section 4.05 by the Holder of a written notice of purchase
(a "PURCHASE NOTICE") at any time from the opening of business on the
date that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Security that the Holder
will deliver to be purchased;
(B) the portion of the Principal Amount of the Security which
the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof;
(C) that such Security shall be purchased on the Purchase
Date pursuant to the terms and conditions specified in this
Indenture and in paragraph 6 of the Securities; and
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(D) if the Company elects pursuant to Section 3.08(b) to pay
the Purchase Price on such Purchase Date, in whole or in part, in
shares of Common Stock, but such portion of the Purchase Price to be
paid in Common Stock is ultimately to be paid in cash because any
condition in Section 3.08(d) is not satisfied, such Holder elects
(i) to withdraw such Purchase Notice as to some or all of the
Securities to which it relates (stating the Principal Amount and
certificate numbers of the Securities as to which such withdrawal
shall relate), or (ii) to receive cash in respect of the Purchase
Price for all Securities subject to such Purchase Notice; and
(2) delivery of such Security prior to, on or after the Purchase
Date (together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent or to the office or agency referred to in
Section 4.05, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor; PROVIDED, HOWEVER, that such Purchase
Price shall be so paid pursuant to this Section 3.08 only if the Security
so delivered conforms in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.08(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions hereof
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or the office or agency referred to in Section 4.05 the
Purchase Notice contemplated by this Section 3.08(a) shall have the right to
withdraw at any time prior to the close of business on the Purchase Date such
Purchase Notice by
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delivery of a written notice of withdrawal to the Paying Agent or such office or
agency in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE.
The Securities to be purchased pursuant to Section 3.08(a) may be paid for, at
the election of the Company, in cash or Common Stock, or in any combination of
cash and Common Stock, subject to the conditions set forth in this Section 3.08.
The Company shall designate, in the notice from the Company delivered pursuant
to Section 3.08(e), whether the Company will purchase the Securities for cash or
Common Stock, and, if a combination thereof, the percentages of the Purchase
Price of Securities in respect of which it will pay in cash or Common Stock;
PROVIDED that the Company will pay cash for fractional interests in Common
Stock. For purposes of determining the existence of potential fractional
interests, all Securities subject to purchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Securities are purchased pursuant to this Section
3.08 shall receive the same percentage of cash or Common Stock in payment of the
Purchase Price for such Securities, except (i) as provided in Section 3.08(d)
with regard to the payment of cash in lieu of fractional shares of Common Stock
and (ii) in the event that the Company is unable to purchase the Securities of a
Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable state securities laws cannot
be obtained, the Company may purchase the Securities of such Holder or Holders
for cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given notice thereof to Securityholders except pursuant to
this Section 3.08(b) or Section 3.08(d).
At least five Business Days before the Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 3.08(e);
(iii) that the conditions to such manner of payment set forth in
Section 3.08(d) have or will be complied with; and
(iv) whether the Company desires the Trustee to give the notice
required by Section 3.08(e).
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(c) PURCHASE WITH CASH. On each Purchase Date, at the option of the
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price of such Securities.
(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of
the Company, the Principal Amount of the Securities in respect of which a
Purchase Notice pursuant to Section 3.08(a) has been given, or a specified
percentage thereof, may be purchased by the Company by the issuance of a number
of shares of Common Stock equal to the quotient obtained by dividing (i) the
amount of cash to which the Securityholders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Securities in cash by (ii) the Market Price (as
defined below) of a share of Common Stock, subject to the next succeeding
paragraph.
The Company will not issue a fractional share of Common Stock in payment
of the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Security
purchased, the number of shares of Common Stock shall be based on the aggregate
amount of Securities to be purchased.
The Company's right to exercise its election to purchase the Securities
pursuant to this Section through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given notice of an election to pay
entirely in cash and its giving of timely notice of election to purchase
all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act of
1933, as amended (the "SECURITIES ACT") and the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), in each case if required for
the initial issuance thereof;
(iii) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
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(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of
Common Stock to be issued by the Company in payment of the Purchase Price
in respect of Securities have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the
Purchase Price in respect of the Securities, will be validly issued, fully
paid and nonassessable and shall be free of any preemptive rights and any
lien or adverse claim (provided that such Opinion of Counsel may state
that, insofar as it relates to the absence of such preemptive rights,
liens and adverse claims, it is given upon the best knowledge of such
counsel), and, in the case of such Officers' Certificate, that conditions
(i), (ii) and (iii) above have been satisfied and, in the case of such
Opinion of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Common Stock on each of the seven Business Days prior
to the Purchase Date. The Company may elect to pay in Common Stock only if the
information necessary to calculate the Market Price is reported in THE WALL
STREET JOURNAL or another daily newspaper of national circulation. If such
conditions are not satisfied prior to or on the Purchase Date and the Company
elected to purchase the Securities pursuant to this Section 3.08 through the
issuance of shares of Common Stock, the Company shall pay, without further
notice, the Purchase Price in cash.
The "MARKET PRICE" means the average of the Sale Price of the Common
Stock for the five Trading Day period ending on the third Trading Day prior to
the related Purchase Date, appropriately adjusted to take into account the
actual occurrence, during the seven Trading Days preceding such Purchase Date,
of any event described in Section 10.06, 10.07 or 10.08; SUBJECT, HOWEVER,
to the conditions set forth in Sections 10.09 and 10.10.
(e) NOTICE OF ELECTION. The Company shall send notices of its
election (the "COMPANY NOTICE") to purchase with cash or Common Stock or any
combination thereof to the Holders (and to beneficial owners as required by
applicable law) in the manner provided in Section 3.03. The Company Notice
shall be sent to Holders (and to beneficial owners as required by applicable
law) on a date not less than 20 Business Days prior to the Purchase Date (such
date not less than 20 Business Days prior to the Purchase Date being herein
referred to as the "COMPANY NOTICE DATE"). Such notices shall
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state the manner of payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or any
specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date equal
to such specified percentage of the Purchase Price of the Securities held
by such Holder (except for any cash amount to be paid in lieu of
fractional shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market risk
with respect to the value of the Common Stock to be received from the date
such Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to be
completed by the Securityholder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent and of the office or agency referred to in Section 4.05;
(iii) that Securities as to which a Purchase Notice has been given
may be converted into Common Stock at any time prior to the
close of business on the applicable Purchase Date only if the
applicable Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent or to
the office or agency referred to in Section 4.05 to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Security
as described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 3.08 and a brief description of those rights;
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(vii) briefly, the conversion rights of the Securities and that
Holders who want to convert Securities must satisfy the requirements set
forth in paragraph 8 of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 3.08(a)(1)(d) or Section 3.10).
At the Company's written request, the Trustee shall give such notice in
the Company's name and at the Company's expense;
PROVIDED, HOWEVER, that, in all cases, the text of such notice shall be
prepared by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount of Securities, the Company will publish
such determination in THE WALL STREET JOURNAL or another daily newspaper of
national circulation and furnish the Trustee with an affidavit of publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted any
shares of Common Stock to be issued to purchase Securities on the principal
national securities exchange or over-the-counter or other domestic market on
which any other shares of the Common Stock are then listed or quoted. The
Company will promptly inform the Trustee in writing of any such listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in
respect of a cash purchase under Section 3.08(c) or for fractional interests, as
applicable) or shares of Common Stock, or any combination thereof, as
applicable, at the time and in the manner as provided in Section 3.11,
sufficient to pay the aggregate Purchase Price of all Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the later of the
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 4.05, the Company shall
deliver to each Holder entitled to receive Common Stock through the Paying Agent
a certificate for the number of full shares of Common Stock issuable in payment
of the Purchase Price and cash in lieu of any fractional interests. The person
in whose name the certificate for Common Stock is registered shall be treated as
a holder of record of such Common Stock on the Business Day following the
related Purchase Date. Subject to Section 3.08(d), no payment or adjustment
will be made for dividends on the
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Common Stock the record date for which occurred prior to the Purchase Date.
(h) TAXES. If a Holder of a Security is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Common Stock. However, the Holder shall pay any such
tax which is due because the Holder requests the shares of Common Stock to be
issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which will be due, as set forth in an Officers' Certificate, because
the shares of Common Stock are to be issued in a name other than the Holder's
name. Nothing herein shall preclude any income tax withholding required by law
or regulations.
SECTION 3.09. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL. (a) If on or prior to June 12, 2001 there shall have
occurred a Change in Control, Securities shall be purchased, at the option of
the Holder thereof, by the Company at the purchase price specified in paragraph
6 of the Securities (the "CHANGE IN CONTROL PURCHASE PRICE"), on the date that
is 35 Business Days after the occurrence of the Change of Control (the "CHANGE
IN CONTROL PURCHASE DATE"), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 3.09(c).
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time
after the original issuance of the Securities as either of the following events
shall occur:
(i) There shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving
corporation or pursuant to which the Common Stock would be converted into
cash, securities or other property, other than a consolidation or merger
of the Company in which the holders of Common Stock immediately prior to
the consolidation or merger have, directly or indirectly, at least a
majority of the Common Stock of the continuing or surviving corporation
immediately after such consolidation or merger; or
(ii) There is a report filed by any person, including its
Affiliates and Associates, other than Zell/Chilmark, the Company, any
Subsidiary of the Company, or any employee benefit plan of either the
Company or any Subsidiary of the Company, on Schedule 13D or 14D-1 (or any
successor schedule, form or report) pursuant to the Exchange Act,
disclosing that such person (for the purposes of this Section 3.09 only,
the term "person" shall include a "person" within the meaning of
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Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing) has become the beneficial owner (as
the term "BENEFICIAL OWNER" is defined under Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of 50% or more of
the voting power of the Company's Common Stock then outstanding;
PROVIDED, HOWEVER, that a person shall not be deemed beneficial owner
of, or to own beneficially, (a) any securities tendered pursuant to a
tender or exchange offer made by or on behalf of such person or any of
such person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange thereunder, or (b) any securities if
such beneficial ownership (1) arises solely as a result of a revocable
proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, and (2) is not also then reportable on Schedule
13D (or any successor schedule, form or report) under the Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred if at any time the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan files or becomes
obligated to file a report under or in response to Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report) under the Exchange Act
disclosing beneficial ownership by it of shares of Common Stock, whether in
excess of 50% or otherwise.
"ASSOCIATE" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the occurrence of a Change in Control,
(i) the Company shall mail a written notice of such Change in Control by
first-class mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law) and (ii) the Company shall cause a copy of such
notice to be published in THE WALL STREET JOURNAL or another daily newspaper
of national circulation. The notice shall include a form of Change in Control
Purchase Notice to be completed by the Securityholder and shall state:
(1) the events causing a Change in Control and the date such Change
in Control is deemed to have occurred for purposes of this Section 3.09;
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(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion
Agent and the office or agency referred to in Section 4.05;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock (or, in lieu thereof,
cash, if the Company shall so elect) at any time prior to the close of
business on the Change of Control Purchase Date only if the Change in
Control Purchase Notice has been withdrawn by the Holder in accordance
with the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent or the
office or agency referred to in Section 4.05 to collect payment;
(9) that the Change in Control Purchase Price for any Security as
to which a Purchase Notice has been duly given and not withdrawn will be
paid promptly following the later of the Change in Control Purchase Date
and the time of surrender of such Security as described in (8);
(10) the procedures the Holder must follow to exercise rights under
this Section 3.09 and a brief description of those rights;
(11) briefly, the conversion rights of the Securities; and
(12) the procedures for withdrawing a Change in Control Purchase
Notice.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "CHANGE IN CONTROL PURCHASE
NOTICE") to the Paying Agent or to the office or agency referred to in Section
4.05 at any time prior to the close of business on the Change in Control
Purchase Date, stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
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(2) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be purchased on the Change in Control
Purchase Date pursuant to the terms and conditions specified in paragraph
6 of the Securities.
Receipt of the Security by the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements), at
the offices of the Paying Agent or to the office or agency referred to in
Section 4.05 shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor; PROVIDED, HOWEVER, that such Change in
Control Purchase Price shall be so paid pursuant to this Section 3.09 only if
the Security so delivered to the Paying Agent or such office or agency shall
conform in all respects to the description thereof set forth in the related
Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 4.05.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or to the office or agency referred to in Section 4.05 the
Change in Control Purchase Notice contemplated by this Section 3.09(c) shall
have the right to withdraw such Change in Control Purchase Notice at any time
prior to or on the Change in Control Purchase Date by delivery of a written
notice of withdrawal to the Paying Agent or to such office or agency in
accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 3.10. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL PURCHASE
NOTICE. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08(a) or Section 3.09(c), as
applicable, the Holder of the
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Security in respect of which such Purchase Notice or Change in Control Purchase
Notice, as the case may be, was given shall (unless such Purchase Notice or
Change in Control Purchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Security. Such Purchase Price or Change in Control Purchase Price shall be paid
to such Holder promptly following the later of (x) the Business Day following
the Purchase Date or the Change in Control Purchase Date, as the case may be,
with respect to such Security (provided the conditions in Section 3.08(a) or
Section 3.09(c), as applicable, have been satisfied) and (y) the time of
delivery of such Security to the Paying Agent or to the office or agency
referred to in Section 4.05 by the Holder thereof in the manner required by
Section 3.08(a) and (g) or Section 3.09(c), as applicable. Securities in
respect of which a Purchase Notice or Change in Control Purchase Notice, as the
case may be, has been given by the Holder thereof may not be converted into
shares of Common Stock on or after the date of the delivery of such Purchase
Notice or Change in Control Purchase Notice, as the case may be, unless such
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
first been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent or to the office or agency referred to in Section
4.05 at any time on or prior to the Purchase Date or the Change in Control
Purchase Date, as the case may be, specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the Principal Amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(3) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.08(a)(1)(d) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(a)(1)(d) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
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There shall be no purchase of any Securities pursuant to Sections 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares of Common Stock) or 3.09 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Purchase Notice or Change in
Control Purchase Notice, as the case may be) and is continuing an Event of
Default (other than a default in the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such Securities).
The Paying Agent will promptly return to the respective Holders thereof any
Securities (x) with respect to which a Purchase Notice or Change in Control
Purchase Notice, as the case may be, has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, with respect to such Securities) in which
case, upon such return, the Purchase Notice or Change in Control Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL PURCHASE
PRICE. Prior to 3:00 p.m. (local time in The City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase Date,
as the case may be, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as Paying Agent, shall segregate and hold in trust as provided in
Section 2.04) an amount of cash in immediately available funds or securities, if
expressly permitted hereunder, sufficient to pay the aggregate Purchase Price or
Change in Control Purchase Price, as the case may be, of all the Securities or
portions thereof which are to be purchased as of the Purchase Date or Change in
Control Purchase Date, as the case may be.
SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security which is to
be purchased only in part shall be surrendered at the office of the Paying Agent
or the office or agency referred to in Section 4.05 (with, if the Company or the
Trustee so requires, due endorsement, or a written instrument of transfer in
form satisfactory to the Company and the Trustee executed by the Holder or such
Holder's attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to,
and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. In connection with any offer to purchase
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or purchase of Securities under Section 3.08 or 3.09 hereof, the Company shall
(i) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act, if applicable,
(ii) file the related Schedule 13E-4 (or any successor schedule, form or report)
under the Exchange Act, if applicable, and (iii) otherwise comply with all
Federal and state securities laws regulating the offer and delivery of shares of
Common Stock upon purchase of the Securities (including positions of the SEC
under applicable no-action letters) so as to permit the rights and obligations
under Sections 3.08 and 3.09 to be exercised in the time and in the manner
specified in Sections 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company, upon written request, any cash or shares of
Common Stock, together with interest on such cash as hereinafter provided and
dividends on such shares of Common Stock, if any, (subject to the provisions of
Section 7.01(f)) held by them for the payment of a Purchase Price or Change in
Control Purchase Price, as the case may be, of the Securities that remain
unclaimed as provided in paragraph 12 of the Securities; PROVIDED, HOWEVER,
that to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.11 exceeds the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of the Securities
or portions thereof to be purchased, then promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case may
be, the Trustee shall return any such excess to the Company together with
interest as hereinafter provided or dividends, if any, thereon (subject to the
provisions of Section 7.01(f)). Any cash deposited with the Trustee or with the
Paying Agent pursuant to Section 3.11 hereof, shall be invested by the Trustee
or Paying Agent, as applicable, in short term obligations of, or fully
guaranteed by, the United States of America, or commercial paper rated A-1 or
better by Standard and Poor's Corporation or P-1 or better by Moody's Investors
Service, Inc. or the Dreyfus Cash Management Fund or the American AAdvantage
Money Market Fund, as specifically directed in writing by the Company. Interest
earned on such investments shall be repaid to the Company pursuant to this
Section 3.14. Except as provided for in this Section 3.14, the Trustee shall be
under no liability for interest on any money received by it pursuant to this
Indenture.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly make
all payments in respect of the Securities on the
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dates and in the manner provided in the Securities or pursuant to this
Indenture. Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price and interest,
if any, shall be considered paid on the applicable date due if on such date the
Trustee or the Paying Agent holds, in accordance with this Indenture, cash or
securities, if expressly permitted hereunder, sufficient to pay all such amounts
then due.
The Company shall, to the extent permitted by law, pay interest on overdue
amounts at the per annum rate of interest set forth in paragraph 1 of the
Securities, compounded semi-annually, which interest on overdue amounts (to the
extent payment of such interest shall be legally enforceable) shall accrue from
the date such overdue amounts were originally due and payable.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (or any such successor provisions
thereto). In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act (or any such
successor provisions), it shall continue to provide the Trustee with reports
containing substantially the same information as would have been required to be
filed with the SEC had the Company continued to have been subject to such
reporting requirements, and the Trustee shall make any such reports available to
Securityholders upon request. In such event, such reports shall be provided at
the times the Company would have been required to provide reports had it
continued to have been subject to such reporting requirements. The Company also
shall comply with the other provisions of TIA Section 314(a), to the extent such
provisions are applicable.
SECTION 4.03. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULTS. (a) The
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending on December
31, 1996) a certificate of the principal executive officer, the principal
financial officer, or principal accounting officer of the Company stating
whether or not, to the knowledge of the signer, the Company has complied with
all conditions and covenants on its part contained in this Indenture and, if the
signer has obtained knowledge of any default by the Company in the performance,
observance or fulfillment of any such condition or covenant, specifying each
such default and the nature thereof. For the purpose of this Section 4.03,
compliance shall be
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determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
(b) The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five Business Days of its
becoming aware of such Default or Event of Default.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain in the Borough of Manhattan, The City of New York, in such location as
may be required by the rules of any securities exchange or quotation system on
which the Securities may from time to time be listed, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office of the Trustee in
The City of New York, at which at any particular time its corporate trust
business shall be principally administered, which office on the date hereof is
located at 101 Barclay Street, Floor 21 West, New York, New York 10286, shall be
such office or agency for all of the aforesaid purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change of location, of
such other office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in The Borough of
Manhattan, The City of New York, for such purposes.
SECTION 4.06. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall file with the Trustee promptly following the end of each
calendar year a written notice specifying the amount of
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original issue discount (including daily rates and accrual periods) accrued on
outstanding Securities as of the end of such year.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. So long
as any Securities shall be outstanding, the Company shall not consolidate with
or merge into any other corporation or other person or convey, transfer or lease
its properties and assets substantially as an entirety to any person (such
successor corporation or person, as the case may be, shall in this Article 5 be
referred to as the "Successor Company"), unless
(1) either (x) the Company shall be the continuing corporation or
(y) the Successor Company (if other than the Company) shall be organized
and existing under the laws of the United States of America or any State
or the District of Columbia, and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and premium, if any, and interest, if any, on all the Securities and
the performance of every covenant of this Indenture and in the Securities
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event that, after notice or lapse of time, or both,
would become an Event of Default, shall have happened and be continuing;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
SECTION 5.02. SUCCESSOR COMPANY SUBSTITUTED. Upon any consolidation
with or merger into any other corporation or other person, or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 5.01, the Successor Company or person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor Company or person had been named as
the Company herein,
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and thereafter, except in the case of a lease and obligations the Company may
have under a supplemental indenture pursuant to Section 10.14, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities. Subject to Section 9.06, the Company, the Trustee
and the successor person shall enter into a supplemental indenture to evidence
the succession and substitution of such successor person and such discharge and
release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price or Change in Control Purchase Price on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise, whether or
not such payment shall be prohibited by this Indenture;
(2) the Company fails to comply with any of its agreements in the
Securities or this Indenture and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(3) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it
in an involuntary case or proceeding or the commencement of any case
against it;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
(E) files a petition in bankruptcy or answer or consent
seeking reorganization or relief; or
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(F) consents to the filing of such petition or the
appointment of or taking possession by a Custodian;
(4) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case
or proceeding, or adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any
substantial part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days;
(5) the Company fails to deliver shares of Common Stock or pay cash
in lieu of fractional shares in accordance with the terms hereof when such
Common Stock or cash in lieu of fractional shares is required to be
delivered, upon conversion of a Security and such failure is not remedied
for a period of 10 days; or
(6) (a) default shall occur (i) in the payment of any principal on
any debt for borrowed money of the Company (excluding any non-recourse
debt), in an aggregate principal amount in excess of $10.0 million, when
due at its final maturity after giving effect to any applicable grace
period and the holder thereof shall have taken affirmative action to
enforce the payment thereof, or (ii) in the performance of any term or
provision of any debt for borrowed money of the Company (excluding any
non-recourse debt) in an aggregate principal amount in excess of $10.0
million that results in such debt becoming or being declared due and
payable prior to the date on which it would otherwise become due and
payable, unless, in the case of either clause (i) or (ii) above, (x) such
acceleration or action to enforce payment, as the case may be, has been
rescinded or annulled, (y) such debt has been discharged or (z) a sum
sufficient to discharge in full such debt has been deposited in trust by
or on behalf of the Company, in each case, within a period of 10 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in aggregate Principal Amount of the Securities at the time
outstanding, a written notice specifying such default or defaults and
stating that such notice is a "Notice of Default" hereunder.
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A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (2) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice and the lapse of time or both would become an Event of Default
under clause (2) or clause (6), its status and what action the Company is taking
or proposes to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(3) or (4)) occurs and is continuing,
unless the Principal Amount of all the Securities shall have already become due
and payable, either the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate Principal Amount of the Securities at the time
outstanding by notice to the Company and the Trustee, may declare the Issue
Price and accrued Original Issue Discount through the date of declaration on all
the Securities to be immediately due and payable, whereupon such Issue Price and
accrued Original Issue Discount shall be due and payable immediately; provided
that, if an Event of Default specified in Section 6.01(3) or (4) occurs and is
continuing, the Issue Price and accrued Original Issue Discount on all the
Securities through the date of the occurrence of such Event of Default shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholders. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
that have become due solely as a result of acceleration and if all amounts due
to the Trustee under Section 7.06 have been paid. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
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The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (a) an Event of Default described
in Section 6.01(1), (b) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected or
(c) a Default under Article 10. When a Default is waived, it is deemed cured
and shall cease to exist, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee shall have been provided with
reasonable security or indemnity against such liability satisfactory to the
Trustee.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense satisfactory to the
Trustee;
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(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities or any Redemption Date, and to
convert the Securities in accordance with Article 10 or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
described in Section 6.01(1) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.06.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Change in Control
Purchase Price or interest, if any, in respect of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amount) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control
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Purchase Price or interest, if any, and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.06;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price or
interest, if any, as the case may be, ratably, without preference or priority of
any kind, according to such amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any
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suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant (other than
the Trustee) in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit initiated by the Trustee,
a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than
10% in aggregate Principal Amount of the Securities at the time outstanding.
SECTION 6.12. NOTICE OF DEFAULTS. The Trustee shall, within 90 days
after the occurrence of any Default, mail to all Holders of Securities, as the
names and addresses of such Holders appear on the books of registry of the
Company, notice of all Defaults of which the Trustee shall be aware, unless such
Defaults shall have been cured or waived before the giving of such notice;
PROVIDED that, except in the case of a Default described in Section 6.01(1),
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or Trust Officers of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of Securities.
SECTION 6.13. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent it may lawfully do so) that it shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law, wherever
enacted, now or at any time hereafter in force, that would prohibit or forgive
the Company from paying all or any portion of the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price or Change in
Control Purchase Price in respect of the Securities, or any interest on any such
amounts, as contemplated herein, or that may affect the covenants or the
performance of this Indenture or the Securities; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
SECTION 7.01. RIGHTS OF TRUSTEE. (a) Before the Trustee acts or
refrains from acting, it may require an Officers' Certificate or an Opinion of
Counsel. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(b) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(e) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. Except as provided in
Section 3.14 hereof, the Trustee (acting in any capacity hereunder) shall be
under no liability for interest on any money received by it hereunder.
(f) The Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(g) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(h) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
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(i) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the outstanding Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities.
(j) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee reasonably believes
that a default may exist, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.
(l) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(m) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
SECTION 7.02. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.09 and 7.10.
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SECTION 7.03. TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act or in the
Indenture or the Securities (other than its certificate of authentication), or
the determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.04. NOTICE OF DEFAULTS. The Trustee shall, within 90 days
after the occurrence of any Default, mail to all Holders of Securities, as the
names and addresses of such Holders appear on the books of registry of the
Company, notice of all Defaults of which the Trustee shall be aware, unless such
Defaults shall have been cured or waived before the giving of such notice.
Except in the case of a Default described in Section 6.01(1), the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or Trust
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities.
SECTION 7.05. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after
each June 1 beginning with the June 1, 1997 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such June 1 that complies with TIA Section 313(a), if required by said
Section. The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be provided to the Company and shall be filed with the SEC and each stock
exchange on which the Securities are listed. The Company agrees promptly to
notify the Trustee whenever the Securities become listed on any stock exchange
and of any delisting thereof.
SECTION 7.06. COMPENSATION AND INDEMNITY. The Company agrees:(a) to
pay to the Trustee from time to time such compensation (in accordance with a fee
schedule agreed upon from time to time) for all services rendered by it
hereunder (which compensation shall not (to the extent permitted by law) be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) to reimburse the Trustee (in accordance with a fee schedule agreed
upon from time to time) upon its request and, if required by the Company,
submission of reasonable documentation for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this
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Indenture (including the reasonable compensation and the expenses, advances and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee or any predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based upon, measured or determined by
the income of the Trustee), incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The Trustee shall give the Company notice of any claim or liability for
which the Trustee might be entitled to indemnification under subparagraph (c) of
this Section 7.06, within a reasonable amount of time after a Trust Officer of
the Trustee actually becomes aware of such claim or liability. To secure the
Company's payment obligations in this Section 7.06, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee.
The Company's payment obligations pursuant to this Section 7.06 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(3) or (4), the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
The provisions of this Section shall survive the termination of this Indenture.
SECTION 7.07. REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; PROVIDED, HOWEVER, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.07. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee (subject to the consent of the
Company, such consent not to be unreasonably withheld). The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.09;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
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(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.06.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.09, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.08. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
SECTION 7.09. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. In
determining whether the Trustee has conflicting interests as defined in TIA
Section 310(b)(1), the provisions contained in the proviso to TIA Section
310(b)(1) shall be deemed incorporated herein.
SECTION 7.10. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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SECTION 7.11. MONEY HELD IN TRUST. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash or, if expressly permitted by the terms hereof, securities
sufficient to pay at Stated Maturity the Principal Amount of all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company
(including, without limitation, sums payable by delivery of shares of Common
Stock pursuant to Section 3.08), then this Indenture shall, subject to Section
7.06, cease to be of further effect. The Trustee shall join in the execution of
a document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years; PROVIDED, HOWEVER, that at the Company's
written request, the Trustee or such Paying Agent, before being required to make
any such return, shall, at the expense of the Company, cause to be published
once in THE WALL STREET JOURNAL or another daily newspaper of national
circulation or mail to each such Holder notice that such money or securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing, any unclaimed money or
securities then remaining will be returned to the Company. After return to the
Company, Holders entitled to the money or securities must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person, and the Trustee and the Paying Agent shall have no
further liability with respect to such money or securities for that period
commencing after the return thereof.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
PROVIDED, HOWEVER, that such amendment does not materially adversely
affect the rights of any Securityholder;
(2) to comply with Article 5 or Section 10.14;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986,
as amended;
(4) to make any change that does not adversely affect the rights of
any Securityholder;
(5) to add to the covenants or obligations of the Company
hereunder, for the benefit of the Securityholders, or to surrender any
right, power or option herein conferred upon the Company; or
(6) to make any change to comply with the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS. With the written consent of
the Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding, the Company and the Trustee may amend this
Indenture or the Securities. However, without the consent of each
Securityholder affected, an amendment or supplement to this Indenture or the
Securities may not:
(1) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;
(2) make any change to the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Securities or extend the time for payment of accrued
Original Issue Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or extend the
Stated Maturity of any Security;
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(4) reduce the amount of cash payable in respect of conversion upon
the Company's election to pay cash with respect thereto, the Redemption
Price, Purchase Price or Change in Control Purchase Price of any Security
or extend the date on which the Purchase Price or Change in Control
Purchase Price of any Security is payable;
(5) make any Security payable in money or securities other than
that stated in the Security;
(6) make any change in Section 6.04 or this Section 9.02, except to
increase any percentage referred to therein, or make any change in Section
6.07;
(7) make any change that adversely affects the right to convert any
Security (including the right to receive cash in lieu of Common Stock
except as set forth in Section 9.01(4));
(8) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof
and this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase);
(9) make any change to the provisions of this Indenture relating to
the purchase of Securities at the option of the Holder pursuant to Section
3.08 or 3.09 which change would result in a violation of applicable
federal or state securities laws (including positions of the SEC under
applicable no-action letters), whether as a result of the exercise or
performance of any rights or obligations under such provisions or
otherwise; or
(10) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article shall comply with the
TIA as then in effect.
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SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment or waiver becomes effective, a consent to it or any other
action by a Holder of a Security hereunder is a continuing consent by the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall
bind every Securityholder, except as provided in Section 9.02.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to receive, and (subject
to the provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
ARTICLE 10
CONVERSION
SECTION 10.01. CONVERSION PRIVILEGE. A Holder of a Security may
convert such Security into Common Stock at any time during the
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period stated in paragraph 8 of the Securities. The number of shares of Common
Stock issuable upon conversion of a Security per $1,000 of Principal Amount
thereof (the "CONVERSION RATE") shall be that set forth in paragraph 8 in the
Securities, subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount of a Security if
the portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.
"AVERAGE SALE PRICE" means the average of the Sale Prices of the Common
Stock for the shorter of
(i) 30 consecutive Trading Days ending on the last full Trading Day
prior to the Time of Determination with respect to the rights, options,
warrants or distribution in respect of which the Average Sale Price is
being calculated, or
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, options or warrants or
(b) the distribution, in each case, in respect of which the Average Sale
Price is being calculated and (y) proceeding through the last full trading
day prior to the Time of Determination with respect to the rights,
warrants or distribution in respect of which the Average Sale Price is
being calculated, or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance of
rights, warrants, or options or (b) distribution, in each case, for which
an adjustment is required by the provisions of Section 10.06(4), 10.07 or
10.08 and (y) proceeding through the last full Trading Day prior to the
Time of Determination with respect to the rights, warrants, or options or
distribution in respect of which the Average Sale Price is being
calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section
10.06(1), (2), (3) or (5) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Sale Price of the Common
Stock during such period.
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"TIME OF DETERMINATION" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants, or
options or a distribution, in each case, to which Sections 10.07 and 10.08 apply
and (ii) the time ("EX-DIVIDEND TIME") immediately prior to the commencement
of "ex-dividend" trading for such rights, options, warrants or distribution on
the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.
SECTION 10.02. CONVERSION PROCEDURE. To convert a Security a Holder
must satisfy the requirements in paragraph 8 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date (the
"CONVERSION DATE"). The Company shall deliver to the Holder no later than the
seventh Business Day following the Conversion Date, through the Conversion
Agent, a certificate for the number of full shares of Common Stock issuable upon
the conversion and cash in lieu of any fractional share determined pursuant to
Section 10.03.
The person in whose name the certificate is registered shall be treated as
a stockholder of record on and after the Conversion Date; PROVIDED, HOWEVER,
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; PROVIDED, FURTHER, that such conversion shall
be at the Conversion Rate in effect on the date that such Security shall have
been surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Security, such person shall no longer
be a Holder of such Security.
Holders may surrender a Security for conversion by means of book entry
delivery in accordance with paragraph 8 of the Securities and the regulations of
the applicable book entry facility.
No payment or adjustment will be made for dividends on any Common Stock
except as provided in this Article 10. On conversion of a Security, that
portion of accrued Original Issue Discount attributable to the period from the
Issue Date to the Conversion Date with respect to the converted Security shall
not be cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through delivery of the Common Stock
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(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof; and
the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of any fractional shares of Common Stock) shall be treated
as issued, to the extent thereof, first in exchange for Original Issue Discount
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be computed based
on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in
a place where the Conversion Agent is located, the Security may be surrendered
to such Conversion Agent on the next succeeding day that is not a Legal Holiday.
SECTION 10.03. FRACTIONAL SHARES. The Company will not issue a
fractional share of Common Stock upon conversion of a Security. Instead, the
Company will deliver cash for the current market value of the fractional share.
The current market value of a fractional share shall be determined to the
nearest 1/1,000th of a share by multiplying the Sale Price, on the last Trading
Day prior to the Conversion Date, of a full share by the fractional amount and
rounding the product to the nearest whole cent.
SECTION 10.04. TAXES ON CONVERSION. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion
Agent may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due, as set forth in an
Officers' Certificate, because the shares are to be issued in a name other than
the Holder's name. Nothing herein shall preclude any tax withholding required
by law or regulations.
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SECTION 10.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities for shares of
Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
SECTION 10.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the
Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants
or options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of
its Capital Stock (other than rights, warrants or options for its Capital
Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of Capital
Stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to such
action.
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The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares or other units of two or more classes or series of
Capital Stock of the Company, the Conversion Rate shall thereafter be subject to
adjustment upon the occurrence of an action taken with respect to any such class
or series of Capital Stock as is contemplated by this Article 10 with respect to
the Common Stock, on terms comparable to those applicable to Common Stock in
this Article 10.
SECTION 10.07. ADJUSTMENT FOR RIGHTS ISSUE. If, after the Issue Date,
the Company distributes any rights, warrants or options to all holders of its
Common Stock entitling them, for a period expiring within 60 days after the
record date for such distribution, to purchase shares of Common Stock at a price
per share less than the Sale Price as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
(0 + N)
------------
R' = R x 0 + (N x P)
-----
M
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
0 = the number of shares of Common Stock outstanding on the record date
for the distribution.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, MINUS, in the case of (i) a distribution
to which Section 10.06(4) applies or (ii) a distribution to which
Section 10.08 applies, for which, in each case, (x) the record date
shall occur on or before the record date for the distribution to
which this Section 10.07 applies and (y) the Ex-Dividend Time shall
occur on or after the date of the Time of Determination for the
distribution to which this Section 10.07 applies, the fair market
value (on the record date for the distribution to which this Section
10.07 applies) of:
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(1) the Capital Stock of the Company distributed in
respect of each share of Common Stock in such Section 10.06(4)
distribution, and
(2) the assets of the Company or debt securities or any
rights, warrants or options to purchase securities of the
Company distributed in respect of each share of Common Stock
in such Section 10.08 distribution.
The Board of Directors shall determine fair market values for the purposes of
this Section 10.07.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this Section 10.07 applies.
No adjustment shall be made under this Section 10.07 if the application of
the formula stated above in this Section 10.07 would result in value of R' that
is equal to or less than the value of R.
SECTION 10.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If, after the
Issue Date, the Company distributes to all holders of its Common Stock any of
its assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in Section 10.06 and distributions of
rights, warrants or options referred to in Section 10.07 and (y) cash dividends
or other cash distributions that are paid out of consolidated current net income
or earnings retained in the business as shown on the books of the Company unless
such cash dividends or other cash distributions are Extraordinary Cash Dividends
(as defined below)), the Conversion Rate shall be adjusted, subject to the
provisions of the last paragraph of this Section 10.08, in accordance with the
formula:
M
---
R' = R x M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, MINUS, in the case of a distribution to
which Section 10.06(4) applies for which (i) the record date shall
occur on or before the record
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date for the distribution to which this Section 10.08 applies and
(ii) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section
10.08 applies, the fair market value (on the record date for the
distribution to which this Section 10.08 applies) of any Capital
Stock of the Company distributed in respect of each share of Common
Stock in such Section 10.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 10.08 applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this Section 10.08 is
being applied (including, in the case of cash dividends or other
cash distributions giving rise to an adjustment, all such cash
distributed concurrently).
The Board of Directors shall determine fair market values for the purpose of
this Section 10.08.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the distribution to
which this Section 10.08 applies.
For purposes of this Section 10.08, the term "EXTRAORDINARY CASH
DIVIDEND" shall mean any cash dividend with respect to the Common Stock the
amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentages set
forth in items (i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with respect to
a cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the eighty-five (85) consecutive
day period ending on the date prior to the Ex-Dividend Time with respect
to the cash dividend to which this provision is being applied equals or
exceeds 12.5% of the average of the Sale Prices during the period
beginning on the date after the first such Ex-Dividend Time in such period
and ending on the date prior to the Ex-Dividend Time with respect to the
cash dividend to which this provision is being applied (except that if no
other cash dividend has had an Ex-Dividend Time occurring in such period,
the period for calculating the average of the Sale Prices shall be the
period commencing 85 days prior to the date prior to the Ex-Dividend Time
with respect to the cash dividend to which this provision is being
applied), such cash
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dividend together with each other cash dividend with an Ex-Dividend Time
occurring in such 85-day period shall be deemed to be an Extraordinary
Cash Dividend and for purposes of applying the formula set forth above in
this Section 10.08, the value of "F" shall be equal to (w) the aggregate
amount of such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period MINUS (x) the
aggregate amount of such other cash dividends with Ex-Dividend Times
occurring in such period for which a prior adjustment in the Conversion
Rate was previously made under this Section 10.08.
(ii) If upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend, together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the 365-consecutive-day period
ending on the date prior to the Ex-Dividend Time with respect to the cash
dividend to which this provision is being applied equals or exceeds 25% of
the average of the Sale Prices during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the
date prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the period
for calculating the average of the Sale Prices shall be the period
commencing 365 days prior to the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied),
such cash dividend together with each other cash dividend with an
Ex-Dividend Time occurring in such 365-day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 10.08, the value of "F" shall be equal to (y)
the aggregate amount of such cash dividend together with amounts of the
other cash dividends with Ex-Dividend Times occurring in such period
MINUS (z) the aggregate amount of such other cash dividends with
Ex-Dividend Times occurring in such period for which a prior adjustment in
the Conversion Rate was previously made under this Section 10.08.
In making the determinations required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis and the average of the Sale
Prices, in each case during the period specified in items (i) and (ii) above, as
applicable, shall be appropriately adjusted to reflect the occurrence during
such period of any event described in Section 10.06.
In the event that, with respect to any distribution to which this Section
10.08 would otherwise apply, the difference "M-F" as
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defined in the above formula is less than $1.00 or "F" is greater than "M", then
the adjustment provided by this Section 10.08 shall not be made and in lieu
thereof the provisions of Section 10.14 shall apply to such distribution.
SECTION 10.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% (E.G., if the Conversion Rate is 4, an increase or
decrease of .04 (1% of 4)) in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 10 shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be, with one-half of a
cent and 5/10,000ths of a share being rounded upwards.
SECTION 10.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be
made for a transaction referred to in Section 10.06, 10.07, 10.08 or 10.14 if
Securityholders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value
of the Common Stock.
No adjustment need be made unless such adjustment, together with any other
adjustments similarly deferred equals at least 1% of the then current Conversion
Rate.
To the extent the Securities become convertible into cash pursuant to the
terms of Section 10.08 or 10.14, no adjustment need be made thereafter as to the
cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to the
extent, such adjustment results in the following quotient being less than the
par value of the Common Stock: (i) the Issue Price plus accrued Original Issue
Discount as of the date such adjustment would otherwise be effective divided by
(ii) the Conversion Rate as so adjusted.
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SECTION 10.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall file with the Trustee and the Conversion Agent a
notice of such adjustment and a certificate from the Company's independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The Conversion Agent will promptly mail such notice to
Securityholders at the Company's expense. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
SECTION 10.12. VOLUNTARY INCREASE. The Company from time to time may
increase the Conversion Rate by any amount and for any period of time
(PROVIDED, that such period is not less than 20 Business Days). Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders and file
with the Trustee and the Conversion Agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased Conversion
Rate takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Sections 10.06, 10.07 or
10.08.
SECTION 10.13. NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company takes any action that would require an adjustment
in the Conversion Rate pursuant to Section 10.06, 10.07 or 10.08 (unless
no adjustment is to occur pursuant to Section 10.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution of the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the transaction.
62
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SECTION 10.14. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. If
the Company is a party to a transaction subject to Section 5.01 (other than a
sale of all or substantially all of the assets of the Company in a transaction
in which the holders of Common Stock immediately prior to such transaction do
not receive securities, cash or other assets of the Company or any other person)
or a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock, the person obligated to deliver securities, cash or
other assets upon conversion of Securities shall enter into a supplemental
indenture. If the issuer of securities deliverable upon conversion of
Securities is an Affiliate of the successor Company, that issuer shall join in
the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Security
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 10. The successor Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.
If this Section applies, neither Section 10.06 nor 10.07 applies.
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 10.08, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 10.08, then, from and
after the record date for determining the holders of Common Stock entitled to
receive the distribution, a Holder of a Security that converts such Security in
accordance with the provisions of this Indenture shall upon such conversion be
entitled to receive, in addition to the shares of Common Stock into which the
Security is convertible, the kind and amount of securities, cash or other assets
comprising the distribution that such Holder would have received if such Holder
had converted the Security immediately prior to the record date for determining
the holders of Common Stock entitled to receive the distribution.
63
<PAGE>
SECTION 10.15. COMPANY DETERMINATION FINAL. Any determination that
the Company or the Board of Directors must make pursuant to this Article 10 is
conclusive.
SECTION 10.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no
duty to determine when an adjustment under this Article 10 should be made, how
it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 10. Each Conversion Agent (other than the Company or an Affiliate of
the Company) shall have the same protection under this Section 10.16 as the
Trustee.
SECTION 10.17. SIMULTANEOUS ADJUSTMENTS. If this Article 10 requires
adjustments to the Conversion Rate under more than one of Sections 10.06(4),
10.07 or 10.08, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06, second, the provisions of
Section 10.08 and, third, the provisions of Section 10.07.
SECTION 10.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the Conversion
Rate as so adjusted.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02 NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
64
<PAGE>
Cincinnati, Ohio 45202
Attention: Treasurer
Telephone: (513) 621-1300
Telecopy: (513) 621-6087
if to the Trustee:
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed by
first-class mail to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Trustee may require the Company to furnish either or
both of the following:
(1) an Officers' Certificate stating that, in the opinion of the
principal signer thereof, all conditions
65
<PAGE>
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that the principal signer of such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of the principal signer, he or
she has made such examination or investigation as is necessary to enable
such person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement that, in the opinion of such person, such covenant
or condition has been complied with.
SECTION 11.06 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.07 RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting
of the Securityholders. The Registrar, Conversion Agent and the Paying Agent
may make reasonable rules for their functions.
SECTION 11.08 LEGAL HOLIDAY. A "Legal Holiday" is any day other than
a Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and to the extent applicable no Original Issue Discount or
interest, if any, shall accrue for the intervening period.
66
<PAGE>
SECTION 11.09 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.11 SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 11.12 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
JACOR COMMUNICATIONS, INC.
By /s/ R. Christopher Weber
-----------------------------
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee
By /s/ Lucille Firrincieli
-----------------------------
Title: Vice President
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<PAGE>
EXHIBIT A
[FORM OF FACE OF LYON]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH
$1,000 OF PRINCIPAL AMOUNT OF THIS SECURITY IS $556.86 THE ISSUE DATE IS JUNE
12, 1996, AND THE YIELD TO STATED MATURITY IS 5.50% PER ANNUM (COMPUTED ON A
SEMIANNUAL BOND EQUIVALENT BASIS).
A-1
<PAGE>
JACOR COMMUNICATIONS, INC.
Liquid Yield Option-TM- Note due 2011
(Zero Coupon -- Senior)
No. 1
Issue Date: CUSIP No.
Issue Price: $
Original Issue Discount: $
(for each $1,000 Principal amount)
Jacor Communications, Inc., an Ohio corporation, promises to pay to
_________________________, or registered assigns, the Principal Amount of
__________ Dollars on June 12, 2011.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security. All capitalized terms used herein without definition
shall have the respective meanings assigned thereto in the Indenture referred to
on the other side of this Security.
______________________
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-2
<PAGE>
Additional provisions of this Security are set forth on the other side of
this Security.
JACOR COMMUNICATIONS, INC.
By: ________________________
Title:
ATTEST:
_______________________________
Date: ________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
________________________________
as Trustee, certifies that this Security
is one of the Securities referred to
in the within-mentioned Indenture.
By: __________________________________
Authorized Signatory
A-3
<PAGE>
[FORM OF REVERSE SIDE OF LYON]
LIQUID YIELD OPTION-TM- NOTE DUE 2011
(ZERO COUPON -- SENIOR)
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest therein.(1)
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph. If the Principal Amount hereof or any portion of such Principal
Amount is not paid when due (whether upon acceleration pursuant to Section 6.02
of the Indenture, upon the date set for payment of the Redemption Price pursuant
to paragraph 5 hereof, upon the date set for payment of a Purchase Price or
Change in Control Purchase Price pursuant to paragraph 6 hereof or upon the
Stated Maturity of this Security) or if shares of Common Stock (or cash in lieu
of fractional shares) in respect of a conversion of this Security in accordance
with the terms of Article 10 of the Indenture is not delivered when due, then in
each such case the overdue amount shall bear interest at the rate of 5.50% per
annum, compounded semiannually (to the extent that the payment of such interest
shall be legally enforceable), which interest shall accrue from the date such
overdue amount was due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount of the Security), in the period during which a Security remains
outstanding, shall accrue at 5.50% per annum, on a semiannual bond equivalent
basis using a 360-day year composed of
- -------------------
(1) This paragraph should only be added if the Security is issued in global
form.
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-4
<PAGE>
twelve 30-day months, commencing on the Issue Date of this Security, and cease
to accrue on the earlier of (a) the date on which the Principal Amount at Stated
Maturity hereof or any portion of such Principal Amount at Stated Maturity
becomes due and payable and (b) any Redemption Date, Conversion Date, Change in
Control Purchase Date, Purchase Date or other date on which such Original Issue
Discount shall cease to accrue in accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Jacor Communications,
Inc. (the "Company") will make payments in respect of the Securities to the
persons who are registered Holders of Securities at the close of business on the
Business Day preceding the Redemption Date or Stated Maturity, as the case may
be, or at the close of business on a Purchase Date, Change in Control Purchase
Date or Conversion Date, as the case may be. Holders must surrender Securities
to a Paying Agent to collect such payments in respect of the Securities. The
Company will pay cash amounts in money of The United States of America that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments in respect of a certificated
Security, if applicable, by check payable in such money; provided that payment
by wire transfer of immediately available funds will be required with respect to
payments in respect of all Global Securities and all other Securities the
Holders of which shall have provided written wire transfer instructions to the
Company or the Paying Agent five days before the payment date.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, The Bank of New York, a New York banking corporation, as trustee
(the "Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar, upon notice to the Trustee and the Holders. The Company or any of
its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture, dated as of June 12,
1996 (the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, and,
- -------------------
(1) This paragraph should only be added if the Security is issued in global
form.
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-5
<PAGE>
as in effect on the date of the Indenture (the "TIA"), except as provided in
Section 9.03 of the Indenture. Capitalized terms used herein or on the face
hereof and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
the aggregate Principal Amount at Stated Maturity specified in Section 2.02 of
the Indenture (subject to Section 2.07 of the Indenture). The Indenture does
not limit other indebtedness of the Company, secured or unsecured.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, PROVIDED, that the
Securities are not redeemable prior to June 12, 2001.
The table below shows the Redemption Prices of a Security per $1,000
Principal Amount at Stated Maturity on the dates shown below and at Stated
Maturity, which prices reflect accrued Original Issue Discount calculated to
each such date. The Redemption Price of a Security redeemed between such dates
would include an additional amount reflecting the additional Original Issue
Discount accrued from and including the next preceding date in the table through
the actual Redemption Date.
(2)
ACCRUED
(1) ORIGINAL (3)
LYON ISSUE REDEMPTION
ISSUE DISCOUNT PRICE
REDEMPTION DATE PRICE AT 5.50% (1) + (2)
- --------------- ----- -------- ----------
June 12, 2001. . . . . . . . . $443.14 $138.11 $581.25
June 12, 2002. . . . . . . . . 443.14 170.51 613.65
June 12, 2003. . . . . . . . . 443.14 204.73 647.87
June 12, 2004. . . . . . . . . 443.14 240.85 683.99
June 12, 2005. . . . . . . . . 443.14 278.99 722.13
June 12, 2006. . . . . . . . . 443.14 319.25 762.39
June 12, 2007. . . . . . . . . 443.14 361.76 804.90
June 12, 2008. . . . . . . . . 443.14 406.64 849.78
June 12, 2009. . . . . . . . . 443.14 454.02 897.16
June 12, 2010. . . . . . . . . 443.14 504.04 947.18
At maturity. . . . . . . . . . 443.14 556.86 1,000.00
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-6
<PAGE>
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Stated Maturity of such Securities, upon
delivery of a Purchase Notice containing the information set forth in the
Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on such
Purchase Date and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture. Such Purchase Price (equal to the Issue
Price plus accrued Original Issue Discount through such Purchase Date) may be
paid, at the option of the Company, in cash or by the issuance and delivery of
shares of Common Stock of the Company, or in any combination thereof.
PURCHASE DATE PURCHASE PRICE
------------- --------------
June 12, 2001 $581.25
June 12, 2006 $762.39
Subject to the terms and conditions of the Indenture, if any Change in
Control occurs on or prior to June 12, 2001, the Company shall, at the option of
the Holder, purchase all Securities for which a Change in Control Purchase
Notice shall have been delivered as provided in the Indenture and not withdrawn,
on the date that is 35 Business Days after the occurrence of such Change in
Control, for a Change in Control Purchase Price equal to the Issue Price plus
accrued Original Issue Discount through the Change in Control Purchase Date,
which Change in Control Purchase Price shall be paid in cash.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture prior to
the close of business on the Purchase Date or Change in Control Purchase Date,
as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control Purchase
Price of all Securities or portions thereof to be purchased as of the Purchase
Date or the Change in Control Purchase Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Purchase Date or the
Change in Control Purchase Date, as the case may be, Original Issue Discount
ceases to accrue on such Securities (or portions thereof) on and after such
date, and the Holders thereof shall have no other rights as such (other than the
right to receive the Purchase Price or Change in Control Purchase Price, as the
case may be, upon surrender of such Security).
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-7
<PAGE>
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption
Price of all Securities (or portions thereof) to be redeemed on the Redemption
Date is deposited with the Paying Agent prior to or on the Redemption Date, on
and after such date Original Issue Discount ceases to accrue on such Securities
or portions thereof. Securities in denominations larger than $1,000 of
Principal Amount may be redeemed in part but only in integral multiples of
$1,000 of Principal Amount.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security may
convert it into Common Stock of the Company at any time before the close of
business on June 12, 2011; PROVIDED, HOWEVER, that if a Security is called for
redemption, the Holder may convert it at any time before the close of business
on the Redemption Date. The number of shares of Common Stock to be delivered
upon conversion of a Security into Common Stock per $1,000 of Principal Amount
shall be equal to the Conversion Rate. A Security in respect of which a Holder
has delivered a Purchase Notice or Change in Control Purchase Notice exercising
the option of such Holder to require the Company to purchase such Security may
be converted only if the notice of exercise is withdrawn in accordance with the
terms of the Indenture.
The initial Conversion Rate is 13.412 shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events described in the
Indenture. The Company will deliver cash or a check in lieu of any fractional
share of Common Stock.
To convert a Security a Holder must (i) complete and manually sign the
conversion notice on the back of the Security (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent (or
the office or agency referred to in Section 4.05 of the Indenture), (ii) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (iii) pay any transfer or similar tax, if
required.
If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
total Principal Amount of the Securities converted.
A Holder may convert a portion of a Security if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. No payment or adjustment
will be made for dividends on the Common Stock except as provided in the
Indenture. On conversion of a Security, that
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-8
<PAGE>
portion of accrued Original Issue Discount attributable to the period from the
Issue Date to the Conversion Date with respect to the converted Security shall
not be cancelled, extinguished or forfeited, but rather shall be deemed paid in
full to the Holder thereof through the delivery of the Common Stock in exchange
for the Security being converted pursuant to the terms hereof; and the fair
market value of such Common Stock (together with any cash payment in lieu of
fractional shares of Common Stock) shall be treated as issued, to the extent
thereof, first in exchange for Original Issue Discount accrued through the
Conversion Date, and the balance, if any, of such fair market value of such
shares of Common Stock (and any such cash payment) shall be treated as issued in
exchange for the Issue Price of the Security being converted pursuant to the
provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Sale Price at the Time of
Determination; and distributions to such holders of assets or debt securities of
the Company or certain rights to purchase securities of the Company (excluding
certain cash dividends or distributions). However, no adjustment need be made
if Securityholders may participate in the transaction or in certain other cases.
The Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange of the type specified in the Indenture, or certain transfers of all or
substantially all of its assets to another person, or in certain other
circumstances described in the Indenture, the right to convert a Security into
Common Stock may be changed into a right to convert it into securities, cash or
other assets of the Company or another person.
9. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, together with accrued interest if any, to the Redemption Date,
by one or more investment bankers or other purchasers who may agree with the
Company to purchase such Securities from the Holders and to make payment for
such Securities to the Trustee in trust for such Holders.
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-9
<PAGE>
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
12. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, PROVIDED,
HOWEVER, that at the Company's request, the Trustee or such Paying Agent, before
being required to make any such return, shall at the expense of the Company
cause to be published once in THE WALL STREET JOURNAL or another newspaper of
national circulation or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or mailing, any
unclaimed money or securities then remaining will be returned to the Company.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person, and the Trustee and the Paying
Agent shall have no further liability with respect to such money or securities
for that period commencing after the return thereof.
13. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-10
<PAGE>
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, or to comply with Article 5 or Section 10.14 of the Indenture
or to make any change that does not adversely affect the rights of any
Securityholder.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price, as the case may be,
in respect of the Securities when the same becomes due and payable; (ii) failure
either to deliver shares of Common Stock (or cash in lieu of fractional shares)
in accordance with the terms of the Indenture when such Common Stock (or cash in
lieu of fractional shares) is required to be delivered following conversion of a
Security and such failure is not remedied for a period of 10 days; (iii) failure
by the Company to comply with other agreements in the Indenture or the
Securities, subject to notice and lapse of time; (iv) default (A) in the payment
of any principal on any debt for borrowed money of the Company (excluding any
non-recourse debt), in an aggregate principal amount in excess of $10 million
when due at its final maturity after giving effect to any applicable grace
period and the holder thereof shall have taken affirmative action to enforce the
payment thereof, or (B) in the performance of any term or provision of any debt
for borrowed money of the Company (excluding any non-recourse debt) in an
aggregate principal amount in excess of $10 million that results in such debt
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, unless, in the case of either clause (A) or
(B) above, (x) such acceleration or action to enforce payment, as the case may
be, has been rescinded or annulled, (y) such debt has been discharged or (z) a
sum sufficient to discharge in full such debt has been deposited in trust by or
on behalf of the Company, in each case, within a period of 10 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Securities, a written notice specifying such default or defaults
and stating that such notice is a "Notice of Default" hereunder; or (v) certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding, may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default that will result in the Securities becoming due and
payable immediately upon the occurrence of such Events of Default.
- ------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-11
<PAGE>
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) above) if it determines that withholding notice is in their interests.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Certificate of Authentication on the other side of
this Security.
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common) and CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
19. GOVERNING LAW
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
_______________________
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-12
<PAGE>
------------------------------------
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
_______________________
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-13
<PAGE>
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill To convert this Security into
in the form below: Common Stock of the Company,
check the box:
I or we assign and transfer -----
this Security to : :
: :
------------------- -----
(Insert assignee's soc.
sec. or tax ID no.) To convert only part of this
Security, state the Principal
______________________________ Amount to be converted (which
must be $1,000 or an integral
______________________________ multiple of $1,000):
--------------------
______________________________ :$ :
--------------------
______________________________
(Print or type assignee's
name, address and zip code) If you want the stock
certificate made out in
and irrevocably appoint another person's name, fill
____________________ agent in the form below:
to transfer this Security on
the books of the Company. The -------------------
agent may substitute another : :
to act for him. -------------------
(Insert person's soc.
EXCHANGE FORM sec. or tax ID no.)
To exchange its beneficial ______________________________
interest in Global Security
held by the Depositary for a ______________________________
Security or Securities in
definitive, registered form of ______________________________
authorized denominations and an
aggregate principal amount equal ______________________________
to its beneficial interest in (Print or type person's name,
such Global Security, a Holder address and zip code)
should check the box
-----
: :
: :
-----
_________________________________________________________________
Date:_________________ Your Signature:_________________________*
_______________________
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-14
<PAGE>
_________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
* Your signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
_______________________
- -TM- Trademark of Merrill Lynch & Co., Inc.
A-15
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES***
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized signatory of
Principal Amount Principal Amount Security following Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------------
*** This schedule should only be added if the Security is issued in global
form.
A-16
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JCAC, INC.,
Issuer,
and
JACOR COMMUNICATIONS, INC.,
Initial Guarantor
and
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION
Trustee
------------------------------
INDENTURE
Dated as of June 12, 1996
-------------------
$100,000,000
10 1/8% Senior Subordinated Notes due 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE..................... 1
SECTION 1.1. DEFINITIONS........................................ 1
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA.................. 30
SECTION 1.3. RULES OF CONSTRUCTION.............................. 31
ARTICLE II
THE SECURITIES.......................... 32
SECTION 2.1. FORM AND DATING.................................... 32
SECTION 2.2. EXECUTION AND AUTHENTICATION....................... 32
SECTION 2.3. REGISTRAR AND PAYING AGENT......................... 33
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST............... 34
SECTION 2.5. SECURITYHOLDER LISTS............................... 35
SECTION 2.6. TRANSFER AND EXCHANGE.............................. 35
SECTION 2.7. REPLACEMENT SECURITIES............................. 39
SECTION 2.8. OUTSTANDING SECURITIES............................. 39
SECTION 2.9. TREASURY SECURITIES................................ 40
SECTION 2.10. TEMPORARY SECURITIES............................... 40
SECTION 2.11. CANCELLATION....................................... 40
SECTION 2.12. DEFAULTED INTEREST................................. 41
ARTICLE III
REDEMPTION............................ 42
SECTION 3.1. RIGHT OF REDEMPTION.................................... 42
SECTION 3.2. NOTICES TO TRUSTEE AND PAYING AGENT.................... 43
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED................. 43
SECTION 3.4. NOTICE OF REDEMPTION................................... 44
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION......................... 45
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE............................ 46
SECTION 3.7. SECURITIES REDEEMED IN PART............................ 46
ARTICLE IV
COVENANTS............................ 47
SECTION 4.1. PAYMENT OF SECURITIES.............................. 47
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.................... 47
i
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PAGE
----
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.................. 48
SECTION 4.4. CORPORATE EXISTENCE................................ 49
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.................. 49
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE............ 50
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.......... 51
SECTION 4.8. REPORTS............................................ 51
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT
COMPANY............................................ 52
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH
AFFILIATES......................................... 52
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL
INDEBTEDNESS AND DISQUALIFIED CAPITAL
STOCK.............................................. 53
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER
PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES....................................... 54
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS;
LIENS.............................................. 55
SECTION 4.14. LIMITATION ON SALE OF ASSETS
AND SUBSIDIARY STOCK............................... 55
SECTION 4.15. LIMITATION ON ASSET SWAPS.......................... 61
SECTION 4.16. LIMITATION ON LINES OF BUSINESS.................... 62
SECTION 4.17. RESTRICTION ON SALE AND ISSUANCE OF
SUBSIDIARY STOCK................................... 62
SECTION 4.18. LIMITATION ON TRANSACTIONS PRIOR TO
CONSUMMATION OF THE MERGER......................... 62
SECTION 4.19. JACOR ACTION CONCURRENT WITH
CONSUMMATION OF THE MERGER......................... 63
SECTION 4.20. WAIVER OF STAY, EXTENSION OR
USURY LAWS......................................... 63
ARTICLE V
SUCCESSOR CORPORATION...................... 63
SECTION 5.1. LIMITATION ON MERGER, SALE OR
CONSOLIDATION...................................... 63
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.................. 64
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES.................. 65
SECTION 6.1. EVENTS OF DEFAULT.................................. 65
ii
<PAGE>
PAGE
----
SECTION 6.2. ACCELERATION OF MATURITY DATE;
RESCISSION AND ANNULMENT........................... 67
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND
SUITS FOR ENFORCEMENT BY TRUSTEE................... 69
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM................... 70
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES........................... 71
SECTION 6.6. PRIORITIES......................................... 71
SECTION 6.7. LIMITATION ON SUITS................................ 72
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO
RECEIVE PRINCIPAL, PREMIUM AND INTEREST............ 73
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE..................... 73
SECTION 6.10. DELAY OR OMISSION NOT WAIVER....................... 73
SECTION 6.11. CONTROL BY HOLDERS................................. 74
SECTION 6.12. WAIVER OF PAST DEFAULT............................. 74
SECTION 6.13. UNDERTAKING FOR COSTS.............................. 75
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES................. 75
ARTICLE VII
TRUSTEE............................. 76
SECTION 7.1. DUTIES OF TRUSTEE.................................. 76
SECTION 7.2. RIGHTS OF TRUSTEE.................................. 77
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE....................... 79
SECTION 7.4. TRUSTEE'S DISCLAIMER............................... 79
SECTION 7.5. NOTICE OF DEFAULT.................................. 79
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS...................... 80
SECTION 7.7. COMPENSATION AND INDEMNITY......................... 80
SECTION 7.8. REPLACEMENT OF TRUSTEE............................. 81
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC................... 82
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...................... 83
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY................................ 83
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE....... 83
SECTION 8.1. DISCHARGE; OPTION TO EFFECT LEGAL
DEFEASANCE OR COVENANT DEFEASANCE.................. 83
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE..................... 84
SECTION 8.3. COVENANT DEFEASANCE................................ 84
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT
iii
<PAGE>
PAGE
----
DEFEASANCE......................................... 85
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS..................... 87
SECTION 8.6. REPAYMENT TO THE COMPANY........................... 88
SECTION 8.7. REINSTATEMENT...................................... 89
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS............... 89
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT
CONSENT OF HOLDERS................................. 89
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES
AND WAIVERS WITH CONSENT OF HOLDERS................ 90
SECTION 9.3. COMPLIANCE WITH TIA................................ 92
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.................. 92
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.............. 93
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.................... 93
ARTICLE X
SUBORDINATION.......................... 94
SECTION 10.1. SECURITIES SUBORDINATED TO SENIOR DEBT............. 94
SECTION 10.2. NO PAYMENT ON SECURITIES IN CERTAIN
CIRCUMSTANCES...................................... 94
SECTION 10.3. SECURITIES SUBORDINATED TO PRIOR
PAYMENT OF ALL SENIOR DEBT ON
DISSOLUTION, LIQUIDATION OR
REORGANIZATION..................................... 97
SECTION 10.4. SECURITYHOLDERS TO BE SUBROGATED
TO RIGHTS OF HOLDERS OF SENIOR DEBT................ 98
SECTION 10.5. OBLIGATIONS OF THE COMPANY AND THE
GUARANTORS UNCONDITIONAL........................... 99
SECTION 10.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS
NOT PROHIBITED IN ABSENCE OF NOTICE................ 100
SECTION 10.7. APPLICATION BY TRUSTEE OF ASSETS
DEPOSITED WITH IT.................................. 100
SECTION 10.8. SUBORDINATION RIGHTS NOT IMPAIRED
BY ACTS OR OMISSIONS OF THE COMPANY, THE GUARANTORS OR
HOLDERS OF SENIOR DEBT............................. 101
SECTION 10.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO
EFFECTUATE SUBORDINATION OF SECURITIES............. 101
SECTION 10.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT............... 102
iv
<PAGE>
PAGE
----
SECTION 10.11. ARTICLE X NOT TO PREVENT EVENTS OF
DEFAULT............................................ 102
SECTION 10.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS
OF SENIOR DEBT..................................... 102
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE................... 103
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION
OF THE HOLDER UPON A CHANGE OF CONTROL............. 103
SECTION 11.2. REPURCHASE OF SECURITIES AT THE OPTION
OF THE HOLDER UPON FAILURE TO
CONSUMMATE THE MERGER.............................. 106
ARTICLE XII
GUARANTY............................. 109
SECTION 12.1. GUARANTY........................................... 109
SECTION 12.2. EXECUTION AND DELIVERY OF GUARANTY................. 112
SECTION 12.3. FUTURE SUBSIDIARY GUARANTORS....................... 112
SECTION 12.4. GUARANTOR MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS................................... 113
SECTION 12.5. RELEASE OF GUARANTORS.............................. 114
SECTION 12.6. CERTAIN BANKRUPTCY EVENTS.......................... 115
ARTICLE XIII
MISCELLANEOUS.......................... 116
SECTION 13.1. TIA CONTROLS....................................... 116
SECTION 13.2. NOTICES............................................ 116
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH
OTHER HOLDERS...................................... 117
SECTION 13.4. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT............................... 117
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION......................................... 118
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT,
REGISTRAR.......................................... 118
SECTION 13.7. NON-BUSINESS DAYS.................................. 119
SECTION 13.8. GOVERNING LAW...................................... 119
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER
v
<PAGE>
PAGE
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AGREEMENTS......................................... 119
SECTION 13.10. NO RECOURSE AGAINST OTHERS......................... 120
SECTION 13.11. SUCCESSORS......................................... 120
SECTION 13.12. DUPLICATE ORIGINALS................................ 120
SECTION 13.13. SEVERABILITY....................................... 120
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC................... 120
SIGNATURES........................................................... 122
Exhibit A - FORM OF SECURITY
Exhibit B - FORM OF GUARANTEE
Annex I - SELECTED DEFINITIONS AND SECTIONS
vi
<PAGE>
INDENTURE, dated as of June 12, 1996, by and among JCAC, Inc., a
Florida corporation (the "Company"), Jacor Communications, Inc., an Ohio
corporation (the "Initial Guarantor") and First Trust of Illinois, National
Association, as Trustee.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACCELERATION NOTICE" shall have the meaning specified in Section
6.2.
"ACCEPTANCE AMOUNT" shall have the meaning specified in Section
4.14.
"ACQUIRED INDEBTEDNESS" means Indebtedness or Disqualified Capital
Stock of any person existing at the time such person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with
either of the Company or one of its Subsidiaries; provided, that such
Indebtedness was not incurred in anticipation of, or in connection with, and was
outstanding prior to such person becoming a Subsidiary of the Company.
"ACQUISITION" means the purchase or other acquisition of any
person or substantially all the assets of any person by any other person,
whether by purchase, merger, consolidation, or other transfer, and whether or
not for consideration.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, PROVIDED, that, a Beneficial Owner of 10% or more of the total
voting power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
<PAGE>
"AFFILIATE TRANSACTION" shall have the meaning specified in
Section 4.10.
"AGENT" means any authenticating agent, Registrar, Paying Agent or
transfer agent.
"ASSET SALE" shall have the meaning specified in Section 4.14.
"ASSET SALE DATE" shall have the meaning specified in Section
4.14.
"ASSET SALE OFFER" shall have the meaning specified in Section
4.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified in
Section 4.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified in
Section 4.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified in
Section 4.14.
"ASSET SWAP" means the execution of a definitive agreement,
subject only to regulatory approval and other customary closing conditions, that
the Company in good faith believes will be satisfied, for a substantially
concurrent purchase and sale, or exchange, of Productive Assets between the
Company or any of its Subsidiaries and another person or group of affiliated
persons; provided that any amendment to or waiver of any closing condition which
individually or in the aggregate is material to the Asset Swap shall be deemed
to be a new Asset Swap.
"AVERAGE LIFE" means, as of the date of determination, with
respect to any security or instrument, the quotient obtained by dividing (i) the
sum of (a) the product of the number of years from the date of determination to
the date or dates of each successive scheduled principal (or redemption) payment
of such security or instrument and (b) the amount of each such respective
principal (or redemption) payment by (ii) the sum of all such principal (or
redemption) payments.
2
<PAGE>
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.
"BENEFICIAL OWNER" or "BENEFICIAL OWNER" for purposes of the
definition of Change of Control has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act (as in effect on the Issue Date) whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"BOARD OF DIRECTORS" means, with respect to any person, the Board
of Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"BOARD RESOLUTION" means, with respect to any person, a duly
adopted resolution of the Board of Directors of such or the executive committee
of such Board of Directors of such person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITAL STOCK" means, with respect to any corporation, any and
all shares, interests, rights to purchase (other than convertible or
exchangeable Indebtedness), warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"CAPITAL LEASE" means a lease, the payments on which would be
capitalized for financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means rental obligations under a
lease that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
3
<PAGE>
"CASH" or "CASH" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"CASH EQUIVALENT" means (i) securities issued directly or fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits and
certificates of deposit with, and commercial paper issued by the parent
corporation of, any domestic commercial bank of recognized standing having
capital and surplus in excess of $500.0 million and commercial paper issued by
others rated at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing within one year after the date of
acquisition.
"CC" means Citicasters Co., an Ohio corporation and a wholly owned
subsidiary of Citicasters Inc.
"CHANGE OF CONTROL" means (a) prior to the consummation of the
Merger
(i) any merger or consolidation of the Company with or into
any person or any sale, transfer or other conveyance, whether direct or
indirect, of all or substantially all of any of the assets of the Company, on a
consolidated basis, in one transaction or a series of related transactions, if,
immediately after giving effect to such transaction(s), any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than an Excluded Person) is or becomes
the "beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the transferee(s) or
surviving entity or entities,
(ii) any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than an Excluded Person) is or becomes the "beneficial
owner," directly or indirectly, of more than 50% of the total voting power in
the aggregate of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors, or
4
<PAGE>
(iii) during any period of 12 consecutive months after the
Issue Date, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; and
(b) subsequent to the consummation of the Merger, any transaction or
series of transactions in which any of the following occurs:
(i) any person or group (within the meaning of Rule 13d-3
under the Exchange Act and Sections 13(d) and 14(d) of the Exchange Act) other
than Zell/Chilmark or any of its Affiliates, becomes the direct or indirect
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of (A)
greater than 50% of the total voting power (on a fully diluted basis as if all
convertible securities had been converted) entitled to vote in the election of
directors of the Company or CC, or the surviving person (if other than the
Company), or (B) greater than 20% of the total voting power (on a fully diluted
basis as if all convertible securities had been converted) entitled to vote in
the election of directors of the Company or CC, or the surviving person (if
other the Company), and such person or group has the ability to elect, directly
or indirectly, a majority of the members of the Board of Directors of the
Company; or
(ii) the Company or CC consolidates with or merges into
another person, another person consolidates with or merges into the Company or
CC, the Company or CC issues shares of its Capital Stock or all or substantially
all of the assets of the Company or CC are sold, assigned, conveyed,
transferred, leased or otherwise disposed of to any person as an entirety or
substantially as an entirety in one transaction or a series of related
transactions and the effect of such consolidation, merger, issuance or sale is
as described in clause (i) above. Notwithstanding the foregoing, no Change of
Control shall be deemed to have occurred by virtue of (i) the Company or any of
its employee benefit or stock plans filing (or being required to file after the
lapse of time) a Schedule 13D or 14D-1 (or any successor or
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similar schedule, form or report under the Exchange Act) or (ii) the purchase by
one or more underwriters of Capital Stock of the Company in connection with a
Public Offering; provided however, upon the earlier of (x) the maturity of the
Citicasters Securities, (y) the date upon which defeasance of the Citicasters
Securities becomes effective, and (z) the date on which there are no longer any
Citicasters Securities outstanding under the terms of the governing indenture,
then Change of Control shall have the meaning set forth in clause (a) above.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning specified
in Section 11.1.
"CHANGE OF CONTROL PURCHASE DATE" shall have the meaning specified
in Section 11.1.
"CHANGE OF CONTROL PURCHASE PRICE" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL PUT DATE" shall have the meaning specified in
Section 11.1.
"CITICASTERS" means Citicasters Inc., a Florida corporation.
"CITICASTERS ASSET SALE REPURCHASE AMOUNT" shall have the meaning
set forth in Annex I hereto.
"CITICASTERS INDENTURE" means the indenture which governs the
terms and provisions of the Citicasters Securities, as amended or supplemented
from time to time in accordance with the terms thereof.
"CITICASTERS OFFER" shall have the meaning specified in Section
11.2.
"CITICASTERS OFFER PERIOD" shall have the meaning specified in
Section 11.2.
"CITICASTERS PURCHASE DATE" shall have the meaning specified in
Section 11.2.
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"CITICASTERS PURCHASE PRICE" shall have the meaning specified in
Section 11.2.
"CITICASTERS PUT DATE" shall have the meaning specified in Section
11.2.
"CITICASTERS SECURITIES" means the 9/ /% Senior Subordinated Notes
due February 15, 2004 issued by Citicasters Inc. pursuant to an indenture dated
as of February 18, 1994 between Great American Communications Company, a Florida
corporation (and predecessor to Citicasters), and Shawmut Bank Connecticut,
National Association as trustee; as amended by the First Supplemental Indenture
dated as of August 22, 1994 between Citicasters Inc. and Shawmut Bank
Connecticut, National Association as trustee; as amended by the Second
Supplemental Indenture dated as of June 6, 1996 between Citicasters Inc. and
Fleet National Bank (formerly Shawmut Bank Connecticut, National Association) as
Trustee.
"CITICASTERS SECURITIES ASSET SALE OFFER" means an offer to
purchase the Citicasters Securities in accordance with the procedures set forth
in Annex I hereto.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the SEC.
"COMPANY" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"CONSOLIDATED" or "CONSOLIDATED" means determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
income tax expense, (ii) Consolidated depreciation and amortization expense,
provided that consolidated depreciation and amortization of a Subsidiary that is
a less than wholly owned Subsidiary shall only be added to the extent of
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the equity interest of the Company in such Subsidiary, (iii) other noncash
charges (including amortization of goodwill and other intangibles), (iv)
Consolidated Fixed Charges, and less the amount of all cash payments made by
such person or any of its Subsidiaries during such period to the extent such
payments relate to non-cash charges that were added back in determining
Consolidated EBITDA for such period or any prior period.
"CONSOLIDATED FIXED CHARGES" of any person means, for any period,
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) of such person
and its Consolidated Subsidiaries during such period, including (i) original
issue discount and non-cash interest payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment obligations, and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, and
(b) the amount of dividends accrued or payable (or guaranteed) by such person or
any of its Consolidated Subsidiaries in respect of Preferred Stock (other than
by Subsidiaries of such person to such person or such person's wholly owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (y) interest expense
attributable to any Indebtedness represented by the guaranty by such person or a
Subsidiary of such person of an obligation of another person shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means, with respect to any person for
any period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains or losses which are
either noncash or extraordinary (as determined in accordance with GAAP) or are
either unusual or nonrecurring (including any gain from the sale or
8
<PAGE>
other disposition of assets outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the net income, if positive, of any
person, other than a wholly owned Consolidated Subsidiary, in which such person
or any of its Consolidated Subsidiaries has an interest, except to the extent of
the amount of any dividends or distributions actually paid in cash to such
person or a wholly owned Consolidated Subsidiary of such person during such
period, but in any case not in excess of such person's PRO RATA share of such
person's net income for such period, (c) the net income or loss of any person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition, (d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Consolidated Subsidiary.
"CONSOLIDATED SUBSIDIARY" means, for any person, each Subsidiary
of such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
"COVENANT DEFEASANCE" shall have the meaning specified in Section
8.3.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section
2.12.
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that does not include the paragraph and
schedule referred to in footnotes 1 and 2, respectively.
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<PAGE>
"DEPOSITARY" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"DISQUALIFIED CAPITAL STOCK" means (a) except as set forth in (b),
with respect to any person, Equity Interests of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Securities, and (b) with respect to
any Subsidiary of such person (including with respect to any Subsidiary of the
Company), any Equity Interests other than any common equity with no preference,
privileges, or redemption or repayment provisions.
"DTC" shall have the meaning specified in Section 2.3.
"EQUITY INTEREST" of any person means any shares, interests,
participations or other equivalents (however designated) in such person's
equity, and shall in any event include any Capital Stock issued by, or
partnership interests in, such person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"EVENT OF DEFAULT" shall have the meaning specified in Section
6.1.
"EVENT OF LOSS" means, with respect to any property or asset, any
(i) loss, destruction or damage of such property or asset or (ii) any
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such property or asset, or confiscation or requisition of the use
of such property or asset.
"EXCESS PROCEEDS" shall have the meaning specified in Section
4.14.
10
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"EXCLUDED PERSON" means Zell/Chilmark Fund L.P. and all Related
Persons of such person.
"EXCLUDED SUBSIDIARY" means each of Jacor National Corp., a
Delaware corporation; WIBX Incorporated, a New York corporation; and Marathon
Communications, Inc., a New York corporation.
"EXEMPTED AFFILIATE TRANSACTION" means (a) customary employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) dividends
permitted under Section 4.3 of this Indenture payable, in form and amount, on a
PRO RATA basis to all holders of Common Stock of the Initial Guarantor, (c)
transactions solely between the Company and any of its Wholly owned Subsidiaries
or solely among Wholly owned Subsidiaries of the Company, and (d) payments to
Zell/Chilmark Fund L.P or its Affiliates for reasonable and customary fees and
expenses for financial advisory and investment banking services provided to the
Initial Guarantor and the Company, and (e) payments to the Initial Guarantor
made in accordance with the Tax Sharing Agreement.
"EXISTING ASSETS" means assets of the Company existing at the
Issue Date (other than cash, Cash Equivalents or inventory held for resale in
the ordinary course of business) and including proceeds of any sale of such
assets and assets acquired in whole or in part with proceeds from the sale from
any such assets.
EXISTING CREDIT FACILITY" means the Credit Agreement dated as of
February 20, 1996 by and among Jacor Communications, Inc., Banque Paribas, as
Agent, The First National Bank of Boston and Bank of America Illinois, as
Co-Agents, and the banks from time to time party thereto, including any related
notes, guarantees, collateral documents, instruments, letters of credit,
reimbursement obligations and other agreements executed by Jacor Communications,
Inc. and its subsidiaries in connection therewith as any of the foregoing may be
amended, restated, supplemented, waived or otherwise modified from time to time.
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<PAGE>
"EXISTING INDEBTEDNESS" means, with respect to the Company,
Indebtedness existing or outstanding at the Issue Date.
"FAIR MARKET VALUE" or "FAIR MARKET VALUE" means, with respect
to any assets or properties, the amount at which such assets or properties would
change hands between a willing buyer and a willing seller, within a commercially
reasonable time, each having reasonable knowledge of the relevant facts, neither
being under a compulsion to sell or buy, as such amount is determined by (i) the
Board of Directors of either of the Company acting in good faith or (ii) an
appraisal or valuation firm of national or regional standing selected by the
Company, with experience in the appraisal or valuation of properties or assets
of the type for which Fair Market Value is being determined.
"FINAL PUT DATE" shall have the meaning specified in Section 4.14.
"FUTURE SUBSIDIARY GUARANTOR" shall have the meaning specified in
Section 12.3.
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession as in effect on the Issue Date unless otherwise
specified.
"GLOBAL SECURITY" means a Security that contains the paragraph
and schedule referred to in footnotes 1 and 2, respectively, in the form of
Security attached hereto as Exhibit A.
"GUARANTOR" means (i) the Initial Guarantor identified in the
following sentence and (ii) any Future Subsidiary Guarantors that become
Guarantors pursuant to the terms of this Indenture, but excluding any Persons
whose guarantees have been released pursuant to the terms of this Indenture.
The Initial Guarantor is Jacor Communications, Inc., an Ohio corporation.
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<PAGE>
"GUARANTY" shall have the meaning provided in Section 12.1.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Security is registered on the Registrar's books.
"INCUR" or "INCUR" shall have the meaning specified in Section
4.11.
"INCURRENCE DATE" shall have the meaning specified in Section
4.11.
"INDEBTEDNESS" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such any person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors, (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v)
relating to any Capitalized Lease Obligation, or (vi) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (b) all net obligations of such person under Interest Swap and
Hedging Obligations; (c) all liabilities and obligations of others of the kind
described in the preceding clause (a) or (b) that such person has guaranteed or
that is otherwise its legal liability or which are secured by any assets or
property of such person and all obligations to purchase, redeem or acquire any
Equity Interests; and (d) all Disqualified Capital Stock of such person (valued
at the greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends). For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified Capital Stock, such Fair Market Value to be
determined in good faith by the board of directors
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<PAGE>
of the issuer (or managing general partner of the issuer) of such Disqualified
Capital Stock.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"INITIAL GUARANTOR" means Jacor Communications, Inc., an Ohio
corporation.
"INTEREST PAYMENT DATE" means the stated due date of an
installment of interest on the Securities.
"INTEREST SWAP AND HEDGING OBLIGATION" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"INVESTMENT" by any person in any other person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to make any such acquisition; (b) the making
by such person of any deposit with, or advance, loan or other extension of
credit to, such other person (including the purchase of property from another
person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such other person) or any commitment to make any such
advance, loan or extension (but excluding accounts receivable or deposits
arising in the ordinary course of business); (c) other than guarantees of
Indebtedness of the Company or any Guarantors to the extent permitted by the
covenant "Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock" or the defini-
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tion of Permitted Indebtedness, the entering into by such person of any
guarantee of, or other credit support or contingent obligation with respect
to, Indebtedness or other liability of such other person (other than the
endorsement of instruments for deposit or collection in the ordinary course of
business); and (d) the making of any capital contribution by such person to
such other person.
"ISSUE DATE" means the date of first issuance of the Securities
under this Indenture.
"JACOR" means Jacor Communications, Inc., an Ohio corporation.
"JCAC" means JCAC, Inc., a Florida corporation and Wholly owned
Subsidiary of Jacor.
"JUNIOR SECURITY" means any Qualified Capital Stock and any
Indebtedness of the Company or a Guarantor, as applicable, that is subordinated
in right of payment to Senior Debt at least to the same extent as the Securities
or the Guarantees, as applicable, and has no scheduled installment of principal
due, by redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities; provided, that in the case of subordination in
respect of Senior Debt under the New Credit Facility, "Junior Security" shall
mean any Qualified Capital Stock and any Indebtedness of the Company or the
Guarantors, as applicable, that (i) has a final maturity date occurring after
the final maturity date of, all Senior Debt outstanding under the New Credit
Facility on the date of issuance of such Qualified Capital Stock or
Indebtedness, (ii) is unsecured, (iii) has an Average Life longer than the
security for which such Qualified Capital Stock or Indebtedness is being
exchanged, and (iv) by their terms or by law are subordinated to Senior Debt
outstanding under the New Credit Facility on the date of issuance of such
Qualified Capital Stock or Indebtedness at least to the same extent as the
Securities.
"LEGAL DEFEASANCE" shall have the meaning specified in Section
8.2.
"LEVERAGE RATIO" of any person on any date of determination (the
"Transaction Date") means the ratio, on a PRO FORMA basis, of (a) the sum of
the aggregate outstanding amount of Indebtedness and Disqualified Capital Stock
of
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such person and its Subsidiaries as of the date of calculation on a consolidated
basis in accordance with GAAP to (b) the aggregate amount of Consolidated EBITDA
of such person attributable to continuing operations and business (exclusive of
amounts attributable to operations and businesses permanently discontinued or
disposed of) for the Reference Period; PROVIDED, that for purposes of such
calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Leverage Ratio shall be
assumed to have occurred on the first day of the Reference Period, (iii) the
incurrence of any Indebtedness or issuance of any Disqualified Capital Stock
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date (and the application of the proceeds therefrom to
the extent used to refinance or retire other Indebtedness) shall be assumed to
have occurred on the first day of such Reference Period, and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a PRO FORMA basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
person or any of its Subsidiaries is a party to an Interest Swap or Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used.
"LIEN" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"LYONS(TM)" means the 5.50% Liquid Yield Option Notes(TM) due June
12, 2011 issued by the Initial Guarantor pursuant to an indenture dated as of
June 12, 1996 between the Initial Guarantor and The Bank of New York, a New York
banking corporation, as trustee.
"MATURITY DATE" means, when used with respect to the Securities,
the date specified on such Security as the
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<PAGE>
fixed date on which the final installment of principal of such Security is due
and payable (in the absence of any acceleration thereof pursuant to the
provisions of the Indenture regarding acceleration of Indebtedness or any Change
of Control Offer or Asset Sale Offer).
"MERGER" means the merger to be consummated pursuant to that
certain Agreement and Plan of Merger by and among the Initial Guarantor, the
Company and Citicasters dated as of February 12, 1996 (the "Merger Agreement").
"NET CASH PROCEEDS" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale or an
Event of Loss plus, in the case of an issuance of Qualified Capital Stock of the
Company upon any exercise, exchange or conversion of securities (including
options, warrants, rights and convertible or exchangeable debt) of the Company
that were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and (in the case of
Asset Sales, reasonable and customary), expenses (including, without limitation,
the fees and expenses of legal counsel and investment banking fees and expenses)
incurred in connection with such Asset Sale, Event of Loss or sale of Qualified
Capital Stock, and, in the case of an Asset Sale only, less an amount (estimated
reasonably and in good faith by the Company or the amount actually incurred, if
greater) of income, franchise, sales and other applicable taxes required to be
paid by the Company or any of its Subsidiaries in connection with such Asset
Sale.
"NEW CREDIT FACILITY" means the Credit Agreement dated as of June
12, 1996 by and among Chemical Bank, as Administrative Agent, Banque Paribas, as
Documentation Agent, and Bank of America, Illinois, as Syndication Agent,
certain financial institutions from time to time party thereto, including any
related notes, guarantees, collateral documents, instruments, letters of credit,
reimbursement obligations and other agreements executed by or binding on the
Company, any of its Subsidiaries and/or the Initial Guarantor (or any successors
or assigns) in connection therewith (collectively, the "Related Documents"), as
such Credit Agreement and/or Related Documents may be amended,
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<PAGE>
restated, supplemented, renewed, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative lenders or
holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "New Credit Facility" shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders (or affiliates thereof) party to the New Credit Facility and shall also
include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification in whole or in part to any New Credit
Facility and all refundings, refinancings and replacements in whole or in part
of any New Credit Facility, including, without limitation, any agreement or
agreements (i) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, (iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder, provided that on the date such Indebtedness
is incurred it would be permitted by paragraph (f) under the definition of
Permitted Indebtedness, or (iv) otherwise altering the terms and conditions
thereof.
"NOBLE ACQUISITION" means the acquisition of Noble by the Initial
Guarantor pursuant to that certain Stock Purchase and Stock Warrant Redemption
Agreement dated as of February 20, 1996 by and among the Initial Guarantor,
Prudential Venture Partners II, L.P., Northeast Ventures, II, John T. Lynch,
Frank A. DeFrancesco, Thomas R. Jiminez, William R. Arbenz, CIHC Incorporated,
Bankers Life Holding Corporation and Noble Broadcast Group, Inc.
"NON-GUARANTOR SUBSIDIARY" means any Subsidiary that is not a
Guarantor.
"NOTICE OF DEFAULT" shall have the meaning specified in Section
6.1(3).
"OBLIGATION" means any principal, premium or interest payment, or
monetary penalty, or damages, due by the Company or any Guarantor under the
terms of the Securities or the Indenture.
"OFFICER" means, with respect to the Company or the Guarantors,
the Chief Executive Officer, the President, any Senior Vice President, the Chief
Financial Officer, the
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Treasurer, the Controller, or the Secretary of the Company or Guarantor (as
applicable).
"OFFICERS' CERTIFICATE" means, with respect to the Company or the
Guarantors, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or the Guarantors (as applicable) and
otherwise complying with the requirements of Sections 13.4 and 13.5, and
delivered to the Trustee or an Agent, as applicable.
"OPINION OF COUNSEL" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee (which may include counsel to the
Trustee or the Company including an employee of the Company) or an Agent, as
applicable, complying with the requirements of Sections 13.4 and 13.5, and
delivered to the Trustee or an Agent, as applicable.
"OUTSTANDING" as used with reference to the Securities shall have
the meaning specified in Section 2.8 hereof.
"PARENT" or "PARENT" of any person means a corporation which at
the date of determination owns, directly or indirectly, a majority of the Voting
Stock of such person or of a Parent of such person.
"PAYING AGENT" has the meaning specified in Section 2.3.
"PAYMENT DEFAULT" has the meaning specified in Section 10.2.
"PAYMENT NOTICE" shall have the meaning set out in Section 10.2.
"PERMITTED INDEBTEDNESS" means any of the following:
(a) the Company and its Subsidiaries may incur Indebtedness
solely in respect of bankers acceptances, letters of credit and performance
bonds (to the extent that such incurrence does not result in the incurrence of
any obligation to repay any obligation relating to borrowed money of others),
all in the ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Company's industry;
pro-
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vided, that the aggregate principal amount outstanding of such Indebtedness
(including any Indebtedness issued to refinance, refund or replace such
Indebtedness) shall at no time exceed $5.0 million;
(b) the Company may incur Indebtedness to any Wholly owned
Subsidiary Guarantor, and any Wholly owned Subsidiary Guarantor may incur
Indebtedness to any other Wholly owned Subsidiary Guarantor or to the Company;
provided, that in the case of Indebtedness of the Company, such obligations
shall be unsecured and subordinated in all respects to the Company's obligations
pursuant to the Securities and the date of any event that causes such subsidiary
Guarantor to no longer be a Wholly owned Subsidiary shall be an Incurrence Date;
(c) the Company and the Guarantors may incur Indebtedness
evidenced by the Securities and the Guarantees and represented by the Indenture
up to the amounts specified therein as of the date hereof;
(d) the Company and the Guarantors, as applicable, may incur
Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, which Indebtedness was incurred pursuant to the
Leverage Ratio in Section 4.11 hereof or clause (c) of this definition;
(e) the Company and its Subsidiaries may incur Indebtedness
in an aggregate amount outstanding at any time (including any Indebtedness
issued to refinance, replace, or refund such Indebtedness) of up to $5.0
million;
(f) the Company and the Guarantors may incur Indebtedness
incurred pursuant to the New Credit Facility up to an aggregate principal amount
outstanding (including any Indebtedness issued to refinance, refund or replace
such Indebtedness in whole or in part) at any time of $600.0 million, plus
accrued interest and additional expense and reimbursement obligations with
respect thereto and such additional amounts as may be deemed to be outstanding
in the form of Interest Swap and Hedging Obligations with lenders (or affiliates
thereof) party to the New Credit Facility, minus the amount of any such
Indebtedness retired with Net Cash Proceeds from any Asset Sale;
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(g) the Company and the Guarantors may incur Indebtedness
under Interest Swap and Hedging Obligations that do not increase the
Indebtedness of the Company other than as a result of fluctuations in interest
or foreign currency exchange rates provided that such Interest Swap and Hedging
Obligations are incurred for the purpose of providing interest rate protection
with respect to Indebtedness permitted under the Indenture or to provide
currency exchange protection in connection with revenues generated in currencies
other than U.S. dollars;
(h) Subsidiaries may incur Acquired Indebtedness if the
Company at the time of such incurrence could incur such Indebtedness pursuant to
the Leverage Ratio in Section 4.11;
(i) the Company may incur Indebtedness of Citicasters in
connection with the consummation of the Merger provided such Indebtedness was in
existence on the date of the Merger Agreement or was subsequently incurred
pursuant to such Merger Agreement, in any case not to exceed $165.0 million; and
(j) the Company and its Subsidiaries may incur Indebtedness
existing on the Issue Date.
"PERMITTED INVESTMENT" means:
(a) Investments in any of the Securities;
(b) Cash Equivalents;
(c) intercompany loans to the extent permitted under clause
(b) of the definition of "Permitted Indebtedness" and intercompany security
agreements relating thereto;
(d) loans, advances or investments in existence on the Issue
Date;
(e) Investments in a person substantially all of whose assets
are of a type generally used in a Related Business (an "Acquired Person") if, as
a result of such Investments, (i) the Acquired Person immediately thereupon is
or becomes a Subsidiary of the Company, or (ii) the Acquired Person immediately
thereupon either (1) is merged or consolidated with or into the Company or any
of its
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Subsidiaries and the surviving person is the Company or a Subsidiary of the
Company or (2) transfers or conveys all or substantially all of its assets, or
is liquidated into, the Company or any of its Subsidiaries;
(f) Investments in a person with whom the Company or any of
its Subsidiaries have entered into, (i) local market agreements or time
brokerage agreements pursuant to which the Company or any one of its
Subsidiaries programs substantial portions of the broadcast day on such person's
radio broadcast station(s) and sells advertising time during such program
segments for its own account or (ii) joint sales agreements pursuant to which
the Company or any of its Subsidiaries sells substantially all of the
advertising time for such person's radio broadcast station(s);
(g) Investments that arise out of the consummation of the
Merger and the Noble Acquisition;
(h) Investments that are in persons which will have the
purpose of furthering the operations of the Company and its Subsidiaries not to
exceed $10.0 million; and
(i) demand deposit accounts maintained in the ordinary course
of business.
"PERMITTED LIEN" means:
(a) Liens existing on the Issue Date;
(b) Liens imposed by governmental authorities for taxes,
assessments or other charges or levies not yet subject to penalty or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the Company in
accordance with GAAP as of the date of determination;
(c) statutory liens of carriers, warehousemen, mechanics,
materialmen, landlords, repairmen or other like Liens arising by operation of
law in the ordinary course of business provided that (i) the underlying
obligations are not overdue for a period of more than 60 days, or (ii) such
Liens are being contested in good faith and by appropriate proceedings and
adequate reserves with respect
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thereto are maintained on the books of the Company in accordance with GAAP as of
the date of determination;
(d) Liens securing the performance of bids, trade contracts
(other than borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business and deposits made in the ordinary course of business
to secure obligations of public utilities;
(e) easements, rights-of-way, zoning, building restrictions,
reservations, encroachments, exceptions, covenants, similar restrictions and
other similar encumbrances or title defects which, singly or in the aggregate,
do not in any case materially detract from the value of the property, subject
thereto (as such property is used by the Company or any of its Subsidiaries) or
interfere with the ordinary conduct of the business of the Company or any of its
Subsidiaries;
(f) Liens arising by operation of law in connection with
judgments, provided, that the execution or other enforcement of such Liens is
effectively stayed and that the claims secured thereby are being contested in
good faith by appropriate proceedings;
(g) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security legislation;
(h) Liens securing Indebtedness of a person existing at the
time such person becomes a Subsidiary or is merged with or into the Company or a
Subsidiary or Liens securing Indebtedness incurred in connection with an
Acquisition, provided that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets;
(i) leases or subleases granted to other persons in the
ordinary course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting from
the value of the relative assets of the Company or any of its Subsidiaries;
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(j) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of business;
(k) Liens securing Refinancing Indebtedness incurred to
refinance any Indebtedness that was previously so secured in a manner no more
adverse to the Holders of the Securities than the terms of the Liens securing
such refinanced Indebtedness provided that the Indebtedness secured is not
increased and the lien is not extended to any additional assets or property;
(l) Liens in favor of the Administrative Agent pursuant to
the New Credit Facility; and
(m) Liens on property of a Subsidiary of the Company provided
that such Liens secure only obligations owing by such Subsidiary to the Company
or another Subsidiary of the Company.
"PERSON" or "PERSON" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"PLAN OF LIQUIDATION" means a plan that provides for, contemplates
or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than as an entirety or substantially as an entirety and (ii) the distribution
of all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of the
Company to holders of Capital Stock of the Company.
"PREFERRED STOCK" as applied to the Capital Stock of any
corporation, means Capital Stock ranking prior to the shares of any other class
of Capital Stock of said corporation as to the payment of dividends or the
distribution of assets on any voluntary or involuntary liquidation.
"PRO RATA PORTION" shall have the meaning specified in Section
12.1.
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"PRODUCTIVE ASSETS" means assets of a kind used or usable by the
Company and its Subsidiaries in a Related Business.
"PROPERTY" means any right or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"PUBLIC OFFERING" means a firm commitment underwritten primary
offering of Capital Stock of the Initial Guarantor or the Company.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company
that is not Disqualified Capital Stock.
"QUALIFIED EXCHANGE" means any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or Indebtedness of
the Company issued on or after the Issue Date with the Net Cash Proceeds
received by the Company from the substantially concurrent sale of Qualified
Capital Stock or any exchange of Qualified Capital Stock for any Capital Stock
or Indebtedness issued on or after the Issue Date.
"RECORD DATE" means a Record Date specified in the Securities
whether or not such Record Date is a Business Day.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security, which shall include, without duplication, in each case,
accrued and unpaid interest to the Redemption Date (subject to the provisions of
Section 3.5).
"REFERENCE PERIOD" with regard to any Person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Securities or the Indenture.
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"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified
Capital Stock (a) issued in exchange for, or the proceeds from the issuance and
sale of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in part,
or (b) constituting an amendment, modification or supplement to, or a deferral
or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so Refinanced and (ii) if such Indebtedness being
Refinanced was issued with an original issue discount, the accredited value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, that (A) such Refinancing Indebtedness of any Subsidiary of the
Company shall only be used to Refinance outstanding Indebtedness or Disqualified
Capital Stock of such Subsidiary, (B) such Refinancing Indebtedness shall (x)
not have an Average Life shorter than the Indebtedness or Disqualified Capital
Stock to be so refinanced at the time of such Refinancing and (y) in all
respects, be no less subordinated or junior, if applicable, to the rights of
Holders of the Securities than was the Indebtedness or Disqualified Capital
Stock to be refinanced and (C) such Refinancing Indebtedness shall have no
installment of principal (or redemption payment) scheduled to come due earlier
than the scheduled maturity of any installment of principal of the Indebtedness
or Disqualified Capital Stock to be so refinanced which was scheduled to come
due prior to the Stated Maturity.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"RELATED BUSINESS" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are materially related businesses.
"RELATED PERSON" means any person who controls, is controlled by
or is under common control with an Excluded Person; PROVIDED that for purposes
of this definition "con-
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trol" means the beneficial ownership of more than 50% of the total voting power
of a person normally entitled to vote in the election of directors, managers or
trustees, as applicable of a person.
"REPRESENTATIVE" means Chemical Bank in its capacity as
Administrative Agent for lenders pursuant to the New Credit Facility, and not in
its individual capacity as a lender, and any successor Administrative Agent
appointed pursuant to the New Credit Facility.
"REQUIRED LENDERS" means lenders under the New Credit Facility
whose PRO RATA shares (as defined therein), pursuant to the New Credit
Facility, are in the aggregate at least 66 2/3%.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions any Investment other than investments in Permitted Investments;
provided, however, that a merger of another person with or into the Company or a
Subsidiary Guarantor shall not be deemed to be a Restricted Investment so long
as the surviving entity is the Company or a direct Wholly owned Subsidiary
Guarantor.
"RESTRICTED PAYMENT" means with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such person or any parent or Subsidiary of such person, (b)
any payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such person or any Subsidiary or
parent of such person, (c) other than with the proceeds from the substantially
concurrent sale of, or in exchange for, Refinancing Indebtedness any purchase,
redemption, or other acquisition or retirement for value of, any payment in
respect of any amendment of the terms of or any defeasance of, any Subordinated
Indebtedness, directly or indirectly, by such person or a parent or Subsidiary
of such person prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness and (d) any Restricted Investment by such person; provided,
however, that the term "Restricted Payment" does not include (i) any dividend,
distribution or other payment on or with respect to Capital Stock of an issuer
to the extent payable solely in shares of Qualified Capital Stock of such
issuer; (ii) any dividend, distribution or other payment to the Company, or to
any Wholly owned
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Subsidiary Guarantor, by any of the Subsidiaries of the Company; or (iii) loans
or advances to any Guarantor the proceeds of which are used by such subsidiary
Guarantor in a Related Business activity of such subsidiary Guarantor.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the 10 1/8% Senior Subordinated Notes due 2006
issued under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"SECURITIES CUSTODIAN" means the Registrar, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means any person in whose name a
Security is registered on the Registrar's books.
"SENIOR DEBT" of the Company or any Guarantor means Indebtedness
(including any monetary obligation in respect of the New Credit Facility and the
Existing Credit Facility, and interest, whether or not such interest is allowed
or allowable, accruing on Indebtedness incurred pursuant to the New Credit
Facility and the Existing Credit Facility at the contracted-for rate whether
accruing on, before or after the commencement of any proceeding under any
bankruptcy, insolvency or similar law) of the Company or such Guarantor arising
under the New Credit Facility and the Existing Credit Facility or that, by the
terms of the instrument creating or evidencing such Indebtedness, is expressly
designated Senior Debt and made senior in right of payment to the Securities or
the applicable Guaranty; provided, that in no event shall Senior Debt include
(a) Indebtedness to any Subsidiary of the Company or any officer, director or
employee of the Company or any Subsidiary of the Company, (b) Indebtedness
incurred in violation of the terms of the Indenture, (c) Indebtedness to trade
creditors, (d) Disqualified Capital Stock and (e) any liability for taxes owed
or owing by the Company or such Guarantor.
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"SIGNIFICANT SUBSIDIARY" shall have the meaning provided under
Regulation S-X of the Securities Act, in effect on the Issue Date.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest means
a date fixed by the Paying Agent pursuant to Section 2.12.
"STATED MATURITY," when used with respect to any Security, means
June 15, 2006.
"STOCK OFFERING" means the offering and sale by the Initial
Guarantor of up to 12,937,500 shares of its common stock, no par value per
share, which was consummated on June 12, 1996 pursuant to an underwriting
agreement dated as of June 6, 1996 among the Initial Guarantor and Donaldson,
Lufkin & Jenrette Securities Corporation, Alex. Brown & Sons Incorporated, CS
First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Smith Barney Inc.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Securities or such
Guaranty, as applicable, in any respect or has a stated maturity on or after the
Stated Maturity.
"SUBSIDIARY" with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person,
by such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person, (ii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest, or (iii) a
partnership in which such person or a Subsidiary of such person is, at the time,
a general partner and in which such person, directly or indirectly, at the date
of determination thereof has at least a majority ownership interest.
"Tax Sharing Agreement" means any agreements between the Company and
the Initial Guarantor pursuant to which the Company may make payments to the
Initial Guarantor with respect to the Company's Federal, state, or local
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income or franchise tax liabilities where the Company is included in a
consolidated, unitary or combined return filed by the Initial Guarantor;
PROVIDED, HOWEVER, that the payment by the Company under such agreement may
not exceed the liability of the Company for such taxes if it had filed its
income tax returns as a separate company.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S.
Code Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture.
"TRANSFER INSTRUMENTS" shall have the meaning specified in
Section 12.2.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TRUST OFFICER" means any officer within the corporate trust
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable
obligations of, or noncallable obligations guaranteed by, the United States of
America for the payment of which obligation or guarantee the full faith and
credit of the United States of America is pledged.
"VOTING STOCK" means, with respect to any specified person,
capital stock with voting power, under ordinary circumstances, to elect
directors of such Person.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary all the Equity
Interests of which are owned by the Company or one or more Wholly owned
Subsidiaries of the Company.
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and
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made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee.
"OBLIGOR" on the indenture securities means the Company, each
Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
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(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Company
shall approve the form of the Securities and any notation, legend or endorsement
on them. Any such notations, legends or endorsements not contained in the form
of Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile signature.
The Company's seal, if any, shall be impressed, affixed, imprinted or reproduced
on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of
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authentication on the Security but such signature shall be conclusive evidence
that the Security has been authenticated pursuant to the terms of this
Indenture.
The Trustee shall authenticate or cause to be authenticated
Securities for original issue in the aggregate principal amount of up to
$100,000,000 upon a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of Securities
to be authenticated and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $100,000,000, except as provided in Section 2.7. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution of Securities originally
issued to reflect any name changes of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of its Subsidiaries.
Securities shall be issuable only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or exchange ("Registrar") and an office or agency of
the Company where Securities may be presented for payment ("Paying Agent") and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except that,
for the purposes of Articles III, VIII, XI, and Section 4.14 and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or
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more co-Registrars and one or more additional Paying Agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional Paying Agent. The Company hereby initially appoints the Trustee as
Registrar and Paying Agent, and by its acknowledgement and acceptance on the
signature page hereto, the Trustee hereby agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Registrar to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
6.1(4) or (6), the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Company, the Registrar and the Paying Agent, the
Trustee may, assume the duties and obligations of the Registrar and the Paying
Agent hereunder.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, or interest on, the Securities (whether such
assets have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee in writing of any Default in making
any such payment. If a Subsidiary of the Company acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund for the benefit of
the Holders or the
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Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default or any
Event of Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company) shall have no further liability for such assets.
SECTION 2.5. SECURITYHOLDER LISTS.
The Registrar shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee or
Paying Agent is not the Registrar, the Company shall furnish to the Trustee on
or before the third Business Day preceding each Interest Payment Date and at
such other times as the Trustee or any such Paying Agent may request in writing
a list in such form and as of such date as the Trustee or any such Paying Agent
reasonably may require of the names and addresses of Holders and the Company
shall otherwise comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such
Definitive Securities; or
(y) to exchange such Definitive Securities
for an equal principal amount of Definitive Securities of other authorized
denominations; the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company
and the Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing.
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(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar, together with
written instructions of the Holder directing the Registrar to make, or to direct
the Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security, then the Registrar shall cancel such
Definitive Security and cause, or direct the Securities Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Securities Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If
no Global Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate a new Global Security in the appropriate principal
amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depositary, in accordance with this Indenture and the
procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY
FOR A DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Registrar of written
instructions or such other form of instructions as is customary for the
Depositary from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Security, and, if such beneficial
interest is being transferred to the Person designated by the Depositary
as being the beneficial owner, a certification from such person to that
effect (in substantially the form set forth on the reverse of the
Security)(all of which may be submitted by facsimile), then the Registrar
or the Securities Custodian, at the direction of the Trustee, will cause,
in accordance with the standing instructions and procedures existing
between
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the Depositary and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced and, following such reduction,
the Company will execute and, upon receipt of an authentication order in
the form of an Officers' Certificate, the Trustee or the Trustee's
authenticating agent will authenticate and deliver to the transferee a
Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The Registrar
shall deliver such Definitive Securities to the persons in whose names
such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF
Depositary. If at any time:
(i) the Depositary for the Securities notifies the
Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor Depositary for the
Global Securities is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the
Trustee and the Registrar in writing that it elects to cause the issuance
of Definitive Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will, or its authenticating agent will, authenticate and deliver Definitive
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Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At
such time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or cancelled, such
Global Security shall be returned to or retained and cancelled by the Registrar.
At any time prior to such cancellation, if any beneficial interest in a Global
Security is exchanged for Definitive Securities, redeemed, repurchased or
cancelled, the principal amount of Securities represented by such Global
Security shall be reduced and an endorsement shall be made on such Global
Security, by the Registrar or the Securities Custodian, at the direction of the
Registrar, to reflect such reduction.
(h) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee or any authenticating agent of
the Trustee shall authenticate Definitive Securities and Global Securities
at the Registrar's request.
(ii) No service charge shall be made to a Holder for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes, assessments, or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.7,
4.14(8), 9.5, or 11.1 (final paragraph)).
(iii) The Registrar shall not be required to register
the transfer of or exchange (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase pursuant to Article XI or
Section 4.14 hereof or redemption of Securities pursuant to
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Article III hereof and ending at the close of business on the day of such
mailing.
SECTION 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Registrar or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Registrar, to the Registrar to the effect that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee or any authenticating agent of the Trustee shall authenticate a
replacement Security if the Registrar's requirements are met. If required by
the Trustee, the Registrar or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Registrar, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by the Registrar, those delivered to
the Registrar for cancellation, those reductions in the interest in a Global
Security effected by the Registrar hereunder and those described in this Section
2.8 as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security, except as provided in
Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Registrar receives proof satisfactory to it that the replaced
Security is held by a BONA FIDE purchaser. A mutilated Security ceases to
be outstanding upon surrender of such Security and replacement thereof pursuant
to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the
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Company) holds Cash or U.S. Government Obligations sufficient to pay all of the
principal and interest and premium, if any, due on the Securities payable on
that date and payment of the Securities called for redemption is not otherwise
prohibited, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee knows are
so owned shall be disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until Definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
permanent Securities authenticated and delivered hereunder.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Registrar for
cancellation. The Trustee and the Paying Agent shall forward to the Registrar
any Securities surrendered to them for registration of transfer, exchange or
payment. The Registrar, or at the direction of the Registrar, the Trustee or
the Paying Agent (other than the Company or an Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the Company, shall
dispose of all Securities surrendered for registration of transfer, exchange,
payment or cancellation. Subject to Section 2.7,
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the Company may not issue new Securities to replace Securities that have been
paid or delivered to the Registrar for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section 2.11, except as expressly permitted in the form of Securities
and as permitted by this Indenture.
SECTION 2.12. DEFAULTED INTEREST.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest at the rate and in the
manner provided in Section 4.1 hereof and the Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee and the Paying Agent in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Paying Agent an amount of Cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Paying Agent for such
deposit prior to the date of the proposed payment, such Cash when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as provided in this clause (1). Thereupon the
Paying Agent shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Paying Agent of the notice of the proposed
payment. The Paying Agent shall promptly notify the Company and the
Trustee of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the
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Special Record Date therefor to be mailed, first-class postage prepaid, to
each Holder at his address as it appears in the Security register not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the persons in whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and shall no longer
be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee and the Paying Agent of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the
Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
ARTICLE III
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by the provisions of this
Indenture, shall be made in accordance with such provisions and this Article
III. The Company will not have the right to redeem any Securities prior to
June 15, 2001. On or after June 15, 2001, the Company will have the right to
redeem all or any part of the Securities pursuant to Paragraph 5 thereof, in
each case (subject to the right of Holders of record on a Record Date to receive
interest due on an Interest Payment Date that is on or prior to such Redemption
Date, and subject to the provisions set
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forth in Section 3.5), including accrued and unpaid interest to the Redemption
Date.
Notwithstanding the foregoing, in the event that the Merger has not
become effective prior to March 15, 1997, the Company may redeem the Securities
at a redemption price equal to 102% of the principal amount thereof, in each
case plus accrued and unpaid interest, if any, to the Redemption Date;
PROVIDED that such redemption, if made, must occur within 35 days of March 15,
1997.
SECTION 3.2. NOTICES TO TRUSTEE AND PAYING AGENT.
If the Company elects to redeem Securities pursuant to Paragraph 5
of the Securities, it shall notify the Trustee and the Paying Agent in writing
of the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Paying Agent to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities
to be redeemed pursuant to Paragraph 5 of the Securities by crediting against
any such redemption Securities it has not previously delivered to the Trustee
and the Paying Agent for cancellation, it shall so notify the Trustee and the
Paying Agent of the amount of the reduction and deliver such Securities with
such notice.
The Company shall give each notice to the Trustee and the Paying
Agent provided for in this Section 3.2 at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee and the
Paying Agent). Any such notice may be cancelled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on
a PRO RATA basis or by lot or by such other method as the Trustee shall
determine to be appropriate and fair.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemp-
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tion and shall promptly notify the Company and the Paying Agent in writing of
the Securities selected for redemption and, in the case of any Security
selected for partial redemption, the principal amount thereof to be redeemed.
Securities in denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations
larger than $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.4. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder whose Securities are
to be redeemed. At the Company's request, the Paying Agent shall give the
notice of redemption in the Company's name and at the Company's expense. Each
notice for redemption shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of
accrued and unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the
Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless the Company defaults in its obligation
to deposit with the Paying Agent Cash, or U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, Cash in an amount to fund the
Redemption Price, in accordance with Section 3.6 hereof or such redemption
payment is otherwise prohibited, interest on
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Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, including
accrued and unpaid interest to the Redemption Date, upon surrender to the
Paying Agent of the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the
portion of the principal amount, equal to $1,000 or any integral multiple
thereof, of such Security to be redeemed and that, after the Redemption
Date, and upon surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion thereof will be
issued;
(7) if less than all the Securities are to be redeemed,
the identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed;
and
(9) that the notice is being sent pursuant to this
Section 3.4 and pursuant to the optional redemption provisions of
Paragraph 5 of the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest to the
Redemption Date. Upon surrender to the Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price, including interest, if any,
accrued and unpaid to the Redemption Date; PROVIDED that if the Redemption
Date is after a regular Record Date and on or prior to the Interest Payment Date
to which such Record Date relates, the accrued interest shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date; and
PROVIDED, FURTHER, that if a Redemption Date is a non-Business Day, payment
shall be made on the next succeeding
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Business Day and no interest shall accrue for the period from such Redemption
Date to such succeeding Business Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.
On or prior to the Redemption Date, the Company shall deposit with
the Paying Agent (other than the Company or an Affiliate of the Company) Cash or
U.S. Government Obligations sufficient to pay the Redemption Price of, including
accrued and unpaid interest on, all Securities to be redeemed on such Redemption
Date (other than Securities or portions thereof called for redemption on that
date that have been delivered by the Company to the Registrar for cancellation).
The Paying Agent shall promptly return to the Company any Cash or U.S.
Government Obligations so deposited which is not required for that purpose upon
the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not otherwise prohibited, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph, interest
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Security.
SECTION 3.7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest and premium, if
applicable, on the Securities on the dates and in the manner provided herein and
in the Securities. An installment of principal of or interest and premium, if
applicable, on the Securities shall be considered paid on the date it is due if
the Trustee or Paying Agent (other than the Company, a Subsidiary of the Company
or an Affiliate of the Company) holds for the benefit of the Holders, on or
before 10:00 a.m. New York City time on that date, Cash deposited and designated
for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee and the Paying Agent of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee and the Paying Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain
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an office or agency in the Borough of Manhattan, The City of New York, for such
purposes. The Company shall give prompt written notice to the Trustee and the
Paying Agent of any such designation or rescission and of any change in the
location of any such other office or agency. The Company hereby initially
designates the corporate trust office of the Paying Agent as such office.
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.
On and after the Issue Date the Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make any Restricted
Payment, if, after giving effect to such Restricted Payment on a PRO FORMA
basis, (1) a Default or an Event of Default shall have occurred and be
continuing, (2) the Company is not permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Leverage Ratio in Section 4.11, or (3)
the aggregate amount of all Restricted Payments made by the Company and its
Subsidiaries, including after giving effect to such proposed Restricted Payment,
from and after the Issue Date, would exceed the sum of (a)(x) 100% of the
aggregate Consolidated EBITDA of the Company and its Consolidated Subsidiaries
for the period (taken as one accounting period), commencing on the first day of
the first full fiscal quarter commencing after the Issue Date, to and including
the last day of the fiscal quarter ended immediately prior to the date of each
such calculation (or, in the event Consolidated EBITDA for such period is a
deficit, then minus 100% of such deficit) less (y) 1.4 times Consolidated Fixed
Charges for the same period plus (b) the aggregate Net Cash Proceeds received by
the Company from the sale of its Qualified Capital Stock (other than (i) to a
Subsidiary of the Company and (ii) to the extent applied in connection with a
Qualified Exchange), after the Issue Date; provided, however, Net Cash Proceeds
shall not include (A) the proceeds of the Stock Offering, (B) the offering of
the LYONs, and (C) the proceeds received in connection with the contribution
from the Initial Guarantor required by Section 4.19 hereof and the New Credit
Facility, other than, with respect to clause (C) hereof, any Net Cash Proceeds
received by the Company from the sale of its Qualified Capital Stock (other than
(i) to a Subsidiary of the Company and (ii) to the extent applied in connection
with a Qualified Exchange), after the Issue Date.
The foregoing clauses (2) and (3) of the immediately preceding
paragraph, however, will not prohibit (w)
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payments to the Initial Guarantor to reimburse the Initial Guarantor for
reasonable and necessary corporate and administrative expenses, (x) Restricted
Investments, PROVIDED, that, after giving PRO FORMA effect to such
Restricted Investment, the aggregate amount of all such Restricted Investments
made on or after the Issue Date that are outstanding (after giving effect to any
such Restricted Investments that are returned to the Company or the Subsidiary
Guarantor that made such prior Restricted Investment, without restriction, in
cash on or prior to the date of any such calculation) at any time does not
exceed $5.0 million, (y) a Qualified Exchange and (z) the payment of any
dividend on Qualified Capital Stock within 60 days after the date of its
declaration if such dividend could have been made on the date of such
declaration in compliance with the foregoing provisions. The full amount of any
Restricted Payment made pursuant to the foregoing clauses (x) and (z) of the
immediately preceding sentence, however, will be deducted in the calculation of
the aggregate amount of Restricted Payments available to be made pursuant to
clause (3) of the immediately preceding paragraph.
SECTION 4.4. CORPORATE EXISTENCE.
Subject to Article V, the Company and the Guarantors shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their respective corporate existence in accordance with the respective
organizational documents of each of them (as the same may be amended from time
to time) and the rights (charter and statutory) and corporate franchises of the
Company and the Guarantors; PROVIDED, HOWEVER, nothing in this Section will
prohibit the Company or any Guarantor from engaging in any transaction permitted
under Section 12.4 or Section 12.5 hereof and PROVIDED FURTHER that neither
the Company nor any Guarantor shall be required to preserve any right or
franchise if (a) the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
such entity and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.
Except with respect to immaterial items, the Company and the
Guarantors shall, and shall cause each of their Subsidiaries to, pay or
discharge or cause to be paid
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or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
and the Guarantors or any of their Subsidiaries or any of their respective
properties and assets; and (ii) all lawful claims, whether for labor,
materials, supplies, services or anything else, which have become due and
payable and which by law have or may become a Lien upon the property and assets
of the Company and the Guarantors or any of their Subsidiaries; PROVIDED,
HOWEVER, that neither the Company nor any of the Guarantors shall be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been established in accordance with GAAP.
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company and the Guarantors shall cause all material properties
used or useful to the conduct of their business and the business of each of
their Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section 4.6 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a), in the
judgment of the Board of Directors of the Company, desirable in the conduct of
the business of such entity and (b) not disadvantageous in any material respect
to the Holders.
The Company and the Guarantors shall provide, or cause to be
provided, for themselves and each of their Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Company is adequate and appropriate for
the conduct of the business of the Company, the Guarantors and such
Subsidiaries.
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SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120 days
after the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries, if any, during the preceding fiscal year has
been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, whether or not the signer knows of any failure by the
Company or any Guarantor to comply with any conditions or covenants in this
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers'
Certificate shall also notify the Trustee should the relevant fiscal year end on
any date other than the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default or any Event of Default unless one of its Trust Officers receives
written notice thereof from the Company or any of the Holders.
SECTION 4.8. REPORTS.
For so long as the Initial Guarantor or any successor thereto is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act
and the Company is a wholly owned Subsidiary of the Initial Guarantor, the
Company shall deliver to the Trustee, and to each Holder, the Initial
Guarantor's annual and quarterly reports pursuant to Section 13 or 15(d) of the
Exchange Act, within 15 days after such reports have been filed with the
Commission; PROVIDED, HOWEVER; in the event either (i) the Initial Guarantor
or a successor as set forth above is no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or (ii) the Company is
no longer a wholly owned Subsidiary of the Initial Guarantor or a successor as
set forth above, then whether or not the Company
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is subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall deliver to the Trustee and, to each Holder, within 15
days after it is or would have been (if it were subject to such reporting
obligations) required to file such with the Commission, annual and quarterly
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the Commission, if the Company were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent accountants as such would be required in such
reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, to the extent permitted by the Exchange Act or the
Commission (if it were subject to such reporting obligations), file with the
Commission the annual, quarterly and other reports which it is or would have
been required to file with the Commission.
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY.
Neither the Company nor any Subsidiary shall become an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment Company
Act.
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
After the Issue Date, the Company shall not, and shall not permit
any of its Subsidiaries to, enter into any contract, agreement, arrangement or
transaction with any Affiliate (an "Affiliate Transaction") or any series of
related Affiliate Transactions (other than Exempted Affiliate Transactions) (i)
unless it is determined that the terms of such Affiliate Transaction are fair
and reasonable to the Company, and no less favorable to the Company than could
have been obtained in an arm's length transaction with a non-Affiliate and, (ii)
if involving consideration to either party in excess of $5.0 million, unless
such Affiliate Transaction(s) is evidenced by (A) an Officers' Certificate
addressed and delivered to the Trustee certifying that such Affiliate
Transaction (or Transactions) has been approved by a majority of the members of
the Board of Directors of the
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Company that are disinterested in such transaction or, (B) in the event there
are no members of the Board of Directors of the Company who are disinterested in
such transaction, then so long as the Company is a wholly owned Subsidiary of
the Initial Guarantor, an Officers' Certificate addressed and delivered to the
Trustee certifying that such Affiliate Transaction (or Transactions) have been
approved by a majority of the members of the Board of Directors of the Initial
Guarantor that are disinterested in such transaction and (iii) if involving
consideration to either party in excess of $10.0 million, unless in addition the
Company, prior to the consummation thereof, obtains a written favorable opinion
as to the fairness of such transaction to the Company from a financial point of
view from an independent investment banking firm of national reputation.
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS
AND DISQUALIFIED CAPITAL STOCK.
Except as set forth below, neither the Company nor any of the
Company's Subsidiaries shall, directly or indirectly, issue, assume, guaranty,
incur, become directly or indirectly liable with respect to (including as a
result of an Acquisition), or otherwise become responsible for, contingently or
otherwise (individually and collectively, to "incur" or, as appropriate, an
"incurrence"), any Indebtedness or any Disqualified Capital Stock (including
Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the
foregoing limitations, the Company may incur Indebtedness and Disqualified
Capital Stock in addition to Permitted Indebtedness: if (i) no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a PRO FORMA basis to, such incurrence of Indebtedness
or Disqualified Capital Stock and (ii) on the date of such incurrence (the
"Incurrence Date"), the Leverage Ratio of the Company for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a PRO FORMA
basis to such incurrence of such Indebtedness or Disqualified Capital Stock and,
to the extent set forth in the definition of Leverage Ratio, the use of proceeds
thereof, would be less than 7.0 to 1.
Indebtedness or Disqualified Capital Stock of any person which is
outstanding at the time such person becomes a Subsidiary of the Company
(including upon designation of any subsidiary or other person as a Subsidiary)
or is merged
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with or into or consolidated with the Company or a Subsidiary of the Company
shall be deemed to have been Incurred at the time such Person becomes such a
Subsidiary of the Company or is merged with or into or consolidated with the
Company or a Subsidiary of the Company, as applicable.
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.
Neither the Company nor any of its Subsidiaries shall permit any
of their Subsidiaries to, create, assume or suffer to exist any consensual
restriction on the ability of any Subsidiary of the Company to pay dividends or
make other distributions to or on behalf of, or to pay any obligation to or on
behalf of, or otherwise to transfer assets or property to or on behalf of, or
make or pay loans or advances to or on behalf of, the Company or any Subsidiary
of the Company, except (a) restrictions imposed by the Securities or the
Indenture, (b) restrictions imposed by applicable law, (c) existing restrictions
under Indebtedness outstanding on the Issue Date, (d) restrictions under any
Acquired Indebtedness not incurred in violation of the Indenture or any
agreement relating to any property, asset, or business acquired by the Company
or any of its Subsidiaries, which restrictions in each case existed at the time
of acquisition, were not put in place in connection with or in anticipation of
such acquisition and are not applicable to any person, other than the person
acquired, or to any property, asset or business, other than the property, assets
and business so acquired, (e) any such restriction or requirement imposed by
Indebtedness incurred under paragraph (f) under the definition of Permitted
Indebtedness, provided such restriction or requirement is no more restrictive
than that imposed by the New Credit Facility as of the Issue Date, (f)
restrictions with respect solely to a Subsidiary of the Company imposed pursuant
to a binding agreement which has been entered into for the sale or disposition
of all or substantially all of the Equity Interests or assets of such
Subsidiary, provided such restrictions apply solely to the Equity Interests or
assets of such Subsidiary which are being sold, and (g) in connection with and
pursuant to permitted Refinancings, replacements of restrictions imposed
pursuant to clauses (a), (c) or (d) of this paragraph that are not more
restrictive than those being replaced and do not apply to any other person or
assets than those that would have been covered by the restrictions in the
Indebtedness so refinanced. Notwithstanding the foregoing, neither
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(a) customary provisions restricting subletting or assignment of any lease
entered into in the ordinary course of business, consistent with industry
practice, or other standard non-assignment clauses in contracts entered into in
the ordinary course of business, (b) Capital Leases or agreements governing
purchase money Indebtedness which contain restrictions of the type referred to
above with respect to the property covered thereby, nor (c) Liens permitted
under the terms hereof on assets securing Senior Debt incurred pursuant to the
Leverage Ratio in Section 4.11 or permitted pursuant to the definition of
Permitted Indebtedness, shall in and of themselves be considered a restriction
on the ability of the applicable Subsidiary to transfer such agreement or
assets, as the case may be.
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS; LIENS.
The Company and its Subsidiaries shall not, and shall not permit any
of their Subsidiaries to, directly or indirectly, incur, or suffer to exist (a)
any Indebtedness that is subordinate in right of payment to any other
Indebtedness of the Company or a Guarantor unless, by its terms, such
Indebtedness (i) has a maturity date subsequent to the Stated Maturity of the
Securities and an Average Life longer than that of the Securities and (ii) is
subordinate in right of payment to, or ranks PARI PASSU with, the Securities
or the Guarantees, as applicable, or (b) other than Permitted Liens, any Lien
upon any of properties or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom securing Indebtedness other than (1)
Liens securing Senior Debt incurred pursuant to the Leverage Ratio in accordance
with Section 4.11 and (2) Liens securing Senior Debt incurred as permitted
pursuant to the definition of Permitted Indebtedness.
SECTION 4.14. LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK.
The Company and its Subsidiaries shall not, and shall not permit any
of their Subsidiaries to, in one or a series of related transactions, sell,
transfer, or otherwise dispose of, any of its property, business or assets,
including by merger or consolidation (in the case of a Guarantor or a Subsidiary
of the Company), and including any sale or other transfer or issuance of any
Equity Interests of any direct or indirect Subsidiary of the Company, whether by
the
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Company or a direct or indirect Subsidiary thereof (an "Asset Sale"), unless (1)
within 450 days after the date of such Asset Sale, the Net Cash Proceeds
therefrom (the "Asset Sale Offer Amount") are (a) applied to the optional
redemption of the Securities in accordance with the terms hereof and the
Securities or to the repurchase of the Securities pursuant to an irrevocable,
unconditional cash offer (the "Asset Sale Offer") to repurchase Securities at a
purchase price (the "Asset Sale Offer Price") of 100% of principal amount, plus
accrued interest to the date of payment, (b) invested in assets and property
(other than notes, bonds, obligations and securities) which in the good faith
reasonable judgment of the Board of the Company will immediately constitute or
be a part of a Related Business of the Company or a Subsidiary (if it continues
to be a Subsidiary) immediately following such transaction or (c) used to
permanently retire or reduce Senior Debt or Indebtedness permitted pursuant to
paragraphs (d), (e) or (f) under the definition of Permitted Indebtedness
(including that in the case of a revolver or similar arrangement that makes
credit available, such commitment is so permanently reduced by such amount), (2)
with respect to any Asset Sale or related series of Asset Sales involving
securities, property or assets with an aggregate fair market value in excess of
$2.5 million, at least 75% of the consideration for such Asset Sale or series of
related Asset Sales (excluding the amount of (A) any Indebtedness (other than
the Securities) that is required to be repaid or assumed (and is either repaid
or assumed by the transferee of the related assets) by virtue of such Asset Sale
and which is secured by a Lien on the property or asset sold and (B) property
received by the Company or any such Subsidiary from the transferee that within
90 days of such Asset Sale is converted into cash or Cash Equivalents) consists
of cash or Cash Equivalents (other than in the case of an Asset Swap or where
the Company is exchanging all or substantially all the assets of one or more
Related Businesses operated by the Company or its Subsidiaries (including by way
of the transfer of capital stock) for all or substantially all the assets
(including by way of the transfer of capital stock) constituting one or more
Related Businesses operated by another person, in which event the foregoing
requirement with respect to the receipt of cash or Cash Equivalents shall not
apply), (3) no Default or Event of Default shall have occurred and be continuing
at the time of, or would occur after giving effect, on a PRO FORMA basis, to,
such Asset Sale, and (4) the Board of the Company determines in good faith that
the Company or such Subsid-
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iary, as applicable, receives fair market value for such Asset Sale.
Notwithstanding the foregoing provisions of the first paragraph of
this covenant, subsequent to the consummation of the Merger, with respect to an
Asset Sale Offer, the Company shall not commence an Asset Sale Offer for the
Securities until such time as a Citicasters Securities Asset Sale Offer for the
Citicasters Securities, if required, has been completed. To the extent that any
Excess Proceeds remain after expiration of an Asset Sale Offer Period for the
Citicasters Securities, the Company shall use the remaining Net Cash Proceeds,
to the extent "Excess Proceeds" (as defined herein) exceeds $5,000,000, to
commence an Asset Sale Offer for the Securities; PROVIDED, that the amount of
Net Cash Proceeds used for such Asset Sale Offer for the Securities shall not
exceed the Citicasters Asset Sale Repurchase Amount; PROVIDED, HOWEVER, that
this paragraph shall be of no further force and effect upon the earlier of (x)
the maturity of such Citicasters Securities, (y) the date upon which defeasance
of the Citicasters Securities becomes effective, and (z) the date on which there
are no longer any Citicasters Securities outstanding under the terms of the
governing indenture.
In addition, notwithstanding the foregoing provisions of the first
paragraph of this covenant:
(i) the Company and its Subsidiaries may convey, sell,
lease, transfer, assign or otherwise dispose of assets pursuant to an in
accordance with the provisions of Section 5.1;
(ii) the Company and its Subsidiaries may sell or
dispose of inventory or damaged, worn out or other obsolete property in
the ordinary course of business so long as such property is no longer
necessary for the proper conduct of the business of the Company or such
Subsidiary, as applicable; and
(iii) any of the Company's Subsidiaries may convey,
sell, transfer, assign or otherwise dispose of assets to, or merge with or
into, the Company or any of its Wholly owned Subsidiary Guarantors.
The Company shall accumulate all Net Cash Proceeds (including any
cash as and when received from the proceeds
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of any property which itself was acquired in consideration of an Asset Sale),
and the aggregate amount of such accumulated Net Cash Proceeds not used for the
purposes permitted and within the time provided by this Section 4.14 is referred
to as the "Excess Proceeds."
For purposes of this Section 4.14, "Excess Proceeds Date" means each
date on which the Excess Proceeds exceeds $5,000,000. Not later than ten
Business Days after each Excess Proceeds Date, the Company will commence an
Asset Sale Offer, to the Holders to purchase, on a PRO RATA basis, for Cash,
Securities having a principal amount equal to the Excess Proceeds Amount at the
Asset Sale Offer Price, equal to 100% of principal amount, plus accrued but
unpaid interest to, and including, the date (the "Purchase Date"), the
Securities tendered are purchased and paid for in accordance with this Section
4.14. The Asset Sale Offer shall remain open for twenty Business Days, except
to the extent that a longer period is required by applicable law, but in any
case not more than sixty Business Days after such Excess Proceeds Date. Notice
of an Asset Sale Offer will be sent on or before the commencement of any Asset
Sale Offer, by first-class mail, by the Company to each Holder at its registered
address, with a copy to the Trustee. The notice to the Holders will contain all
information, instructions and materials required by applicable law or otherwise
material to such Holders' decision to tender Securities pursuant to the Asset
Sale Offer. The notice, which (to the extent consistent with this Indenture)
shall govern the terms of the Asset Sale Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to
such notice and this Section 4.14;
(2) the Asset Sale Offer Amount, the Asset Sale Offer
Price (including the amount of accrued and unpaid interest), the Final Put
Date (as defined below), and the Purchase Date, which Purchase Date shall
be on or prior to 60 Business Days following the Excess Proceeds Date;
(3) that any Security or portion thereof not tendered
or accepted for payment will continue to accrue interest;
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(4) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the immediately following
paragraph of this Section 4.14 or such payment is otherwise prevented, any
Security, or portion thereof, accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security, or
portion thereof, purchased pursuant to an Asset Sale Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding anything in this Indenture to the contrary, be the Company
or any Affiliate of the Company) at the address specified in the notice
prior to the close of business on the earlier of (a) the third Business
Day prior to the Purchase Date and (b) the third Business Day following
the expiration of the Asset Sale Offer (such earlier date being the "Final
Put Date");
(6) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 4.14, notwithstanding any other provision of this
Indenture, be the Company or any Affiliate of the Company) receives, up to
the close of business on the Final Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased;
(7) that if Securities in a principal amount in excess
of the principal amount of Securities to be acquired pursuant to the Asset
Sale Offer are tendered and not withdrawn, the Trustee shall select the
Securities to be purchased on a PRO RATA basis (with such adjustments as
may be deemed appropriate by the Company so
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that only Securities in denominations of $1,000 or integral multiples of
$1,000 shall be acquired);
(8) that Holders whose Securities were purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) a brief description of the circumstances and
relevant facts regarding such Asset Sales.
On or before a Purchase Date, the Company shall, to the extent
lawful, (i) accept for payment Securities or portions thereof properly tendered
pursuant to the Asset Sale Offer on or before the Final Put Date (on a PRO
rata basis if required pursuant to paragraph (7) of this Section 4.14), (ii)
deposit with the Paying Agent Cash sufficient to pay the Asset Sale Offer Price
for all Securities or portions thereof so tendered and accepted and (iii)
deliver to the Paying Agent Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall on each Purchase Date mail or deliver to
Holders of Securities so accepted payment in an amount equal to the Asset Sale
Offer Price for such Securities, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; PROVIDED that if the Purchase
Date is after a regular Record Date and on or prior to the Interest Payment Date
to which such Record Date relates, the accrued interest shall be payable to the
Holder of the purchased Securities registered on the relevant Record Date. Any
Security not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof.
All Net Cash Proceeds from an Event of Loss shall be applied to the
restoration, repair or replacement of the asset so affected or invested, used
for prepayment of Senior Debt, or used to repurchase Securities, all within the
period and as otherwise provided above in clauses 1(a), 1(b) or 1(c) of the
first paragraph of this covenant.
In addition to the foregoing, the Company will not, and will not
permit any of its Subsidiaries to, direct-
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ly or indirectly make any Asset Sale of any of the Equity Interests of any
Subsidiary except pursuant to an Asset Sale of all the Equity Interests of such
Subsidiary.
Any such Asset Sale Offer shall comply with all applicable laws,
rules and regulations, including Regulation 14E of the Exchange Act and the
rules and regulations thereunder and all other applicable Federal and State
securities laws, if applicable, and any provisions of this Indenture that
conflict with such laws shall be deemed to be superseded by the provisions of
such laws.
If the amount required to be paid by the Company in order to acquire
all Securities duly tendered by Holders (and not withdrawn) pursuant to an Asset
Sale Offer (the "Acceptance Amount"), made pursuant to the second paragraph of
this Section 4.14 is less than the Asset Sale Offer Amount, the excess of the
Asset Sale Offer Amount over the Acceptance Amount may be used by the Company
for general corporate purposes without restriction, unless otherwise restricted
by the other provisions of this Indenture. Upon consummation of any Asset Sale
Offer made in accordance with the terms of this Indenture, the Accumulated
Amount will be reduced to zero irrespective of the amount of Securities tendered
pursuant to the Asset Sale Offer.
Notwithstanding the foregoing provisions of clause (1)(b) in the
first paragraph of this Section 4.14, the Company may invest in a controlling
interest in the Capital Stock of an entity engaged in a Related Business;
PROVIDED, that concurrently with such an Investment, such entity becomes a
Subsidiary Guarantor.
SECTION 4.15. LIMITATION ON ASSET SWAPS.
Neither the Company nor any of its Subsidiaries shall, and shall not
permit any of their Subsidiaries to, in one or a series of related transactions,
directly or indirectly, engage in any Asset Swaps, unless: (i) at the time of
entering into the agreement to swap assets and immediately after giving effect
to the proposed Asset Swap, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; (ii) the Company
would, after giving PRO FORMA effect to the proposed Asset Swap, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Leverage Ratio; (iii) the respective fair market values of the assets being
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purchased and sold by the Company or any of its Subsidiaries (as determined in
good faith by the management of the Company or, if such Asset Swap includes
consideration in excess of $2.5 million by the Board of Directors of the
Company, as evidenced by a Board Resolution) are substantially the same at the
time of entering into the agreement to swap assets; and (iv) at the time of the
consummation of the proposed Asset Swap, the percentage of any decline in the
fair market value (determined as aforesaid) of the asset or assets being
acquired by the Company and its Subsidiaries shall not be significantly greater
than the percentage of any decline in the fair market value (determined as
aforesaid) of the assets being disposed of by the Company or its Subsidiaries,
calculated from the time the agreement to swap assets was entered into.
SECTION 4.16. LIMITATION ON LINES OF BUSINESS.
The Company and its Subsidiaries shall not, and shall not permit any
of their Subsidiaries to, directly or indirectly, engage to any substantial
extent in any line or lines of business activity other than that which, in the
reasonable good faith judgment of the Board of Directors of the Company is a
Related Business.
SECTION 4.17. RESTRICTION ON SALE AND ISSUANCE OF SUBSIDIARY
STOCK.
Neither the Company nor the Guarantors shall sell, or permit any
of their Subsidiaries to issue or sell, any Equity Interests of any Subsidiary
of the Company to any person other than the Company or a Wholly owned Subsidiary
of the Company, except for Equity Interests with no preferences or special
rights or privileges and with no redemption or prepayment provisions.
SECTION 4.18. LIMITATION ON TRANSACTIONS PRIOR TO CONSUMMATION OF
THE MERGER.
Prior to the consummation of the Merger, the Company shall not,
directly or indirectly, make any loan, advance or guaranty, or sell, lease,
transfer or otherwise dispose of any of its properties, or enter into any
transaction, or enter into or amend any contract, agreement or understanding,
except as may be necessary in contemplation of or in connection with the
consummation of the Merger;
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PROVIDED, HOWEVER, this covenant shall be of no further force and effect upon
consummation of the Merger.
SECTION 4.19. JACOR ACTION CONCURRENT WITH CONSUMMATION OF THE
MERGER.
Concurrently with consummation of the Merger, the Initial
Guarantor will, directly or indirectly, contribute, convey or transfer all of
the Equity Interests of its wholly owned subsidiaries to the Company, at which
time such subsidiaries shall become Subsidiary Guarantors if required by Section
12.3.
SECTION 4.20. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Guarantors hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee or any
Paying Agent, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
(a) The Company will not, directly or indirectly, consolidate
with or merge with or into another person or sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis), whether
in a single transaction or a series of related
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transactions, to another person or group of affiliated persons or adopt a Plan
of Liquidation, unless (i) either (a) the Company is the continuing entity or
(b) the resulting, surviving or transferee entity or in the case of a Plan of
Liquidation, the entity which receives the greatest value from such Plan of
Liquidation is a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the obligations of the Company in connection with the
Securities and this Indenture; (ii) no Default or Event of Default shall exist
or shall occur immediately after giving effect on a PRO FORMA basis to such
transaction; and (iii) immediately after giving effect to such transaction on a
PRO FORMA basis, the consolidated resulting, surviving or transferee entity
or, in the case of a Plan of Liquidation, the entity which receives the greatest
value from such Plan of Liquidation would immediately thereafter be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio
set forth in Section 4.11; PROVIDED, HOWEVER, nothing in this clause (iii)
shall prevent the consummation of the Merger.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company or consummation of a Plan of
Liquidation in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into which the Company is merged or to which
such transfer is made or, in the case of a Plan of Liquidation, the entity which
receives the greatest value from such Plan of Liquidation shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named herein as the Company, and when a successor corporation duly assumes all
of the
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obligations of the Company pursuant hereto and pursuant to the Securities, the
Company shall be released from such obligations under the Securities and this
Indenture except with respect to any obligations that arise from or are related
to, such transaction.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure by the Company to pay any installment of interest
upon the Securities as and when the same becomes due and payable, and the
continuance of any such failure for a period of 30 days;
(2) failure by the Company to pay all or any part of the
principal of or premium, if any, on the Securities when and as the same
becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, default in the payment of the
Change of Control Purchase Price in accordance with Article XI or the
Asset Sale Offer Price in accordance with Section 4.14, or otherwise;
(3) failure by the Company or any Guarantor to observe or
perform any other covenant or agreement contained in the Securities or
this Indenture and, subject to certain exceptions, the continuance of such
failure for a period of 60 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities outstanding,
specifying such default or breach, requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder;
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(4) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of
its Significant Subsidiaries as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization of the Company or any of
its Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a
period of 60 consecutive days; or a decree, judgment or order of a court
of competent jurisdiction appointing a receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency for the Company, any of its
Significant Subsidiaries, or any substantial part of the property of any
such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of 60
days;
(5) a default in any issue of Indebtedness of the Company or
any of its Subsidiaries with an aggregate principal amount in excess of
$5.0 million, in either case (a) resulting from the failure to pay
principal at final maturity, or (b) as a result of which the maturity of
such Indebtedness has been accelerated prior to its stated maturity;
(6) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under any
bankruptcy or similar law or similar statute, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any substantial part of its assets or property, or
shall make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due, fail generally to pay its debts as they become due, or take any
corporate action in furtherance of any of the foregoing; or
(7) final unsatisfied judgments not covered by insurance
aggregating in excess of $5.0 million at any one time shall be rendered
against the Company or
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any of its Subsidiaries and not stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60 days (or,
in the case of any such final judgment which provides for payment over
time, which shall so remain unstayed, unbonded or undischarged beyond any
applicable payment date provided therein).
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND
Annulment.
If an Event of Default occurs and is continuing (other than an Event
of Default specified in Section 6.1(4) or (6) relating to the Company or its
Significant Subsidiaries) then in every such case, unless the principal of all
of the Securities shall have already become due and payable, either the Trustee
or the Holders of 25% in aggregate principal amount of the Securities
outstanding, by a notice in writing to the Company (and to the Trustee if given
by Holders) (an "Acceleration Notice"), may declare all of the principal and
accrued interest thereon to be due and payable immediately; provided, however,
that if any Senior Debt is outstanding pursuant to the New Credit Facility upon
a declaration of such acceleration, such principal and interest shall be due and
payable upon the earlier of (x) the third Business Day after the sending to the
Company and the Representative of such written notice, unless such Event of
Default is cured or waived prior to such date and (y) the date of acceleration
of any Senior Debt under the New Credit Facility. In the event a declaration of
acceleration resulting from an Event of Default described in Section 6.1(5)
above has occurred and is continuing, such declaration of acceleration shall be
automatically annulled if such default is cured or waived or the holders of the
Indebtedness which is the subject of such default have rescinded their
declaration of acceleration in respect of such Indebtedness within five days
thereof and the Trustee has received written notice or such cure, wavier or
rescission and no other Event of Default described in Section 6.1(5) above has
occurred that has not been cured or waived within five days of the declaration
of such acceleration in respect of such Indebtedness. If an Event of Default
specified in Section 6.1(4) or (6) above, relating to the Company or any
Significant Subsidiary occurs, all principal and accrued interest thereon will
be immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
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At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any,
applicable to) any Securities which would become due other than by
reason of such declaration of acceleration, and interest thereon at
the rate borne by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate borne
by the Securities,
(D) all sums paid or advanced by the
Trustee hereunder and the compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel, and any other
amounts due the Trustee under Section 7.7, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.12, including, if applicable, any Event of
Default relating to the covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to (i) any
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covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend, unless
such default has been waived by such a supermajority. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
by Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, or interest specified in clause (1) or (2) of Section 6.1
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the whole amount then due
and payable on such Securities for principal, premium (if any) and interest,
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal and premium, if any, or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in respect
of the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agent and counsel and
all other amounts due the Trustee under Section 7.7) and of the Holders
allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize
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the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of compensation to,
and expenses, disbursements and advances of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the Holders in payment of the amounts then due and
unpaid for principal of, premium (if any) and interest on, the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium (if any) and interest,
respectively; and
THIRD: To the Company or such other Person as may be lawfully
entitled thereto, the remainder, if any.
The Trustee may, but shall not be obligated to, fix a record date
and payment date for any payment to the Holders under this Section 6.6.
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SECTION 6.7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct
the Trustee to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(A) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate
principal amount of then outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(E) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders of
a majority in aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
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SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any) and interest on, such
Security on the Maturity Dates of such payments as expressed in such Security
(in the case of redemption, the Redemption Price on the applicable Redemption
Date, in the case of the Change of Control Payment, on the applicable Change of
Control Payment Date, and in the case of the Asset Sale Offer Price, on the
Purchase Date) and to institute suit for the enforcement of any such payment
after such respective dates, and such rights shall not be impaired without the
consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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SECTION 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, PROVIDED, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or involve the Trustee in personal liability,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part in
such direction, and
(3) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 6.12. WAIVER OF PAST DEFAULT.
Subject to Section 6.8, and prior to the declaration of acceleration
of the maturity of the Securities, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any past default hereunder and its consequences,
except a default
(A) in the payment of the principal of, premium, if
any, or interest on, any Security as specified in clauses (1) and (2) of
Section 6.1 and not yet cured,
(B) in respect of a covenant or provision hereof which,
under Article IX, cannot be modified or amended without the consent of the
Holder of each outstanding Security affected, or
(C) in respect of any provision hereof which, under
Article IX, cannot be modified, amended or waived without the consent of
the Holders of a supermajority of the aggregate principal amount of the
Securities at the time outstanding; PROVIDED, that any such waiver may
be effected with the consent of the
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Holders of a supermajority of the aggregate principal amount of the
Securities then outstanding.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, or
premium (if any) or interest on, any Security on or after the respective
Maturity Date expressed in such Security (including, in the case of redemption,
on or after the Redemption Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee
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and the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed,
subject to the terms hereof.
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants
or obligations shall be implied in or read into this Indenture which are
adverse to the Trustee, and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.1,
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or at the request, order or direction of the Holders
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this
Section 7.1.
(f) The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5. The Trustee shall not
be
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liable for any action it takes or omits to take in good faith in reliance on
such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture, nor for any action
permitted to be taken or omitted hereunder by any Agent.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or such
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV hereof
or as to the performance by any Agent of its duties hereunder. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
except any Default or Event of Default of which the Trustee shall have received
written notification or with respect to which a Trustee Officer shall have
actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter
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be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers'
Certificate.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication (if executed by the Trustee), or the use or
application of any funds received by a Paying Agent other than the Trustee.
SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder notice
of the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any) of, or interest on, any Security
(including the payment of the Change of Control Purchase Price on the Change of
Control Payment Date, the payment of the Redemption Price on the Redemption Date
and the payment of the Offer Price on the Purchase Date), the Trustee may
withhold the notice if and so long as a Trust Officer in good faith determines
that withholding the notice is in the interest of the Securityholders.
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SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15, 1997
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such May 15 that complies
any with TIA Section 313(a). The Trustee also shall comply with TIA Sections
313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company and the Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers and
each of them, directors, attorneys-in-fact and agents for, and hold it harmless
against, any claim, demand, expense (including but not limited to reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel),
loss or liability incurred by it without negligence or bad faith on the part of
the Trustee, arising out of or in connection with the administration of this
trust and its rights or duties hereunder including the reasonable costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which
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it may seek indemnity. The Company and the Guarantors shall defend the claim
and the Trustee shall provide reasonable cooperation at the Company's and the
Guarantors' expense in the defense. The Trustee may have separate counsel and
the Company and the Guarantors shall pay the reasonable fees and expenses of
such counsel. The Company and the Guarantors need not pay for any settlement
made without their written consent. The Company and the Guarantors need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on all
assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(4) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the Guarantors' obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
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(c) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in aggregate principal amount of the Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 have been paid, the retiring Trustee shall transfer all property held by it
as trustee to the successor Trustee, subject to the lien provided in Section
7.7, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in aggregate principal amount of the
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company and the Guarantors' obligations under Section 7.7 shall
continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the re-
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sulting, surviving or transferee corporation without any further act shall, if
such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may,
at its option and at any time, elect to have Section 8.2 or may, at any time,
elect to have Section 8.3 applied to all outstanding Securities upon compliance
with the conditions set forth below in this Article VIII.
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SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.2, the Company and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.5 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in Section 8.4, and as more fully set forth in such section, payments
in respect of the principal of, premium, if any, and interest on such Securities
when such payments are due, (b) the Company's obligations with respect to such
Securities under Sections 2.4, 2.6, 2.7, 2.10 and 4.2, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's and the
Guarantors' obligation in connection therewith and (d) this Article VIII. Upon
Legal Defeasance as provided herein, the Guaranty of each Guarantor shall be
fully released and discharged and the Trustee shall promptly execute and deliver
to the Company any documents reasonably requested by the Company to evidence or
effect the foregoing. Subject to compliance with this Article VIII, the Company
may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 with respect to the Securities.
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.3, the Company and the Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and 4.17,
4.18, 4.19, Article V, Article XI and Article XII with respect to the
outstanding Securities on and after the
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date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder.
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities, the Company need not comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document (and Section 6.1(3) shall
not apply to any such covenant), but, except as specified above, the remainder
of this Indenture and such Securities shall be unaffected thereby. In addition,
upon the Company's exercise under Section 8.1 of the option applicable to this
Section 8.3, Sections 6.1(3) through 6.1(7) shall not constitute Events of
Default. Upon Covenant Defeasance, as provided herein, the Guaranty of each
Guarantor shall be fully released and discharged and the Trustee shall promptly
execute and deliver to the Company any documents reasonably requested by the
Company to evidence or effect the foregoing.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or Section 8.3 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfactory to the Trustee
satisfying the requirements of Section 7.10 who shall agree to comply with the
provisions of this Article VIII applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (a)
Cash in an amount, or (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, Cash in an amount, or (c) a combination thereof, in such amounts, as in
each case will be sufficient, in the
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opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge and which shall be applied by the Paying Agent (or other
qualifying trustee) to pay and discharge the principal of, premium, if any, and
interest on the outstanding Securities on the Stated Maturity or on the
applicable Redemption Date, as the case may be, of such principal or installment
of principal, premium, if any, or interest; PROVIDED that the Paying Agent
shall have been irrevocably instructed to apply such Cash and the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities. The Paying Agent shall promptly advise the Trustee in writing of
any Cash or Securities deposited pursuant to this Section 8.4;
(b) In the case of an election under Section 8.2, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company have
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such Legal Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) In the case of an election under Section 8.3, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Holders of the outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to Federal income tax in the same
amount, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit or,
in so far as Section 6.1(4) or Section 6.1(6) is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition is a condition
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subsequent which shall not be deemed satisfied until the expiration of such
period, but in the case of Covenant Defeasance, the covenants which are defeased
under Section 8.3 will cease to be in effect unless an Event of Default under
Section 6.1(4) or Section 6.1(6) occurs during such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company,
the Guarantors, or any of their Subsidiaries is a party or by which any of them
is bound;
(f) In the case of an election under either Section 8.2 or
8.3, the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.2 or 8.3 was not made by the Company with the intent of preferring the
Holders over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;
(g) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the conditions precedent provided for have
been complied with; and
(h) The Company shall have delivered to the Trustee an
Opinion of Counsel stating that the conditions set out in Section 8.4(a)(with
respect to the validity and perfection of the security interest), (b), (c) and
(e) above.
(i) If the New Credit Facility is in effect, the Company or
JCAC shall have delivered to the Trustee any required consent of the lenders
under the New Credit Facility to such defeasance or covenant defeasance, as the
case may be.
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6, all Cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Paying Agent (or other
qualifying trustee, collectively for purposes of this Section 8.5, the "Paying
Agent")
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pursuant to Section 8.4 in respect of the outstanding Securities shall be held
in trust and applied by the Paying Agent, in accordance with the provisions of
such Securities and this Indenture, to the payment, either directly or through
any other Paying Agent as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
SECTION 8.6. REPAYMENT TO THE COMPANY.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee or the Paying Agent shall deliver or pay to the Company from time to
time upon the request of the Company any Cash or U.S. Government Obligations
held by it as provided in Section 8.4 hereof which in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
Any Cash and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to (i) be published once, in the NEW YORK TIMES and THE WALL
Street Journal (national edition), or (ii) mail to each such Holder, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
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SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any Cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's and the Guarantors' obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 8.2 and 8.3, as the
case may be; PROVIDED, HOWEVER, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the Cash and U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor,
when authorized by Board Resolutions, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make
any other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause shall not adversely affect the
interests of any Holder in any respect;
(2) to add to the covenants of the Company or the Guarantors
for the benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or the Guarantors;
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(3) to provide for additional collateral for or additional
Guarantors of the Securities;
(4) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the obligations of the
Company, herein and in the Securities in accordance with Article V;
(5) to comply with the TIA;
(6) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guaranty of such Guarantor
(as set forth in Section 12.4) in accordance with Article XIII;
(7) to evidence the release of any Guarantor in accordance
with Article XII;
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Securities; or
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 6.8, with the consent of the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written act of said Holders delivered to the Company and the Trustee, the
Company or any Guarantor, when authorized by Board Resolutions, and the Trustee
may amend or supplement this Indenture or the Securities or enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. Subject to Section 6.8, the
Holder or Holders of not less than a majority in aggregate principal amount of
then outstanding Securities may waive compliance by the Company or any Guarantor
with any provision of this Indenture or the Securities. Notwithstanding any of
the above, however, no such amendment, supplemental indenture or waiver shall
without the consent of the Holders of not less than 75% of the aggregate
principal amounts of Securities at the time outstanding alter the terms or
provisions of Section 11.1 or Section 11.2 in a manner adverse to the Holders;
and no such amendment, supplemental indenture
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or waiver shall, without the consent of the Holder of each outstanding Security
affected thereby:
(1) change the Stated Maturity on any Security, or reduce the
principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium payable upon the redemption thereof, or change
the place of payment where, or the coin or currency in which, any Security or
any premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or in the case of redemption, on or after the Redemption Date), or
reduce the Change of Control Purchase Price, the Citicasters Purchase Price or
the Asset Sale Offer Price or alter the provisions (including the defined terms
used herein) regarding the right of the Company to redeem the Securities in a
manner adverse the Holders; or
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture; or
(3) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provision of this Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby.
Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall without the consent of the Representative
on behalf of the Required Lenders amend, waive or otherwise modify the terms or
provisions of Article X in a manner adverse to the Lenders (as defined in the
New Credit Facility).
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company
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to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Company or the Person designated by the Company as the Person to whom
consents should be sent if such revocation is received by the Company or such
Person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
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their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (3) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; PROVIDED, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on a Security, on or after the respective
dates set for such amounts to become due and payable expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Registrar or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supple-
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ment or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
ARTICLE X
SUBORDINATION
SECTION 10.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and interest on the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of the Securities by the Company or the
Guarantors (including, without limitation, pursuant to Article III or Section
4.1, 4.14, 11.1, 11.2 or Article XII is expressly made and shall be subordinated
in right of payment, to the extent and in the manner provided in this Article X,
to the prior payment in full in Cash of all existing and future Senior Debt of
the Company and the Guarantors and that these subordination provisions are for
the benefit of the holders of Senior Debt.
This Article X shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt, and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 10.2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment (including any payment which may be payable to
any Holder by reason of the subordination of any other indebtedness or other
obligations to, or guarantee of, the Securities) or distribution (by set-off or
otherwise) shall be made by or on behalf of the Company or a Guarantor, as
applicable, on account of the Securities, including the principal of, premium,
if any, or interest on the Securities (including any repurchases of Securities)
or any other amounts with respect thereto or on account of the redemption
provisions of the Securities for cash or property (other than Junior
Securities), (i) upon the maturity of any Senior Debt of the Company or such
Guarantor by lapse of time, acceleration (unless waived) or otherwise, unless
and
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until all principal of, premium, if any, and the interest on, and all other
amounts with respect to, such Senior Debt shall first be paid in full in Cash or
otherwise to the extent each of the holders of Senior Debt accept satisfaction
of amounts due to such holder by settlement in other than Cash, or (ii) in the
event of default in payment of any principal of, or premium, if any, or interest
on, or any other amounts with respect to, Senior Debt of the Company or such
Guarantor when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise (each of the foregoing,
a "Payment Default") unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist.
(b) Upon (i) the happening of a default (other than a Payment
Default) that permits the holders of Senior Debt (or a percentage thereof) to
declare such Senior Debt to be due and payable and (ii) written notice of such
default given to the Company and the Trustee by the Representative under the New
Credit Facility or by the holders of an aggregate of at least $25.0 million
principal amount outstanding of any other Senior Debt or their representative at
such holders' direction (a "Payment Notice"), then, unless and until such
default has been cured or waived or otherwise has ceased to exist, no payment
(including any payment which may be payable to any Holder by reason of the
subordination of any other indebtedness or other obligations to, or guarantee
of, the Securities) or distribution (by set-off or otherwise) may be made by or
on behalf of the Company or any Guarantor which is an obligor under such Senior
Debt on account of the principal of, premium, if any, or interest on the
Securities (including any repurchases of any of the Securities), or any other
amount with respect thereto, or on account of the redemption provision of the
Securities, in any such case, other than payments made with Junior Securities.
Notwithstanding the foregoing, unless the Senior Debt in respect of which such
default exists has been declared due and payable in its entirety within 179 days
after the Payment Notice is delivered as set forth above (such period being
hereinafter referred to as the "Payment Blockage Period") (and such declaration
has not been rescinded or waived), at the end of the Payment Blockage Period
(and assuming that no Payment Default Exists), unless Section 10.3 shall be
applicable the Company and the Guarantors shall not be prohibited by the
subordination provisions from paying all sums then due and not paid to the
Holders of the Securities during the Payment Blockage Period due to the
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foregoing prohibitions and to resume all other payments as and when due on the
Securities. Any number of Payment Notices may be given; PROVIDED, HOWEVER;
that (i) not more than one Payment Notice shall be given within a period of any
360 consecutive days, and (ii) no default that existed upon the date of delivery
of such Payment Notice (whether or not such event of default is on the same
issue of Senior Debt) shall be made the basis for the commencement of any other
Payment Blockage Period.
(c) In furtherance of the provisions of Section 10.1, in the
event that, notwithstanding the foregoing provisions of this Section 10.2, any
payment or distribution of assets in respect of the Securities, including
principal of or interest on the Securities or to defease or acquire any of the
Securities (including repurchases of Securities pursuant to Section 4.14, 11.1
or 11.2) for Cash, property or securities (excluding payments made with Junior
Securities), or on account of the redemption provisions of the Securities, shall
be made by the Company or any of the Guarantors and received by the Trustee, by
any Holder or by any Paying Agent (or, if the Company is acting as the Paying
Agent, money for any such payment shall be segregated and held in trust), at a
time when such payment or distribution was prohibited by the provisions of this
Section 10.2, then, unless such payment or distribution is no longer prohibited
by this Section 10.2, such payment or distribution (subject to the provisions of
Section 10.7) shall be received and held in trust by the Trustee or such Holder
or Paying Agent for the benefit of the holders of Senior Debt of the Company or
such Guarantor, and shall be paid or delivered by the Trustee or such Holders or
such Paying Agent, as the case may be, to the holders of Senior Debt of the
Company or such Guarantor remaining unpaid or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Debt of the Company or such
Guarantor may have been issued, ratably according to the aggregate amounts
unpaid on account of such Senior Debt held or represented by each, for
application to the payment of all Senior Debt in full in Cash or otherwise to
the extent each of the holders of such Senior Debt accept satisfaction of
amounts due by settlement in other than Cash after giving effect to all
concurrent payments and distributions to or for the holders of such Senior Debt.
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SECTION 10.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or any Guarantor or
upon any dissolution, winding up, total or partial liquidation or reorganization
of the Company or any Guarantor, whether voluntary or involuntary, in
bankruptcy, insolvency, receivership or a similar proceeding or upon assignment
for the benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, shall first be entitled to receive payments in full of
all amounts of Senior Debt in Cash or otherwise to the extent each of such
holders accepts satisfaction of amounts due by settlement in other than Cash or
before the Holders are entitled to receive any payment (including any payment
which may be payable to any Holder by reason of the subordination of any other
indebtedness or other obligations to, or guarantee of, the Securities) or
distribution on account of the principal of, premium, if any, and any interest
on, or other amounts with respect to, the Securities (other than Junior
Securities);
(b) any payment or distribution of assets of the Company or
such Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities), to which the Holders or
the Trustee on behalf of the Holders would be entitled (by set-off or otherwise)
except for the provisions of this Article X, shall be paid by the liquidating
Trustee or agent or other person making such a payment or distribution, directly
to the holders of such Senior Debt or their representative to the extent
necessary to make payment in full on all such Senior Debt remaining unpaid,
after giving effect to all concurrent payments or distributions to the holders
of such Senior Debt; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company or any Guarantor (other than
the Junior Securities), shall be received by the Trustee or the Holders at a
time when such payment or distribution shall be prohibited by the foregoing
provisions, such payment or distribution shall be held in trust for the benefit
of the holders of such Senior
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Debt, and shall be paid or delivered by the Trustee or such Holders, as the case
may be, to the holders of such Senior Debt remaining unpaid or to their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
held or represented by each, for application to the payment of all such Senior
Debt may have been issued, ratably according to the aggregate principal amounts
remaining unpaid on account of such Senior Debt remaining unpaid, to the extent
necessary to pay all such Senior Debt in full in Cash or otherwise to the extent
each of the holders of such Senior Debt accept satisfaction of amounts due by
settlement in other than Cash after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
SECTION 10.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF
HOLDERS OF SENIOR DEBT.
Subject to the payment in full in Cash of all Senior Debt of the
Company or any Guarantor as provided herein, the Holders of Securities shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of assets of the Company applicable to the Senior Debt until
all amounts owing on the Securities shall be paid in full, and for the purpose
of such subrogation no such payments or distributions to the holders of such
Senior Debt by or on behalf of the Company or any Guarantor, or by or on behalf
of the Holders by virtue of this Article X, which otherwise would have been made
to the Holders shall, as between the Company or any Guarantor and the Holders,
be deemed to be payment by the Company or any Guarantor or on account of such
Senior Debt, it being understood that the provisions of this Article X are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of such Senior Debt, on the other
hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article X shall have been
applied, pursuant to the provisions of this Article X, to the payment of amounts
payable under Senior Debt of the Company or any Guarantor, then the Holders
shall be entitled to receive from the holders of such Senior Debt any payments
or distributions received by such holders of Senior Debt in excess of the amount
sufficient to pay all amounts payable under or in
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respect of such Senior Debt in full in Cash or otherwise to the extent each of
such holders accepts satisfaction of amounts due by settlement in other than
Cash.
SECTION 10.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS
UNCONDITIONAL.
Nothing contained in this Article X or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company and
any Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of the Company and the Guarantors
other than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article X, of the holders of Senior Debt in respect
of Cash, property or securities of the Company and the Guarantors received upon
the exercise of any such remedy. Notwithstanding anything to the contrary in
this Article X or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company and the Guarantors referred to in this
Article X, the Trustee, subject to the provisions of Sections 7.1 and 7.2, and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
Trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Company or any Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X so long as such court has been apprised of the provisions of,
or the order, decree or certificate makes reference to, the provisions of this
Article X. Nothing in this Section 10.5 shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
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SECTION 10.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED
IN ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee or any Paying Agent shall have
received, no later than one Business Day prior to such payment, written notice
thereof from the Company or from one or more holders of Senior Debt or from any
representative therefor and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Sections 7.1 and 7.2, shall be
entitled in all respects conclusively to assume that no such fact exists.
SECTION 10.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the New Credit Facility and (ii)
allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article X. Otherwise, any deposit of assets
with the Trustee or the Agent (whether or not in trust) for the payment of
principal of or interest on any Securities shall be subject to the provisions of
Sections 10.1, 10.2, 10.3 and 10.4.
SECTION 10.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF THE COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article X shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or any Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company or any Guarantor with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may at
any time and from time to time without the consent of or notice to the Trustee
or the Holders of the Securities without incurring any responsibility to the
Holders extend, renew, modify or amend the terms of the
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Senior Debt or any security therefor and release, sell or exchange such security
and otherwise deal freely with the Company and the Guarantors and any person
liable in any manner for the collection of Senior Debt, all without affecting
the subordination provisions or liabilities or obligations of the parties to
this Indenture or the Holders or to the holders of the Senior Debt.
SECTION 10.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article X and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company or
any Guarantor), the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their representative to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Debt or their representative to vote in respect of the
claim of any Securityholder in any such proceeding.
SECTION 10.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in this
Article X in respect of any Senior Debt at
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any time held by it to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.
SECTION 10.11. ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium,
if any, or interest on the Securities by reason of any provision of this Article
X shall not be construed as preventing the occurrence of a Default or an Event
of Default under Section 6.1 or in any way prevent the Holders from exercising
any right hereunder other than the right to receive payment on the Securities.
SECTION 10.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR
DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company, any
Guarantor or any other Person, cash, property or securities to which any holders
of Senior Debt shall be entitled by virtue of this Article X or otherwise.
Nothing in this Section 10.12 shall affect the obligation of any other such
Person to hold such payment for the benefit of, and to pay such payment over to,
the holders of Senior Debt or their representative.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER
UPON A CHANGE OF CONTROL.
(a) In the event that a Change of Control has occurred, each
Holder shall have the right, at such Holder's option, pursuant to an irrevocable
and unconditional offer by the Company (the "Change of Control Offer"), to
require the Company to repurchase all or any part of such Holder's Securities
(PROVIDED, that the principal amount of such Securities at maturity must be
$1,000 or an integral
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multiple thereof) on a date (the "Change of Control Purchase Date") that is no
later than 35 Business Days after the Occurrence of such Change of Control, at a
cash price (the "Change of Control Purchase Price") equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the Change of Control Purchase Date.
(b) In the event of a Change of Control, the Company shall be
required to commence a Change of Control Offer as follows:
(1) the Change of Control Offer shall commence within 10
Business Days following the occurrence of the Change of Control;
(2) the Change of Control Offer shall remain open for 20
Business Days, except to the extent that a longer period is required by
applicable law, but in any case not more than 35 Business Days following
commencement (the "Change of Control Offer Period");
(3) upon the expiration of a Change of Control Offer, the
Company shall promptly purchase all of the properly tendered Securities at
the Change of Control Purchase Price;
(4) if the Change of Control Payment Date is on or after a
Record Date and on or before the related interest payment date, any
accrued interest will be paid to the Person in whose name a Security is
registered at the close of business on such Record Date, and no additional
interest will be payable to Securityholders who tender Securities pursuant
to the Change of Control Offer;
(5) the Company shall provide the Trustee and the Paying
Agent with notice of the Change of Control Offer at least three Business
Days before the commencement of any Change of Control Offer; and
(6) on or before the commencement of any Change of Control
Offer, the Company or the Registrar (upon the request and at the expense
of the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture)
shall govern the terms of the Change of Control Offer and shall state:
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(i) that the Change of Control Offer is being made
pursuant to such notice and this Section 11.1 and that all Securities, or
portions thereof, tendered will be accepted for payment;
(ii) the Change of Control Purchase Price (including
the amount of accrued and unpaid interest, subject to clause (b)(4)
above), the Change of Control Purchase Date and the Change of Control Put
Date (as defined below);
(iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the last paragraph of this
Section 11.1 or such payment is prevented, any Security, or portion
thereof, accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Purchase Date;
(v) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent (which may not for purposes of this Section 11.1,
notwithstanding anything in this Indenture to the contrary, be the Company
or any Affiliate of the Company) at the address specified in the notice
prior to the close of business on the earlier of (a) the third Business
Day prior to the Change of Control Payment Date and (b) the third Business
Day following the expiration of the Change of Control Offer (such earlier
date being the "Change of Control Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this Indenture
to the contrary, be the Company or any Affiliate of the Company) receives,
up to the close of business on the Change of Control Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
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Holder, the principal amount of the Securities the Holder is withdrawing
and a statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control.
Any such Change of Control Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Change of Control Purchase Date, the Company shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer on or before the Change of Control Put Date, (ii)
deposit with the Paying Agent Cash sufficient to pay the Change of Control
Purchase Price for all Securities or portions thereof so tendered and (iii)
deliver to the Registrar Securities so accepted together with an Officers'
Certificate listing the aggregate principal amount of the Securities or portions
thereof being purchased by the Company. The Paying Agent shall on the Change of
Control Purchase Date or promptly thereafter mail to Holders of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price for
such Securities, and the Trustee or its authenticating agent shall promptly
authenticate and the Registrar shall mail or deliver (or cause to be transferred
by book entry) to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; provided, however, that each
such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the consummation thereof.
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SECTION 11.2. REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
UPON FAILURE TO CONSUMMATE THE MERGER.
(a) In the event that the Merger has not become effective
prior to January 1, 1997, each Holder of Securities will have the right, at such
Holder's option, pursuant to an irrevocable and unconditional offer by the
Company (the "Citicasters Offer"), to require the Company to repurchase all or
any part of such Holder's Securities (PROVIDED, that the principal amount of
such Securities must be $1,000 or an integral multiple thereof) on a date (the
"Citicasters Purchase Date") that is no later than 35 Business Days after
January 1, 1997, at a cash price (the "Citicasters Purchase Price") equal to
101% of the principal amount thereof, together with accrued and unpaid interest,
if any, to the Citicasters Purchase Date.
(b) In the event that the Merger has not become effective
prior to January 1, 1997, the Company shall be required to commence a
Citicasters Offer as follows:
(1) the Citicasters Offer shall commence within 10 Business
Days following the occurrence of the failure to effect the Merger on
January 1, 1997;
(2) the Citicasters Offer shall remain open for 20 Business
Days, except to the extent that a longer period is required by applicable
law, but in any case not more than 35 Business Days following commencement
(the "Citicasters Offer Period");
(3) upon the expiration of a Citicasters Offer, the Company
shall promptly purchase all of the properly tendered Securities at the
Citicasters Purchase Price;
(4) if the Citicasters Payment Date is on or after a Record
Date and on or before the related interest payment date, any accrued
interest will be paid to the Person in whose name a Security is registered
at the close of business on such Record Date, and no additional interest
will be payable to Securityholders who tender Securities pursuant to the
Citicasters Offer;
(5) the Company shall provide the Trustee and the Paying
Agent with notice of the Citicasters
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Offer at least three Business Days before the commencement of any
Citicasters Offer; and
(6) on or before the commencement of any Citicasters Offer,
the Company or the Registrar (upon the request and at the expense of the
Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture)
shall govern the terms of the Citicasters Offer and shall state:
(i) that the Citicasters Offer is being made pursuant
to such notice and this Section 11.2 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(ii) the Citicasters Purchase Price (including the
amount of accrued and unpaid interest, subject to clause (b)(4) above),
the Citicasters Purchase Date and the Citicasters Put Date (as defined
below);
(iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the last paragraph of this
Section 11.2 or such payment is prevented, any Security, or portion
thereof, accepted for payment pursuant to the Citicasters Offer shall
cease to accrue interest after the Citicasters Purchase Date;
(v) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Citicasters Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent (which may not for purposes of this Section 11.2,
notwithstanding anything in this Indenture to the contrary, be the Company
or any Affiliate of the Company) at the address specified in the notice
prior to the close of business on the earlier of (a) the third Business
Day prior to the Citicasters Payment Date and (b) the third Business Day
following
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the expiration of the Citicasters Offer (such earlier date being the
"Citicasters Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 11.2, notwithstanding anything in this Indenture
to the contrary, be the Company or any Affiliate of the Company) receives,
up to the close of business on the Citicasters Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is withdrawing
and a statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased; and
(vii) a brief description of the events resulting in
such failure to effect the Merger.
Any such Citicasters Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Citicasters Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof properly tendered pursuant to
the Citicasters Offer on or before the Citicasters Put Date, (ii) deposit with
the Paying Agent Cash sufficient to pay the Citicasters Purchase Price for all
Securities or portions thereof so tendered and (iii) deliver to the Registrar
Securities so accepted together with an Officers' Certificate listing the
aggregate principal amount of the Securities or portions thereof being purchased
by the Company. The Paying Agent shall on the Citicasters Purchase Date or
promptly thereafter mail to Holders of Securities so accepted payment in an
amount equal to the Citicasters Purchase Price for such Securities, and the
Trustee or its authenticating agent shall promptly authenticate and the
Registrar shall mail or deliver (or cause to be transferred by book entry) to
such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered; provided, however, that each such new Security will
be in a principal amount of $1,000 or an integral multiple thereof. Any
Securities not so accepted shall be promptly mailed or delivered by the Company
to the
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Holder thereof. The Company will publicly announce the results of the
Citicasters Offer on or as soon as practicable after the consummation thereof.
ARTICLE XII
GUARANTY
SECTION 12.1. GUARANTY.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the Guarantors
hereby irrevocably and unconditionally guarantees (the "Guaranty"), jointly and
severally, to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the obligations
of the Company under this Indenture or the Securities, that: (w) the principal
and premium (if any) of and interest on the Securities will be paid in full when
due, whether at the Maturity Date or Interest Payment Date, by acceleration,
call for redemption, upon a Change of Control Offer, upon a Citicasters Offer,
upon an Asset Sale Offer or otherwise; (x) all other obligations of the Company
to the Holders or the Trustee under this Indenture or the Securities will be
promptly paid in full or performed, all in accordance with the terms of this
Indenture and the Securities; and (y) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, call for redemption,
upon a Change of Control Offer, upon a Citicasters Offer, upon an Asset Sale
Offer or otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be jointly and severally obligated to pay
the same before failure so to pay becomes an Event of Default. If the Company
or a Guarantor defaults in the payment of the principal of, premium, if any, or
interest on, the Securities when and as the same shall become due, whether upon
maturity, acceleration, call for redemption, upon a Change of Control Offer,
upon a Citicasters Offer, upon an Asset Sale Offer or otherwise, without the
necessity of action by the Trustee or any Holder, each Guarantor shall be
required,
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jointly and severally, to promptly make such payment in full.
(b) Each Guarantor hereby agrees that its obligations with
regard to this Guaranty shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any delays in obtaining or realizing upon or
failures to obtain or realize upon collateral, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstances
that might otherwise constitute a legal or equitable discharge or defense of a
guarantor (except as provided in Sections 12.4 and 12.5). Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company or right to require the prior disposition
of the assets of the Company to meet its obligations, protest, notice and all
demands whatsoever and covenants that this Guaranty will not be discharged
(except to the extent released pursuant to Section 12.4 or 12.5) except by
complete performance of the obligations contained in the Securities and this
Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any Custodian,
trustee, or similar official acting in relation to the Company or such
Guarantor, any amount paid by either the Company or such Guarantor to the
Trustee or such Holder, this Guaranty, to the extent theretofore discharged,
shall be reinstated in full force and effect (except to the extent released
pursuant to Section 12.4 or 12.5). Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.2 for the purposes of this Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2,
those obligations (whether or not due and payable) will forthwith become
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due and payable by each of the Guarantors for the purpose of this Guaranty.
(d) Each Guarantor and by its acceptance of a Security issued
hereunder each Holder hereby confirms that it is the intention of all such
parties that the guarantee by such Guarantor set forth in Section 12.1(a) not
constitute a fraudulent transfer or conveyance for purpose of any Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its guarantee set forth in Section 12.1(a) shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its guarantee or pursuant to the
following paragraph of this Section 12.1(d), result in the obligations of such
Guarantor under such guarantee not constituting such a fraudulent transfer or
conveyance.
Each Guarantor that makes any payment or distribution under Section
12.1(a) shall be entitled to a contribution from each other Guarantor equal to
its Pro Rata Portion of such payment or distribution. For purposes of the
foregoing, the "Pro Rata Portion" of any Guarantor means the percentage of the
net assets of all Guarantors held by such Guarantor, determined in accordance
with GAAP.
(e) It is the intention of each Guarantor and the Company
that the obligations of each Guarantor hereunder shall be joint and several and
in, but not in excess of, the maximum amount permitted by applicable law.
Accordingly, if the obligations in respect of the Guaranty would be annulled,
avoided or subordinated to the creditors of any Guarantor by a court of
competent jurisdiction in a proceeding actually pending before such court as a
result of a determination both that such Guaranty was made without fair
consideration and, immediately after giving effect thereto, such Guarantor was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of such Guarantor under such Guaranty shall
be reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; PROVIDED, HOWEVER,
that
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any reduction pursuant to this paragraph shall be made in the smallest amount as
is strictly necessary to reach such result. For purposes of this paragraph,
"fair consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
SECTION 12.2. EXECUTION AND DELIVERY OF GUARANTY.
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of a Guarantee substantially in the form annexed hereto as Exhibit B,
be deemed to have signed on each Security issued hereunder the notation of
guarantee set forth on the form of the Securities attached hereto as Exhibit A
to the same extent as if the signature of such Guarantor appeared on such
Security. The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guaranty set forth in
Section 12.1 on behalf of each Guarantor. The notation of a guaranty set forth
on any Security shall be null and void and of no further effect with respect to
the guaranty of any Guarantor which, pursuant to Section 12.4 or Section 12.5,
is released from such guaranty.
SECTION 12.3. FUTURE SUBSIDIARY GUARANTORS.
(i) All present Subsidiaries of the Company, if any, and their
Subsidiaries (other than the Excluded Subsidiaries), and (ii) all future
Subsidiaries of the Company and their Subsidiaries (other than Excluded
Subsidiaries), which are not prohibited from becoming guarantors by law or by
the terms of any Acquired Indebtedness or any agreement (other than an agreement
entered into in connection with the transaction resulting in such person
becoming a Subsidiary of the Company or its Subsidiaries) to which such
Subsidiary is a party ("Future Subsidiary Guarantors"), jointly and severally,
will guaranty irrevocably and unconditionally all principal, premium, if any,
and interest on the Securities on a senior subordinated basis; PROVIDED,
HOWEVER, that upon any change in the law, Acquired Indebtedness or any
agreement (whether by expiration, termination or otherwise) which no longer
prohibits a Subsidiary of the Company from becoming a Subsidiary Guarantor, such
Subsidiary shall immediately thereafter become a Future Subsidiary Guarantor;
PROVIDED, FURTHER, in the event that any Subsidiary of the Company
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or their Subsidiaries becomes a guarantor of any other Indebtedness of the
Company or any of its Subsidiaries or any of their Subsidiaries, such Subsidiary
shall immediately thereafter become a Future Subsidiary Guarantor.
SECTION 12.4. GUARANTOR MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or into
the Company or any other Guarantor. Upon any such consolidation or merger, the
guarantees (as set forth in Section 12.1) of the Guarantor which is not the
survivor of the merger or consolidation, and of any Subsidiary of such Guarantor
that is also a Guarantor, shall be released and shall no longer have any force
or effect.
(b) Nothing contained in this Indenture shall prevent any
sale or conveyance of assets of any Guarantor (whether or not constituting all
or substantially all of the assets of such Guarantor) to any Person, provided
that the Company shall comply with the provisions of Section 4.14 and 4.17, and
provided further that, in the event that all or substantially all of the assets
of a Guarantor are sold or conveyed, the guarantees of such Guarantor (as set
forth in Section 12.1) shall be released and shall no longer have any force or
effect.
(c) Except as provided in Section 12.4(a) or Section 12.5,
each Guarantor shall not, directly or indirectly, consolidate with or merge with
or into another Person, unless (i) either (a) the Guarantor is the continuing
entity or (b) the resulting or surviving entity is a corporation organized under
the laws of the United States, any state thereof or the District of Columbia and
expressly assumes by supplemental indenture all of the obligations of the
Guarantor in connection with the Securities and this Indenture; (ii) no Default
or Event of Default would occur as a consequence of (after giving effect, on a
PRO FORMA basis, to) such transaction; and (iii) the Guarantor has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation or merger and if a supplemental indenture is required,
such supplemental indenture comply with this Indenture and that all conditions
precedent herein relating to such transaction have been satisfied.
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(d) Upon any consolidation or merger of a Guarantor in
accordance with Section 12.4 hereof, the successor corporation formed by such
consolidation or into which the Guarantor is merged shall succeed to, and be
substituted for, and may exercise every right and power of, the Guarantor under
this Indenture with the same effect as if such successor corporation had been
named herein as the Guarantor, and when a successor corporation duly assumes all
of the obligations of the Guarantor pursuant hereto and pursuant to the
Securities, the Guarantor shall be released from such obligations.
SECTION 12.5. RELEASE OF GUARANTORS.
(a) Without any further notice or action being required by
any Person, any Guarantor, and each Subsidiary of such Guarantor that is also a
Guarantor, shall be fully and conditionally released and discharged from all
obligations under its guarantee and this Indenture, upon (i) the sale or other
disposition of all or substantially all of the assets or properties of such
Guarantor, or 50% or more of the Equity Interests of any such Guarantor to
Persons other than the Company and their Subsidiaries or (ii) the consolidation
or merger of any such Guarantor with any Person other than the Company or a
Subsidiary of the Company, if, as a result of such consolidation or merger,
Persons other than the Company and their Subsidiaries beneficially own more than
50% of the capital stock of such Guarantor, PROVIDED that, in either such
case, the Net Cash Proceeds of such sale, disposition, merger or consolidation
are applied in accordance with Section 4.14 of this Indenture; or (iii) a Legal
Defeasance or Covenant Defeasance, as set forth in Article VIII.
(b) The releases and discharges set forth in Section 12.5(a)
shall be effective (i) in the case of releases and discharges effected pursuant
to clause (i) or (ii) of Section 12.5(a) by virtue of a sale, disposition,
consolidation or merger, on the date of consummation thereof and (ii) in the
case of releases and discharges effected pursuant to clause (iii) of Section
12.5(a), upon the date of Covenant Defeasance or Legal Defeasance, as
applicable. At the written request of the Company, the Trustee shall promptly
execute and deliver appropriate instruments in forms reasonably acceptable to
the Company evidencing and further implementing any releases and discharges
pursuant to the foregoing provisions. If the Company desires the in-
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struments evidencing or implementing any releases or discharges to be
executed prior to the effectiveness of such releases and discharges as set
forth above, such instruments may be made conditional upon the occurrence of
the events necessary to cause the effectiveness of such releases and
discharges, as specified in the first sentence of this Section 12.5.
(c) Notwithstanding the foregoing provisions of this Article
XII, (i) any Guarantor whose guarantee would otherwise be released pursuant to
the provisions of this Section 12.5 may elect, by written notice to the Trustee,
to maintain such guarantee in effect notwithstanding the event or events that
otherwise would cause the release of such guarantee (which election to maintain
such guarantee in effect may be conditional or for a limited period of time),
and (ii) any Subsidiary of the Company which is not a Guarantor may elect, by
written notice to the Trustee, to become a Guarantor (which election may be
conditional or for a limited period of time).
SECTION 12.6. CERTAIN BANKRUPTCY EVENTS.
Each Guarantor hereby covenants and agrees, to the fullest extent
that it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guaranty and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the Bankruptcy Law or otherwise.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
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SECTION 13.2. NOTICES.
Any notices or other communications to the Company or any Guarantor,
Paying Agent, Registrar, Securities Custodian, transfer agent or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company or any Guarantor:
JCAC, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Treasurer
Telephone: (513) 621-1300
Telecopy: (513) 621-6087
if to the Trustee:
First Trust of Illinois, National Association
401 N. Michigan Avenue, Suite 370
Chicago, Illinois 60611
Attention: Christine Linde
Telephone: (312) 836-6748
Telecopy: (312) 836-6759
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be
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sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA Section 312(c).
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to
the Trustee to take any action under this Indenture, such Person shall furnish
to the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been met; and
(2) an Opinion of Counsel (in form and substance
reasonably satisfactory to the Trustee), stating that, in the opinion of
such counsel, all such conditions precedent have been met; PROVIDED,
HOWEVER, that in the case of any such request or application as to
which the furnishing of particular documents is specifically required by
any provision of this Indenture, no additional certificate or opinion need
be furnished under this Section 13.4.
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SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been met; and
(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been met; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.7. NON-BUSINESS DAYS.
If a payment date is not a Business Day at such place, payment may
be made at such place on the next succeeding day that is a Business Day, and no
interest shall accrue for the intervening period.
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SECTION 13.8. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE COMPANY AND THE
GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND
THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
EACH OF THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE GUARANTORS IN ANY
OTHER JURISDICTION.
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. NO RECOURSE AGAINST OTHERS.
No direct or indirect stockholder, partner, employee, officer or
director, as such, past, present or future of the Company, the Guarantors or any
successor entity, shall have any personal liability in respect of the
obligations of the Company or the Guarantors under the Securities or this
Indenture by reason of his or its status as such stockholder, partner, employee,
officer or director. Each Securityholder by accepting a Security
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waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities shall be 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 shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
JCAC, INC.
[Seal]
By: /s/ R. Christopher Weber
-------------------------------------
Name: R. Christopher Weber
Title: Senior Vice President
Attest: Jon M. Berry
---------------
Secretary
INITIAL GUARANTOR:
JACOR COMMUNICATIONS, INC.
[Seal]
By: /s/ R. Christopher Weber
-------------------------------------
Name: R. Christopher Weber
Title: Senior Vice President
Attest: Jon M. Berry
-------------------
Assistant Secretary
FIRST TRUST OF ILLINOIS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Christine Linde
-------------------------------------
Name: Christine Linde
Title: Vice President
-----------------------------------------
By:
-------------------------------------
Name:
Title:
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Exhibit A
[FORM OF SECURITY]
JCAC, INC.
10 1/8% SENIOR SUBORDINATED NOTE
DUE 2006
CUSIP: 46611E-AA1
No. $ _________
JCAC, Inc., a Florida corporation (hereinafter called the "Company"
which term includes any successors under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______, or registered assigns,
the principal sum of _____ Dollars, on June 15, 2006.
Interest Payment Dates: June 15 and December 15; commencing
December 15, 1996.
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
duly executed [under its corporate seal].
Dated:
JCAC, Inc.
a Florida corporation
[Seal]
By:
-------------------------------------
Name:
Title:
Attest:
---------------
Secretary
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FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned
Indenture.
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION
as Trustee and
Authenticating Agent
By:
--------------------------
Authorized Signatory
A-2
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JCAC, INC.
10 1/8 % SENIOR SUBORDINATED NOTE
DUE 2006
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the Company or their agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co. , has an interest herein.1
1. INTEREST.
JCAC, Inc., a Florida corporation (hereinafter called the "Company,"
which term includes any successors under the Indenture hereinafter referred to),
promises to pay interest on the principal amount of this Security at the rate of
10 1/8% per annum from the date of issuance until maturity. To the extent it is
lawful, the Company promises to pay interest on any interest payment due but
unpaid on such principal amount at a rate of 10 1/8% per annum compounded
semi-annually.
The Company will pay interest semi-annually on June 15 and December
15 of each year or, if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"), commencing December
15, 1996. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no inter-
- -------------------
1 This paragraph should only be added if the Security is issued in global
form.
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est has been paid on the Securities, from the date of issuance. Interest will
be computed on the basis of a 360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on June 1 and December 1 immediately preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Except as provided below, the Company shall pay principal and
interest in such coin or currency of the United States of America as at the time
of payment shall be legal tender for payment of public and private debts
("Cash"). The Securities will be payable as to principal, premium and interest
at the office or agency of the Company maintained for such purpose within or
without the City and State of New York or, at the option of the Company, payment
of principal, premium and interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest and premium on all Global Securities and all other
Securities the Holders of which shall have provided written wire transfer
instructions to the Company or the Paying Agent at least five days prior to the
date for payment.
3. PAYING AGENT AND REGISTRAR.
Initially, First Trust of Illinois, National Association will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Paying Agent, Registrar
or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
June 12, 1996 (the "Indenture"), among the Company, Jacor Communications, Inc.,
an Ohio corporation (the "Initial Guarantor") and First Trust of Illinois,
National Association (the "Trustee" which term includes any successor Trustee
under the Indenture). Capitalized terms herein are used as defined in the
Indenture unless otherwise
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defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior
subordinated obligations of the Company limited in aggregate principal amount to
$100,000,000. The Securities are, to the extent and in the manner provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Debt of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose. The Securities are guaranteed on a senior
subordinated basis by the Initial Guarantor and each of the Company's future
Subsidiaries (the "Guarantors").
5. REDEMPTION.
The Securities may be redeemed, in whole or in part, at any time on
or after June 15, 2001, at the option of the Company, at the Redemption Price
(expressed as a percentage of principal amount) set forth below with respect to
the indicated Redemption Date, in each case (subject to the right of Holders of
record on a Record Date that is on or prior to such Redemption Date to receive
interest due on the Interest Payment Date to which such Record Date relates),
plus any accrued but unpaid interest to the Redemption Date. The Securities may
not be so redeemed prior to June 15, 2001.
If redeemed during
the 12-month period
commencing Redemption Price
------------------- ----------------------
2001 . . . . . . . . . 105.063%
2002 . . . . . . . . . 103.375%
2003 . . . . . . . . . 101.688%
2004 and thereafter. . 100.000%
Any such redemption will comply with Article III of the Indenture.
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Notwithstanding the foregoing, in the event that the Merger has not
become effective prior to March 15, 1997, the Company may redeem the Securities
at a redemption price equal to 102% of the principal amount thereof, in each
case plus accrued and unpaid interest, if any, to the redemption date;
PROVIDED that such redemption, if made, must occur within 35 days of March 15,
1997.
6. NOTICE OF REDEMPTION.
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date and payment of
the Securities called for redemption is not otherwise prohibited, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
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9. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at their written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, Cash, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
Securities to redemption or maturity and comply with the other provisions of the
Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Securities (including the restrictive
covenants described in paragraph 12 below, but excluding their obligation to pay
the principal of and interest on the Securities). Upon satisfaction of certain
additional conditions set forth in the Indenture, the Company may elect to have
its obligations discharged with respect to outstanding Securities.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. An amendment, supplement or waiver
with respect to Section 11.1 (Change of Control Offer) or Section 11.2
(Citicasters Offer) in a manner adverse to the Holders, requires not less than
75% of the aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may under
certain circumstances amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, defect or inconsistency, or make
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any other change that does not adversely affect the rights of any Holder of a
Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and the Guarantors to, among other things, incur additional Indebtedness
and Disqualified Equity Interests, pay dividends or make certain other
restricted payments, enter into certain transactions with Affiliates, incur
Liens, sell assets, merge or consolidate with any other Person or transfer (by
lease, assignment or otherwise) substantially all of the properties and assets
of the Company. The limitations are subject to a number of important
qualifications and exceptions. The Company must periodically report to the
Trustee on compliance with such limitations.
13. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to offer to purchase on the Change of Control Purchase Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
together with accrued interest to the Change of Control Purchase Date. Holders
of Securities will receive a Change of Control Offer from the Company prior to
any related Change of Control Purchase Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(b) If there is a failure to consummate the Merger, the Company
shall be required to offer to purchase on the Citicasters Purchase Date all
outstanding Securities at a purchase price equal to 101% of the principal amount
thereof, together with accrued interest to the Citicasters Purchase Date.
Holders of Securities will receive a Citicasters Offer from the Company prior to
any related Citicasters Purchase Date and may elect to have such Securities
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
(c) The Indenture imposes certain limitations on the ability of the
Company, the Guarantors or any of their respective Subsidiaries to sell assets.
In the event the proceeds from a permitted Asset Sale exceed certain amounts, as
specified in the Indenture, the Company will be required
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<PAGE>
to use the proceeds of such Asset Sale in the manner required by the Indenture,
including (i) to reinvest such proceeds in its business, (ii) to repay Senior
Debt, (iii) to make an offer to purchase the Citicasters Securities, or (iv) to
make an offer to purchase a certain amount of each Holder's Securities at 100%
of the principal amount thereof, plus accrued interest, if any, to the purchase
date.
14. NOTATION OF GUARANTY.
As set forth more fully in the Indenture, the Persons constituting
Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 12.1 of the Indenture, to the Holder and to the Trustee and its
successors and assigns, that (i) the principal of and interest on the Security
will be paid, whether at the Maturity Date or Interest Payment Dates, by
acceleration, call for redemption upon a Change of Control Offer, upon a
Citicasters Offer, upon an Asset Sale Offer or otherwise, and all other
obligations of the Company to the Holder or the Trustee under the Indenture or
this Security will be promptly paid in full or performed, all in accordance with
the terms of the Indenture and this Security, and (ii) in the case of any
extension of payment or renewal of this Security or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of such extension or renewal, whether at the Maturity Date, as so
extended, by acceleration, call for redemption, upon a Change of Control Offer,
upon a Citicasters Offer, upon an Asset Sale Offer or otherwise. Such
guarantees shall cease to apply, and shall be null and void, with respect to any
Guarantor who, pursuant to Article XII of the Indenture, is released from its
guarantees, or whose guarantees otherwise cease to be applicable pursuant to the
terms of the Indenture.
15. SUCCESSORS.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing (other than an Event
of Default relating to certain events
A-9
<PAGE>
of bankruptcy, insolvency or reorganization), then in every such case, unless
the principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of 25% in aggregate principal amount
of Securities then outstanding may declare all the Securities to be due and
payable immediately in the manner and with the effect provided in the Indenture.
Holders of Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of any
continuing Default or Event of Default (except a Default in payment of principal
or interest), if it determines that withholding notice is in their interest.
17. TRUSTEE OR AGENT DEALINGS WITH THE COMPANY.
The Trustee and each Agent under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates as if it were not the Trustee and such Agent.
18. NO RECOURSE AGAINST OTHERS.
No direct or indirect stockholder, partner, employee, officer or
director, as such, past, present or future, of the Company, the Guarantors or
any successor entity shall have any personal liability in respect of the
obligations of the Company or the Guarantors under the Securities or the
Indenture by reason of his or its status as such stockholder, partner, employee,
officer or director. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
A-10
<PAGE>
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. ADDITIONAL RIGHTS OF HOLDERS OF SECURITIES.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
JCAC, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: Corporate Secretary
A-11
<PAGE>
FORM OF ASSIGNMENT
I or we assign this Security to
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of
assignee
- -------------------------
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: Signed:
---------- ------------------------------
- -------------------------------------------------------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guaranty*
- ------------------
* NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs: (I)
the Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MNSP); (iii) the Stock Exchange Medallion
Program (SEMP) or (iv) in such other guarantee program acceptable to be
Trustee.
A-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article XI of the Indenture, check the
appropriate box: / / Section 4.14 / /Section 11.1 / /Section 11.2
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Article XI of the Indenture, as the case
may be, state the amount you want to be purchased: $________
Date: ________________ Signature: ________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guaranty**
- ------------------
** NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs: (I)
the Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MNSP); (iii) the Stock Exchange Medallion
Program (SEMP) or (iv) in such other guarantee program acceptable to be
Trustee.
A-13
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES***
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer of
Principal Amount Principal Amount Security following Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------------
*** This schedule should only be added if the Security is issued in global
form.
A-14
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES
Re: % SENIOR SUBORDINATED NOTES DUE 2006 OF JCAC, INC.
This Certificate relates to $______ principal amount of Securities held in
(check applicable box) _____ book-entry or ______ definitive form by _____ (the
"Transferor").
The Transferor (check applicable box):
/ / has requested the Registrar by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
/ / has requested the Registrar by written order to exchange or
register the transfer of a Security or Securities.
--------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------------
Date:
------------------------
A-15
<PAGE>
Annex I
SELECTED DEFINITIONS AND SECTIONS
FROM THE CITICASTERS INDENTURE
"AFFILIATE" means, with respect to any specified Person, and other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") of any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"APPLICABLE DOCUMENTS" means collectively the Purchase Agreement,
the Registration Rights Agreement, this Indenture and the Citicasters
Securities.
"APPLICABLE PREMIUM" means, with respect to any Note called for
redemption by Citicasters after a Change of Control, the greater of (i) 1.0% of
the then outstanding principal amount of such Note, and (ii) the total, if
greater than zero, of (A) the present value of all required interest and
principal payments due on such Note, computed using a discount rate equal to the
Treasury Rate plus 75 basis points, minus (B) the then outstanding principal
amount of such Note, minus (C) any accrued and unpaid interest paid on such Note
on the Redemption Date.
"ASSET SALE" by any Person means any transfer, conveyance, sale,
lease or other disposition by such Person or any of its Subsidiaries (including
a consolidation or merger or other sale of any such Subsidiaries with, into or
to another Person in a transaction in which such Subsidiary ceases to be a
Subsidiary, but excluding a disposition by a Subsidiary of such Person to such
Person or a Wholly-Owned Subsidiary of such Person) of (i) shares of Capital
Stock (other than directors' qualifying shares) or other ownership interests of
a Subsidiary of such Person, (ii) substantially all of the assets of such Person
or any of its Subsidiaries or (iii) other assets or rights of such Person or any
of its Subsidiaries, whether owned on the date of this Indenture or thereafter
acquired, in one or more related transactions. The term "Asset Sale" shall not
include (i) any Permitted
Annex - 1
<PAGE>
Disposition or (ii) any sale or issuance by Citicasters of Qualified Capital
Stock of Citicasters.
"BANK AGENT CONSENT" means, with respect to any Asset Sale Payment
(as defined in the Citicasters Securities Asset Sale Offer), the written consent
of the Representative or Representatives of holders of at least a majority in
outstanding principal amount of Indebtedness under the Bank Credit Agreements
(including unused commitments which, if funded, would constitute Senior Bank
Debt) delivered by such Representative or Representatives to Citicasters, with a
copy to the Trustee, prior to such Asset Sale Payment, pursuant to which such
Representative or Representatives consent to such Asset Sale Payment and,
consequently, the related permanent reduction (in the amount of such Asset Sale
Payment) of the amount of Designated Senior Debt available to be Incurred
pursuant to Section 4.7(c)(i). As of the Issue Date, The First National Bank of
Boston would be the Representative entitled to give the Bank Agent Consent.
"BANK CREDIT AGREEMENTS" means (i) the Loan Agreement, dated as of
August 20, 1993, and amended and restated as of November 30, 1993, among the
Company, Citicasters Co. (formerly known as Great American Broadcasting
Company), Continental Bank, N.A., and The First National Bank of Boston, as
managing agents, and the lenders party thereto (such Loan Agreement shall be
referred to herein as the "1993 Credit Agreement"), (ii) the loan documents
relating to a $25,000,000 Senior Secured Seven-Year Revolving Credit and a
$125,000,000 Senior Secured Seven-Year Reducing Revolver under which Citicasters
Co. is the borrower, Citicasters Corp. and the Company are Guarantors, The First
National Bank of Boston is the Administrative Agent and Continental Bank, N.A.
is the Collateral Agent (such facilities shall be referred to herein as the "New
Bank Credit Facility"), (iii) each instrument pursuant to which Obligations
under the Bank Credit Agreements described in (i) and (ii) above, or any
subsequent Bank Credit Agreements, are amended, deferred, extended, renewed,
replaced, refunded or refinanced, in whole or in part, and (iv) each instrument
now or hereafter evidencing, governing, guarantying or securing any Indebtedness
under any Bank Credit Agreements, in each case, as modified, amended, restated
or supplemented from time to time.
Annex - 2
<PAGE>
"BANKRUPTCY LAW" means Title 11, United States Code or any similar
Federal or State law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board
of Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"BROADCASTING STATION" means all related licenses, franchises and
permits issued under federal, state or local laws from time to time which
authorize a Person to receive or distribute, or both, over the airwaves, audio,
visual, or microwave signals within a geographic area for the purpose of
providing commercial broadcasting television or radio, together with all
Property owned or used in connection with the programming PROVIDED pursuant
to, and all interest of such Person to receive revenues from any other Person
which derives revenues from or pursuant to, said licenses, franchises and
permits.
"CAPITAL EXPENDITURE" means any amount paid in connection with the
purchase or construction of any assets acquired (other than from an Affiliate)
or constructed after the date hereof (a) to the extent the purchase or
construction prices for such assets are or should be included in "addition to
property, plant or equipment" in accordance with GAAP and (b) if the acquisition
or construction of such assets is not part of any acquisition of a Person.
"CAPITAL LEASE OBLIGATION" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Indebtedness
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
GAAP. The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. Capital Lease Obligations shall not include payments due under any
Film Contracts.
Annex - 3
<PAGE>
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights, participations, each class of common stock and preferred stock of such
Person and/or other equivalents (however designated) of corporate stock or
equity participations, including each class of common stock and preferred stock
of such Person and partnership interests, whether general or limited, of such
Person.
.
"CASH EQUIVALENTS" means:
(1) marketable obligations issued or
unconditionally guaranteed by the United States government, in each
case maturing within 360 days after the date of acquisition thereof;
(2) marketable direct obligations issued by any
state of the United States or any political subdivision of any such
state or any public instrumentality thereof maturing within 360 days
after the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc.;
(3) commercial paper maturing no more than 360
days after the date of acquisition thereof, issued by a corporation
organized under the laws of any state of the United States or of the
District of Columbia and, at the time of acquisition, having a
rating in one of the two highest rating categories obtainable from
either Standard & Poor's Corporation or Moody's Investors Service,
Inc.;
(4) money market funds whose investments are
made solely in securities described in clause (1) maturing within
one (1) year after the date of acquisition thereof;
(5) certificates of deposit maturing within 360
days after the date of acquisition thereof, issued by any commercial
bank that is a member of the Federal Reserve System that has
capital, surplus and undivided profits (as shown on its most recent
statement of condition) aggregating not less than $100,000,000 and
Annex - 4
<PAGE>
is rated A or better by Moody's Investors Service, Inc. or Standard
& Poor's Corporation; and
(6) repurchase agreements entered into with any
commercial bank of the nature referred to in clause (5), secured by
a fully perfected Lien in any obligation of the type described in
any of clauses (1) through (5), having a fair market value at the
time such repurchase agreement is entered into of not less than 100%
of the repurchase obligation thereunder of such commercial bank.
"CITICASTERS ASSET SALE REPURCHASE AMOUNT" means the sum of (A)
Cumulative Operating Cash Flow (as defined herein) of Citicasters and its
Subsidiaries less 1.4 times Cumulative Total Interest Expense of Citicasters and
its Subsidiaries, plus (B) an amount equal to 100% of the aggregate Qualified
Capital Stock Proceeds received by Citicasters from the issuance and sale (other
than to a Subsidiary of Citicasters) of Qualified Capital Stock to the extent
that such proceeds are not used to redeem, repurchase, return or otherwise
acquire Capital Stock or any Indebtedness of Citicasters or any Subsidiary
pursuant to clause (ii) of the immediately following paragraph and (C)
$5,000,000, less the aggregate amount of all Restricted Payments (excluding all
payments, investments, redemptions, repurchase, retirements and other
acquisitions described in clause (ii) of the immediately following paragraph)
declared or made after February 18, 1994.
Notwithstanding the foregoing definition, the following Restricted
Payments may be made: (i) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture; (ii) the redemption,
repurchase, retirement or other acquisition for value of any Capital Stock or
any Indebtedness of Citicasters or any Subsidiary in exchange for, or out of the
Qualified Capital Stock Proceeds of, the substantially concurrent sale (other
than to Citicasters or a Subsidiary of Citicasters) of Qualified Capital Stock
of Citicasters; and (iii) the redemption of Citicasters Securities under the
circumstances PROVIDED in Article 3 and in Sections 11.2 and 4.14 of this
Indenture.
Annex - 5
<PAGE>
"CITICASTERS SECURITIES ASSET SALE OFFER" means an offer to
purchase the Citicasters Securities in accordance with the following procedures:
(a) Citicasters will not, and will not permit any of its
Subsidiaries to make any Asset Sale, whether in a single transaction or a series
of related transactions, unless: (i) Citicasters or the applicable Subsidiary
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the Property or securities sold or otherwise disposed of (as
determined in good faith by the Board of Directors of Citicasters evidenced by a
Board Resolution); (ii) at least 75% of such consideration is in the form of
cash; PROVIDED, HOWEVER, that the following shall be deemed to be cash for
purposes of this definition: (A) the amount of any liabilities (as shown on
Citicasters' or such Subsidiary's most recent balance sheet or in the notes
thereto) of Citicasters or such Subsidiary (other than liabilities that are by
their terms subordinated to the Citicasters Securities) that are assumed by the
transferee of any such assets, and (B) any notes or other obligations received
by Citicasters or any such Subsidiary from a transferee that are converted by
Citicasters or such Subsidiary into cash within six months of such Asset Sale;
PROVIDED FURTHER, that the 75% limitation referred to in clause (ii) above
shall not apply (AA) to any sale, transfer or other disposition of assets
constituting one or more Broadcasting Stations in which the cash portion of such
consideration received therefor, determined in accordance with the foregoing
proviso, is equal to or greater than what the after-tax net proceeds would have
been had such transaction complied with the aforementioned 75% limitation or
(BB) to a so-called "like-kind" exchange of assets, so long as (1) the assets so
received consist principally of cash or Cash Equivalents, the assumption of
liabilities and the acquisition of assets to be used for or in connection with
the business of owning and operating Broadcasting Stations, and (2) at the time
of and after giving effect to such exchange, and treating any Indebtedness
Incurred as a result of such exchange as having been Incurred at the time of
such exchange, no Default or Event of Default shall have occurred and be
continuing and Citicasters could Incur at least $1.00 of additional Indebtedness
pursuant to Section 4.7(b); PROVIDED YET FURTHER that the 75% limitation
referred to in clause (ii) above shall be deemed to have been satisfied if (AAA)
at the date of the Asset Sale and after giving effect thereto, Sec-
Annex - 6
<PAGE>
tion 4.5(a) would permit Citicasters to make a Restricted Payment in an
amount equal to the difference between the actual cash consideration received
by Citicasters or the applicable Subsidiary with respect to such Asset Sale and
75% of the fair market value of the Property or securities sold or otherwise
disposed of in such Asset Sale (determined as provided above) and (BBB)
Citicasters treats the receipt of non-cash consideration in an amount equal to
the amount set forth in the foregoing clause (AAA) as a Restricted Payment
under Section 4.5(a), whether or not such receipt would otherwise be classified
as an Investment or a Permitted Investment; and (iii) the Excess Proceeds
received by Citicasters or such Subsidiary, as the case may be, from such Asset
Sale are applied in accordance with this definition.
(b) The Company shall use the Excess Proceeds from New World
Station Sales (i) first to repay amounts outstanding under the 1993 Credit
Agreement that is a part of the Bank Credit Agreements and the WGHP Notes and
(ii) then to redeem $75,000,000 principal amount of Notes at a redemption price
of $976.75 per $1,000 principal amount, plus accrued and unpaid interest through
the date of redemption. The mandatory redemption of Notes described in the
foregoing clause (ii) shall be made in accordance with the applicable provisions
of Article 3 hereof and the Redemption Date with respect to the full $75,000,000
principal amount of Notes to be redeemed shall be no later than the 15th day
after the date on which an aggregate of $230,000,000 of Excess Proceeds
(calculated for purposes of this Section 4.13(b) without regard to the deduction
described in clause (iv) of the definition of "Excess Proceeds") from the New
World Station Sales have been received by the Company, it being understood that
the Company may Incur Indebtedness under the New Bank Credit Facility in an
amount up to $75,000,000 to fund such redemption so long as the total amount of
Designated Senior Debt outstanding after giving effect to such redemption and
any related transactions does not exceed $150,000,000. Following the
application of the New World Station Sale Excess Proceeds as set forth above,
any additional Excess Proceeds from any New World Station Sale may be used to
further reduce Senior Indebtedness, to make Related Business Investment or
Capital Expenditures on one or more of the Company's or its Subsidiaries'
Broadcasting Stations, to acquire one or more Broadcasting Stations or to make a
Television Station Sale Payment as permitted by Section 4.13(d). The Company
shall use the Excess Proceeds
Annex - 7
<PAGE>
from the Other Television Station Sales to reduce Designated Senior Debt, either
permanently or temporarily to make Related Business Investments or Capital
Expenditures on one or more of the Company's or its Subsidiaries' Broadcasting
Stations, to acquire one or more Broadcasting Stations or, to make a Television
Station Sale Payment as permitted by paragraph (d) hereof.
(c) Immediately following receipt by the Company of Excess
Proceeds from an Asset Sale, other than a Permitted Television Station Sale, the
Company may use such Excess Proceeds to temporarily reduce Designated Senior
Debt. Within 360 days following the Company's receipt of such Excess Proceeds,
such Excess Proceeds may (i) be applied to permanently reduce Designated Senior
Debt, (ii) be used to enter into a contract to make Related Business Investments
or Capital Expenditures on one or more of the Company's or its Subsidiaries'
Broadcasting Stations or to enter into a contract to acquire one or more
Broadcasting Stations, or (iii) be used to make a payment permitted by Section
4.13(e), which payment shall be counted as a permanent reduction of the amount
of Designated Senior Debt available to be Incurred pursuant to Section
4.7(c)(i). Any Excess Proceeds from an Asset Sale not applied or invested
within 360 days as provided in clauses (i), (ii) or (iii) hereof will be deemed
to constitute "Available Proceeds" and shall be applied as provided in paragraph
(f) hereof unless the Company gives notice to the Trustee within 10 days
following such 360 day period that Excess Proceeds previously used to
temporarily reduce Designated Senior Debt will be applied to permanently reduce
Designated Senior Debt in which case such Excess Proceeds shall not constitute
Available Proceeds.
(d) The Company may use up to $40,000,000 of the Excess
Proceeds from the New World Station Sales, following application of such Excess
Proceeds as set forth in paragraph (b) hereof, and up to the lesser of 25% of
Excess Proceeds or $40,000,000 from any Other Television Station Sale to pay
dividends on the Company's Capital Stock or redeem, repurchase or retire shares
of the Company's Capital Stock or warrants, rights or options to purchase or
acquire shares of the Company's Capital Stock (any such dividend, redemption,
repurchase or retirement out of Excess Proceeds from any Permitted Television
Station Sales is herein referred to as a "Television Station Sale Payment"),
subject to the conditions and limitations set forth in this para-
Annex - 8
<PAGE>
graph (d). A Television Station Sale Payment may be made by the Company
only if, and to the extent that, each of the following conditions is satisfied
as of the time of the proposed Television Station Sale Payment: (i) the Company
shall have obtained a Bank Agent Consent if required; and (ii) no Default or
Event of Default shall have occurred and be continuing at the time of such sale
or as a consequence of such Television Station Sale Payment.
(e) Citicasters may use a portion of the Excess Proceeds from
an Asset Sale which is not a Permitted Television Sale to pay dividends on its
Capital Stock or redeem, repurchase or retire shares of its Capital Stock or
warrants, rights or options to purchase or acquire shares of its Capital Stock
(any such dividend, redemption, repurchase or retirement out of Excess Proceeds
from a single Asset Sale an "Asset Sale Payment"), subject to the conditions and
limitations set forth in this paragraph (c). An Asset Sale Payment may be made
by Citicasters only if, and to the extent that, each of the following conditions
is satisfied as of the time of the proposed Asset Sale Payment (the
"Determination Time"): (i) Citicasters shall have obtained a Bank Agent Consent;
(ii) such Asset Sale Payment (as well as all prior Asset Sale Payments, if any)
shall be counted as a permanent reduction of the amount of Designated Senior
Debt available to be Incurred pursuant to Section 4.7(c)(i); (iii) the
Determination Time occurs on or prior to December 31, 1996; (iv) only two Asset
Sale Payments will be permitted under this definition; (v) no Default or Event
of Default shall have occurred and be continuing at the Determination Time or as
a consequence of such Asset Sale Payment; and (vi) after giving effect to (A)
the application of any Excess Proceeds from the applicable Asset Sale in
accordance with clauses (i) and (ii) of paragraph (c) above prior to the
Determination Time, (B) any Asset Sale Redemption of Citicasters Securities
pursuant to Section 3.7(c) out of any Excess Proceeds from the applicable Asset
Sale, (C) any Asset Sale Payment out of any Excess Proceeds from the applicable
Asset Sale and (D) the payment of the maximum amount of Television Station Sale
payments which Citicasters may make pursuant to paragraph (d) hereof regardless
of whether any Permitted Television Station Sales have in fact been made as of
the Determination Time, the ratio set forth below is equal to (but not more or
less than) 4.5:1.
Annex - 9
<PAGE>
D-X
---------------
OCF + [(.065)(REP-X-Y)]
where:
D = the aggregate amount of all outstanding Indebtedness of Citicasters
and its Subsidiaries on a consolidated basis as of the Determination
Time, without giving effect to the Asset Sale Redemption (if any)
represented by "X" in the formula.
X = the principal amount of Citicasters Securities (if any) to be
redeemed in an Asset Sale Redemption pursuant to Section 3.7(c) out
of Excess Proceeds from the applicable Asset Sale in order to
satisfy the conditions set forth in this paragraph (c).
OCF = the Operating Cash Flow of Citicasters and its Subsidiaries on a
consolidated basis for the four most recent full fiscal quarters
ending immediately prior to the Determination Time, determined on a
pro forma basis after giving effect to (i) the applicable Asset Sale
and any other Asset Sales consummated during such four-quarter
period as if they had occurred at the beginning of such four-quarter
period and (ii) all acquisitions or other dispositions (whether by
merger, consolidation, purchase or sale of securities or assets or
otherwise) of any business or assets, made by Citicasters and its
Subsidiaries from the beginning of such four-quarter period through
the Determination Time as if such acquisition or disposition had
occurred at the beginning of such four-quarter period.
REP = the total amount of Excess Proceeds from the applicable Asset Sale
remaining after deducting therefrom all portions thereof applied
prior to the Determination Time pursuant to this definition, but
without giving effect to the Asset Sale Redemption (if any)
represented by "X" in the formula or to the Asset Sale Payment
represented by "Y" in the formula.
Y = the amount of the proposed Asset Sale Payment to be made at the
Determination Time pursuant to this paragraph (d).
Annex - 10
<PAGE>
(f) As soon as practicable, but in no event later than 10
Business Days after any date (an "Asset Sale Trigger Date") that the aggregate
amount of Available Proceeds exceeds $15,000,000, Citicasters shall, if and to
the extent permitted by the agreements governing any Senior Indebtedness of
Citicasters, subject to the provisions of Article 10, commence an offer to
purchase the maximum principal amount of Citicasters Securities that may be
purchased out of such Available Proceeds, at an offer price in cash equal to
100% of the principal amount thereof, plus accrued and unpaid interest to the
date of purchase. The Asset Sale Offer shall be effected in accordance with
Section 3.8 and Article 3 (to the extent applicable) and the provisions of this
definition. To the extent that any Available Proceeds remain after completion
of an Asset Sale Offer, Citicasters may use the remaining amount for any purpose
permitted by this Indenture, but not, unless otherwise permitted by Section 4.5,
to offer to repurchase or otherwise redeem, repurchase, retire or acquire for
value any Pari Passu Indebtedness or Subordinated Indebtedness. In the event
that Citicasters is prohibited under the terms of any agreement governing
outstanding Senior Indebtedness of Citicasters from repurchasing Citicasters
Securities with Available Proceeds pursuant to an Asset Sale Offer as required
by the first sentence of this paragraph (d), Citicasters shall promptly use all
Available Proceeds to permanently reduce outstanding Senior Indebtedness of
Citicasters.
(g) If, at any time, any funds are received by or for the
account of Citicasters or any of its Subsidiaries upon the sale, conversion,
collection or other liquidation of any non-cash consideration received in
respect of an Asset Sale, other than the Permitted Television Station Sales such
funds shall, when received, constitute Excess Proceeds and shall, within 360
days after the receipt of such funds be applied as provided in this definition.
"CUMULATIVE OPERATING CASH FLOW" means the Operating Cash Flow of
Citicasters and its Subsidiaries for the period beginning January 1, 1994,
through and including the end of the most recently ended fiscal quarter (taken
as one accounting period) preceding the date of any proposed Restricted Payment.
"CUMULATIVE TOTAL INTEREST EXPENSE" means the Total Interest
Expense of Citicasters and its Subsidiaries
Annex - 11
<PAGE>
for the period beginning January 1, 1994, through and including the end of the
most recently ended fiscal quarter (taken as one accounting period) preceding
the date of any proposed Restricted Payment.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DESIGNATED SENIOR DEBT" means: (a) up to an aggregate maximum of
$150,000,000 principal amount of any combination of (i) Indebtedness outstanding
under the Bank Credit Agreements and (ii) Senior Indebtedness (without
duplication with clause (i) above), outstanding at any one time; provided,
however, that such maximum amount shall be decreased by (A) the aggregate amount
of Asset Sale Payments made by the Company, PROVIDED that a reduction
described in this clause (a) that would otherwise be caused by a particular
Asset Sale Payment will not be effective without a Bank Agent Consent with
respect to such Asset Sale Payment if the effect of such reduction would be to
reduce the amount of Designated Senior Debt available to be Incurred pursuant to
Section 4.7(c)(i) to an amount lower than the amount of Indebtedness outstanding
under the Bank Credit Agreements as of the applicable Determination Time
(including unused commitments which the Bank Lenders are unconditionally
obligated to fund at the Determination Time and which, if funded, would
constitute Designated Senior Debt) and (B) the aggregate amount of Excess
Proceeds from Asset Sales applied to permanently reduce Designated Senior Debt
pursuant to paragraphs (b) and (c) under the Citicasters Securities Asset Sale
Offer; and (b) any interest, penalties, fees, indemnifications, reimbursements,
damages and other similar charges (including, but not limited to, all fees and
expenses of counsel and all other charges, fees and expenses) payable under the
Bank Credit Agreements.
"EXCESS PROCEEDS" means with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash (including any cash received by
way of deferred payment pursuant to, or amortization of, a note or installment
receivable or otherwise, but only if, as and when received, and cash received
upon sale of securities or other Property or assets received as consideration
with respect to such Asset Sale, except to the extent that any of the foregoing
are financed or sold with recourse to Citicasters or any Subsidiary) net of (i)
brokerage commissions and other
Annex - 12
<PAGE>
reasonable fees and expenses (including fees and expenses of counsel and
investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) payments made to retire Senior
Indebtedness where such payments are required by the instrument governing such
Indebtedness, (iv) amounts required to be paid to any Person (other than
Citicasters or any Subsidiary) owning a beneficial interest in the Property or
assets the subject of such Asset Sale and (v) appropriate amounts to be provided
by Citicasters or any Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by Citicasters or any Subsidiary, as the case may be, after such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as reflected in an Officers' Certificate delivered to the Trustee.
"INVESTMENT" by any Person in any other Person means any
investment by such Person in such other Person, whether by a purchase of assets,
in any transaction or series of related transactions, individually or in the
aggregate, purchase of Capital Stock, capital contribution, loan, advance (other
than reasonable loans and advances to employees for moving and travel expenses,
as salary advances, and other similar customary expenses incurred, in each case
in the ordinary course of business consistent with past practice) or similar
credit extension constituting Indebtedness of such other Person, and any
Guarantee of Indebtedness of such other Person.
"NEW WORLD STATION SALE" means Asset Sales involving the sale of
four television stations currently owned by Citicasters or its Subsidiaries
located in Phoenix, Arizona, Birmingham, Alabama, Kansas City, Missouri and
Greensboro/High Point, North Carolina pursuant to the terms of that certain
Asset Purchase Agreement dated as of May 4, 1994 between Citicasters Co.
(formerly known as Great American Television and Radio Company, Inc.) and New
World Communications Group Incorporated as the same is in effect on August 22,
1994 or as the same may be amended or modified; provided that such amendment or
modification does not decrease the consideration payable to the Company or have
materially adverse effect on the Holders.
Annex - 13
<PAGE>
"OTHER TELEVISION STATION SALES" means Asset Sales Involving the
sale at any time and from time to time of two television stations owned by the
Company or its Subsidiaries in Tampa, Florida and Cincinnati, Ohio.
"PARI PASSU INDEBTEDNESS" means any Indebtedness of Citicasters
whether outstanding at the Issue Date or Incurred thereafter, which (a) ranks
pari passu with the Citicasters Securities and (b) by its terms, or by the terms
of any agreement or instrument pursuant to which such Indebtedness is Incurred,
(i) does not provide for payments of principal of such Indebtedness at the final
stated maturity thereof or by way of a sinking fund applicable thereto or by way
of any mandatory redemption, retirement or repurchase thereof by Citicasters
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by virtue of
acceleration of such Indebtedness upon an event of default thereunder), in each
case prior to the final stated maturity of the Citicasters Securities and (ii)
does not permit redemption or other retirement (including pursuant to an offer
to purchase made by the issuer) of such other Indebtedness at the option of the
holder thereof prior to the final stated maturity of the Citicasters Securities,
other than a redemption or other retirement at the option of the holder of such
Indebtedness (including pursuant to an offer to purchase made by the Issuer)
which is conditioned upon the change of control of Citicasters pursuant to
provisions substantially similar to those contained in Section 11.1 of this
Indenture.
"PERMITTED INVESTMENT" by any Person means (i) any Related
Business Investment, (ii) Investments in securities or other Property not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale, to the extent permitted by the definition of Citicasters Securities Asset
Sale Offer, or any other disposition of assets not constituting an Asset Sale,
(iii) cash and Cash Equivalents, (iv) Investments existing on the Issue Date,
(v) Investments by any Subsidiary in other Subsidiaries, (vi) Investments by
Citicasters in any of its Subsidiaries required by any instrument or agreement
governing Senior Indebtedness to the extent that such Investments consist of (A)
performance under Guarantees Incurred by Citicasters in compliance with this
Indenture with respect to Indebtedness of its Subsidiaries not Incurred in
violation of this Indenture or (B) Liens securing Citicasters's Obligations with
respect to
Annex - 14
<PAGE>
any Guarantee described in the foregoing clause (A), (vii) Investments in the
form of accounts receivable arising from sales of goods or services in the
ordinary course of business, PROVIDED that for any accounts receivable that
are more than 120 days overdue, appropriate reserves or allowances have been
established in accordance with GAAP and (viii) Investments in the form of
advances or prepayments to suppliers or employees in the ordinary course of
business.
"PERMITTED TELEVISION STATION SALES" means the New World Station
Sales and the Other Television Station Sale.
"PROPERTY" means all types of real, personal, tangible, intangible
or mixed property.
"RELATED BUSINESS INVESTMENTS" means (i) any Investment by a
Person in any other Person substantially all of whose revenues are derived from
the operation of one or more Broadcasting Stations or from the sale of
advertising time or the delivery, transmission or dissemination of entertainment
or information to public viewers or subscribers, so long that, as a result of
such Investment, (A) such Person becomes a Wholly-Owned Subsidiary, or (B) such
Person either (1) is merged, consolidated or amalgamated with or into
Citicasters or one of its Wholly-Owned Subsidiaries and Citicasters or such
Wholly-Owned Subsidiary is the surviving Person, or (2) transfers or conveys
substantially all of its assets to, or is liquidated into, Citicasters or one of
its Wholly-Owned Subsidiaries; (ii) the acquisition of all or substantially all
the assets of any Broadcasting Station; and (iii) any Capital Expenditure or
Investment, in each case reasonably related to the business of selling
advertising time or delivering, transmitting or disseminating entertainment or
information to public viewers or subscribers.
"RESTRICTED PAYMENT" means, with respect to any Person, without
duplication: (i) any dividend or other distribution, whether in cash or in
Property or securities, declared or paid on any shares of such Person's Capital
Stock (other than (A) in the case of Citicasters, dividends or distributions
payable solely in shares of Qualified Capital Stock of Citicasters or options,
warrants or other rights to acquire Qualified Capital Stock of Citicasters and
(B) any dividends, distributions or other payments made to Citicasters or a
Wholly-Owned Subsidiary by a Subsidiary), or the making by such Person or any of
its subsidiaries of
Annex - 15
<PAGE>
any other distribution in respect of, such Person's Capital Stock or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock (other than exchangeable or convertible Indebtedness of such
person); (ii) the redemption, repurchase, retirement or other acquisition for
value by such Person or any of its subsidiaries, directly or indirectly, of such
person's Capital Stock (and, in the case of a Subsidiary, Capital Stock of
Citicasters) other than Capital Stock owned by Citicasters or a Wholly-Owned
Subsidiary or any warrants, rights or options to purchase or acquire shares of
any class of such Capital Stock (other than exchangeable or convertible
Indebtedness of such Person), and other than, in the case of Citicasters,
through the issuance in exchange therefor solely of Qualified Capital Stock of
Citicasters; (iii) any payment to purchase, redeem, defease or otherwise acquire
or retire for value any Pari Passu Indebtedness or Subordinated Indebtedness
(other than with the proceeds of Refinancing Indebtedness permitted under this
Indenture), except in accordance with the mandatory redemption or repayment
provisions set forth in the original documentation governing such Indebtedness,
and (iv) any Investment other than Permitted Investments.
"SENIOR INDEBTEDNESS" means and includes all principal of, premium
and interest (including Post-Petition Interest) on and other Obligations with
respect to (i) Indebtedness outstanding under the Bank Credit Agreements and
(ii) any other Indebtedness of Citicasters (other than as otherwise provided in
this definition), whether outstanding on the Issue Date or thereafter Incurred,
other than the Citicasters Securities; PROVIDED, HOWEVER, that the following
shall not constitute Senior Indebtedness: (A) any Indebtedness which by the
terms of the instrument creating or evidencing the same is PARI PASSU,
subordinated or junior in right of payment to the Citicasters Securities in any
respect, (B) that portion of any Indebtedness Incurred in violation of this
Indenture, (C) any Preferred Stock, or (D) any Indebtedness of Citicasters
(other than Indebtedness outstanding under the Bank Credit Agreements which
qualifies as Designated Senior Debt) which is subordinated to or junior in right
of payment in any respect to any other Indebtedness of Citicasters. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall include
the principal of, premium, if any, and interest (including Post-Petition
Interest) and all other Obligations of every nature of Citicasters and its
Subsidiaries from time to time in re-
Annex - 16
<PAGE>
spect of Indebtedness outstanding under the Bank Credit Agreements which
qualifies as Designated Senior Debt; PROVIDED, HOWEVER, that any Indebtedness
under any refinancing, refunding or replacement of the Indebtedness outstanding
under the Bank Credit Agreements shall not constitute Senior Indebtedness to the
extent that the Indebtedness thereunder is by it express terms subordinate to
any other Indebtedness of Citicasters (other than Indebtedness outstanding under
the Bank Credit Agreements). Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (1) Indebtedness evidenced by Citicasters
Securities, (2) Indebtedness which when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to Citicasters, (3) any liability for foreign, federal, state, local or
other taxes owed or owing by Citicasters, (4) Indebtedness of Citicasters to the
extent such liability constitutes Indebtedness to a Subsidiary or any other
Affiliate of Citicasters or any of such Affiliate's subsidiaries, (5)
Indebtedness for the purchase of goods or materials in the ordinary course of
business or (6) Indebtedness owed by Citicasters for compensation to employees
or for services.
"SIGNIFICANT SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person that would be (i) a "significant subsidiary" as
defined in (a) or (b) of the definition of that term in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the Issue Date or (ii) material to the business, condition
(financial or other), business, operations or prospects of Citicasters and its
Subsidiaries taken as a whole.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Citicasters
which is subordinated or junior in right of payment to the Citicasters
Securities.
"SUBSIDIARY" means any corporation, association, partnership,
joint venture or other business entity of which Citicasters and/or any
Subsidiary of Citicasters, directly or indirectly, either (a) in respect of a
corporation, owns or controls more than 50% of the outstanding Capital Stock
having ordinary voting power to elect a majority of the board of directors or
similar managing body, irrespective of whether or not a class or classes shall
or might have voting power by reason of the happening of any contingency, or (b)
in respect of an association, partnership, joint venture
Annex - 17
<PAGE>
or other business entity, exercises sufficient control over and/or has a
sufficiently large interest in, such association, partnership, joint venture or
other business entity that the operations thereof are, in accordance with GAAP,
consolidated with those of Citicasters or any Subsidiary.
"TOTAL INTEREST EXPENSE" of a Person means (i) the total amount of
interest expense (including amortization of original issue discount and noncash
interest payments or accruals and the interest component of any Capital Lease
Obligations but, excluding any intercompany interest owed by any Subsidiary to
any other Subsidiary of such Person), (ii) all fees, commissions, discounts and
other charges of Citicasters and its Subsidiaries with respect to letters of
credit and bankers' acceptances, determined on a consolidated basis in
accordance with GAAP and (iii) the product of (a) the total amount of dividends
declared on Disqualified Capital Stock other than common stock (whether accrued
or paid) of such Person and its consolidated Subsidiaries, times (b) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary 100% of the equity
interests in which (however measured) are owned by Citicasters or a Wholly-Owned
Subsidiary of Citicasters or Citicasters and one or more Wholly-Owned
Subsidiaries of Citicasters taken together, except in any case for the minimum
equity interest required to be held by directors, if any, to satisfy the
requirements of any applicable statute requiring that directors own qualifying
shares.
Annex - 18
<PAGE>
ARTICLE III
REDEMPTIONS AND OFFERS TO PURCHASE
SECTION 3.1. NOTICES TO TRUSTEE.
If Citicasters elects to redeem Citicasters Securities pursuant to
Section 3.7 it shall furnish to the Trustee, at least 10 but not more than 15
days before notice of any redemption is to be mailed to Holders (or such shorter
time as may be satisfactory to the Trustee), an Officers' Certificate stating
that Citicasters has elected to redeem Citicasters Securities pursuant to
Section 3.7, the date notice of redemption is to be mailed to Holders, the
Redemption Date, the aggregate principal amount of Citicasters Securities to be
redeemed, the Redemption Price for such Citicasters Securities, the amount of
accrued and unpaid interest on such Citicasters Securities as of the Redemption
Date and the manner in which Citicasters Securities are to be selected for
redemption if less than all outstanding Citicasters Securities are to be
redeemed. If the Trustee is not the Registrar, Citicasters shall, concurrently
with delivery of its notice to the Trustee of a redemption, cause the Registrar
to deliver to the Trustee a certificate (upon which the Trustee may rely)
setting forth the name of, and the aggregate principal amount of Citicasters
Securities held by each Holder.
If Citicasters is required to offer to purchase Citicasters
Securities pursuant to Section 4.12 or 4.13, it shall furnish to the Trustee, at
least 5 Business Days before notice of the Offer is to be mailed to Holders, an
Officers' Certificate setting forth that the Offer is being made pursuant to
Section 4.12 or 4.13, as the case may be, the Purchase Date, the maximum
principal amount of Citicasters Securities Citicasters is offering to purchase
pursuant to the Offer, the purchase price for such Citicasters Securities, and
the amount of accrued and unpaid interest on such Citicasters Securities as of
the Purchase Date.
Citicasters will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
Annex - 19
<PAGE>
SECTION 3.2. SELECTION OF CITICASTERS SECURITIES TO BE REDEEMED OR
PURCHASED.
If less than all outstanding Citicasters Securities are to be
redeemed or if less than all Citicasters Securities tendered pursuant to an
Offer are to be accepted for payment, Citicasters shall select the outstanding
Citicasters Securities to be redeemed or accepted for payment in compliance with
the requirements of the principal national securities exchange, if any, on which
the Citicasters Securities are listed or, if the Citicasters Securities are not
listed on a securities exchange, on a pro rata basis, by lot or by any other
method that the Trustee deems fair and appropriate; PROVIDED, HOWEVER, that
if any Additional Citicasters Securities are outstanding, such selection shall
be effected in such a manner as to ensure that the ratio of the outstanding
principal amount of the Initial Citicasters Securities and the ratio of the
outstanding principal amount of Additional Citicasters Securities, respectively,
to the sum of the outstanding principal amount of the Initial Citicasters
Securities and Additional Citicasters Securities prior to such selection is
equal to such ratios after such selection. If Citicasters elects to mail notice
of a redemption to Holders, the Trustee shall, at least 5 days prior to the date
notice of redemption is to be mailed, (i) select the Citicasters Securities to
be redeemed from Citicasters Securities outstanding not previously called for
redemption, and (ii) promptly notify Citicasters of the names of each Holder of
Citicasters Securities selected for redemption, the principal amount of
Citicasters Securities held by each such Holder and the principal amount of such
Holder's Citicasters Securities that are to be redeemed. If less than all
Citicasters Securities tendered pursuant to an Offer are to be accepted for
payment, the Trustee shall select on or prior to the Purchase Date for such
Offer the Citicasters Securities to be accepted for payment; PROVIDED,
HOWEVER, that if any Additional Citicasters Securities are outstanding, such
selection shall be effected in such a manner as to ensure that the ratio of the
outstanding principal amount of the Initial Citicasters Securities and the ratio
of the outstanding principal amount of Additional Citicasters Securities,
respectively, to the sum of the outstanding principal amount of the Initial
Citicasters Securities and Additional Citicasters Securities prior to such
selection is equal to such ratios after such selection. The Trustee shall
select for redemption or purchase Citicasters Securities or por-
Annex - 20
<PAGE>
tions of Citicasters Securities in principal amounts of $1,000 or integral
multiples of $1,000; except that if all of the Citicasters Securities of a
Holder are selected for redemption or purchase, the aggregate principal amount
of the Citicasters Securities held by such Holder, even if not a multiple of
$1,000, may be redeemed or purchased. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Citicasters Securities
called for redemption or tendered pursuant to an Offer also apply to portions of
Citicasters Securities called for redemption or tendered pursuant to an Offer.
SECTION 3.3. NOTICE OF REDEMPTION.
(a) At least 30 days but not more than 60 days before any
Redemption Date, Citicasters shall mail by first class mail to each such
Holder's registered address a notice of redemption to each Holder of Citicasters
Securities or portions thereof that are to be redeemed. With respect to any
redemption of Citicasters Securities, the notice shall identify the Citicasters
Securities or portions thereof to be redeemed and shall state: (1) the
Redemption Date; (2) the Redemption Price for the Citicasters Securities and the
amount of unpaid and accrued interest on such Citicasters Securities as of the
date of redemption; (3) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the Redemption
Date, upon surrender of such Note, a new Note or Citicasters Securities in
principal amount equal to the unredeemed portion will be issued; (4) the name
and address of the Paying Agent; (5) that Citicasters Securities called for
redemption must be surrendered to the Paying Agent to collect the Redemption
Price for, and any accrued and unpaid interest on, such Citicasters Securities;
(6) that, unless Citicasters defaults in making such redemption payment,
interest on Citicasters Securities called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders of such
Citicasters Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Citicasters Securities redeemed; and (7) if
fewer than all the Citicasters Securities are to be redeemed, the identification
of the particular Citicasters Securities (or portion thereof) to be redeemed, as
well as the aggregate principal amount of Citicasters Securities to be redeemed
and the aggregate principal amount of Citicasters Securities to be outstanding
after such partial redemption.
Annex - 21
<PAGE>
(b) At Citicasters's request, the Trustee shall (at
Citicasters's expense) give the notice of any redemption to Holders; PROVIDED,
HOWEVER, that Citicasters shall deliver to the Trustee, at least 10 days prior
to the date that notice of the redemption is to be mailed to Holders, an
Officers' Certificate that (i) requests the Trustee to give notice of the
redemption to Holders, (ii) sets forth the information to be provided to Holders
in the notice of redemption, as set forth in the preceding paragraph, and (iii)
sets forth the aggregate principal amount of Citicasters Securities to be
redeemed and the amount of accrued and unpaid interest thereon as of the
redemption date. If the Trustee is not the Registrar, Citicasters shall,
concurrently with any such request, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, the address of, and the aggregate principal amount of Citicasters Securities
held by, each Holder; PROVIDED FURTHER that any such Officers' Certificate
may be delivered to the Trustee on a date later than permitted under this
Section 3.3(b) if such later date is acceptable to the Trustee.
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed to the Holders, Citicasters
Securities called for redemption become due and payable on the Redemption Date
at the Redemption Price. Upon surrender to the Trustee or the Paying Agent, the
Citicasters Securities called for redemption shall be paid at the Redemption
Price.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
(a) On or prior to any Redemption Date, Citicasters shall
deposit with the Paying Agent money sufficient to pay the Redemption Price of,
and accrued interest on, all Citicasters Securities to be redeemed on that date.
After any Redemption Date, the Trustee or the Paying Agent shall promptly return
to Citicasters any money that Citicasters deposited with the Trustee or the
Paying Agent in excess of the amounts necessary to pay the Redemption Price of,
and accrued interest on, all Citicasters Securities to be redeemed.
(b) If Citicasters complies with the preceding paragraph,
unless Citicasters defaults in the payment of such Redemption Price interest on
the Citicasters Securities
Annex - 22
<PAGE>
to be redeemed will cease to accrue on such Citicasters Securities on the
applicable Redemption Date, whether or not such Citicasters Securities are
presented for payment. If a Note is redeemed on or after an interest record date
but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of Citicasters to comply with the preceding paragraph, interest will be
paid on the unpaid principal, premium, if any, and interest from the redemption
date until such principal, premium and interest is paid, at the rate of interest
provided in the Citicasters Securities and Section 4.1.
SECTION 3.6. CITICASTERS SECURITIES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, Citicasters shall issue
and the Trustee shall authenticate for the Holder at Citicasters's expense a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.7. OPTIONAL REDEMPTION.
(a) Except as otherwise provided in this Section 3.7 or in
paragraph (b) of the Citicasters Securities Asset Sale Offer with respect to the
New World Station Sale, the Citicasters Securities may not be redeemed at the
option of Citicasters prior to February 15, 1999. Thereafter, the Citicasters
Securities will be subject to redemption at the option of Citicasters, in whole
or in part, at the Redemption Prices (expressed as percentages of the principal
amount of the Citicasters Securities) set forth below, plus any accrued and
unpaid interest to the Redemption Date, if redeemed during the twelve-month
period beginning on February 15 of the years indicated below:
Year Percentage
---- ----------
1999.............................. 104.875%
2000.............................. 103.250%
2001.............................. 101.625%
2002 and thereafter............... 100.000%
Annex - 23
<PAGE>
Notwithstanding the foregoing, up to 25% in aggregate principal
amount of Citicasters Securities originally issued under this Indenture will be
redeemable from time to time prior to December 31, 1996, at the option of
Citicasters, from the Net Proceeds of one or more Public Offerings of
Citicasters at a Redemption Price equal to 108.75% of the principal amount
thereof, together with accrued and unpaid interest to the date of redemption;
provided, however, that any such redemption shall be permitted only if and to
the extent that, after giving effect thereto and to any simultaneous redemptions
pursuant to Section 3.7(b) or Section 3.7(c), at least $75,000,000 in principal
amount of Initial Citicasters Securities will remain outstanding.
(b) Prior to February 15, 1999, the Citicasters Securities
will be subject to redemption (a "Change of Control Redemption") at the option
of Citicasters, in whole or in part, at any tune within 180 days after the later
of (i) a Change of Control Trigger Date, and (ii) the completion of an Offer
made as a result of a Change of Control, at a redemption price equal to the sum
of (a) the principal amount thereof, plus (b) accrued and unpaid interest to the
redemption date, plus (c) the Applicable Premium; PROVIDED, HOWEVER, that a
Change of Control Redemption shall be permitted only if and to the extent that,
after giving effect thereto and to any simultaneous redemptions pursuant to the
last sentence of Section 3.7(a) or Section 3.7(c), at least $75,000,000 in
principal amount of Citicasters Securities will remain outstanding, unless such
Change of Control Redemption is for all outstanding Citicasters Securities.
(c) Prior to December 31, 1996 the Citicasters Securities
will be subject to redemption (an "Asset Sale Redemption") at the option of
Citicasters, in whole or in part, following an Asset Sale, other than a
Permitted Television Station Sale, in connection with an Asset Sale Payment;
provided that an Asset Sale Redemption may be made by Citicasters only if, and
to the extent that, each of the following conditions is satisfied; (i) only two
Asset Sale Redemptions will be permitted under this Indenture; (ii) the maximum
aggregate principal amount of Citicasters Securities to be redeemed pursuant to
an Asset Sale Redemption will be limited to that amount which is necessary to
make the ratio set forth in paragraph (c) under the definition of Citicasters
Securities Asset Sale Offer,
Annex - 24
<PAGE>
given the amount of the proposed Asset Sale Payment, equal to (but not more or
less than) 4.5:1; and (iii) after giving effect to the proposed Asset Sale
Redemption and to any simultaneous redemptions pursuant to the last sentence of
Section 3.7(a) or Section 3.7(b), at least $75,000,000 in principal amount of
Initial Citicasters Securities will remain outstanding. In the event of an Asset
Sale Redemption, the Citicasters Securities will be redeemable at the Redemption
Prices (expressed as percentages of the principal amount of the Citicasters
Securities) set forth below, plus any accrued and unpaid interest to the date of
redemption, if redeemed during the periods indicated below.
PERIOD PERCENTAGE
February 15, 1994 to July 31, 1994 102.00%
August 1, 1994 to February 14, 1995 103.00%
February 15, 1995 to December 31, 1996 108.75%
SECTION 3.8. MANDATORY OFFERS.
(a) Within 60 days after any Change of Control Trigger Date,
or within 10 Business Days after any Asset Sale Trigger Date, Citicasters shall
mail a notice to each Holder (with a copy to the Trustee) containing all
instructions and materials necessary to enable such Holders to tender
Citicasters Securities pursuant to the Offer and stating: (1) that an Offer is
being made pursuant to a Change of Control Offer or pursuant to the definition
of Citicasters Securities Asset Sale Offer, as the case may be, the length of
time the Offer shall remain open, and the maximum aggregate principal amount of
Citicasters Securities that Citicasters is required to purchase pursuant to such
Offer (2) the purchase price for the Citicasters Securities, the amount of
accrued and unpaid interest on such Citicasters Securities as of the purchase
date, and the purchase date (which shall be no earlier than 30 days nor later
than 40 days from the date such notice is mailed (the "Purchase Date"); (3) that
any Note not tendered will continue to accrue interest if interest is then
accruing; (4) that, unless Citicasters fails to deposit with the Paying Agent on
the Purchase Date an amount sufficient to purchase all Citicasters Securities
accepted for payment, interest shall cease to accrue on such Citicasters
Securities after the Purchase Date; (5) that Holders electing to tender any Note
or portion thereof will be required to surrender their Note, with a form
entitled "Option of Holder to Elect Pur-
Annex - 25
<PAGE>
chase" completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding the Purchase Date,
PROVIDED that Holders electing to tender only a portion of any Note must tender
a principal amount of $1,000 or integral multiples thereof; (6) that Holders
will be entitled to withdraw their election to tender Citicasters Securities if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Citicasters Securities delivered for purchase, and a statement that
such Holder is withdrawing his election to have such Note purchased; (7) that
Holders whose Citicasters Securities are accepted for payment in part will be
issued new Citicasters Securities equal in principal amount to the unpurchased
portion of Citicasters Securities surrendered, PROVIDED that only Citicasters
Securities in a principal amount of $1,000 or integral multiples thereof will be
accepted for payment in part and (8) if the Offer is made with respect to a
Change of Control, the circumstances and relevant facts regarding such Change of
Control.
(b) Notwithstanding anything in this Section 3.8 to the
contrary, Citicasters shall not be required to commence an Offer as a result of
a Change of Control if, within thirty (30) days of the Change of Control Trigger
Date, Citicasters notifies the Holders that all outstanding Citicasters
Securities will be redeemed pursuant to a Change of Control Redemption.
(c) Subject to the provisions of Article 10, on the Purchase
Date for any Offer, Citicasters will (i) in the case of an Offer resulting from
a Change of Control, accept for payment all Citicasters Securities or portions
thereof tendered pursuant to such Offer and, in the case of an Offer resulting
from one or more Asset Sales, accept for payment the maximum principal amount of
Citicasters Securities or portions thereof tendered pursuant to such Offer that
can be purchased out of Excess Proceeds from such Asset Sales, (ii) deposit with
the Paying Agent the aggregate purchase price of all Citicasters Securities or
portions thereof accepted for payment and any accrued and unpaid interest on
such Citicasters Securities as of the Purchase Date, and (iii) deliver, or cause
to be delivered, to the Trustee all Citicasters Securities tendered pursuant to
the Offer, together with an Officers' Certificate setting forth
Annex - 26
<PAGE>
the name of each Holder of the tendered Citicasters Securities and the principal
amount of the Citicasters Securities or portions thereof tendered by each such
Holder. For purposes of this Section 3.8, the Trustee shall act as the Paying
Agent.
(d) With respect to any Offer, (i) if less than all of the
Citicasters Securities tendered pursuant to an Offer are to be accepted for
payment by Citicasters for any reason, Citicasters and the Trustee shall select
on or prior to the Purchase Date the Citicasters Securities or portions thereof
to be accepted for payment pursuant to Section 3.2; PROVIDED, HOWEVER, that
if any Additional Citicasters Securities are outstanding, such selection shall
be effected in such a manner as to ensure that the ratio of the outstanding
principal amount of the Initial Citicasters Securities and the ratio of the
outstanding principal amount of Additional Citicasters Securities, respectively,
to the sum of the outstanding principal amount of the Initial Citicasters
Securities and Additional Citicasters Securities prior to such selection is
equal to such ratios after such selection, and (ii) if Citicasters deposits with
the Paying Agent on or prior to the Purchase Date an amount sufficient to
purchase all Citicasters Securities accepted for payment, interest shall cease
to accrue on such Citicasters Securities on the Purchase Date; PROVIDED,
HOWEVER, that if Citicasters fails to deposit an amount sufficient to purchase
all Citicasters Securities -accepted for payment, the deposited funds shall be
used to purchase on a pro rata basis all Citicasters Securities accepted for
payment and interest shall continue to accrue on all Citicasters Securities not
purchased.
(e) Subject to the provisions of Article 10, promptly after
the Purchase Date with respect to an Offer, (i) the Paying Agent shall mail to
each Holder of Citicasters Securities or portions thereof accepted for payment
an amount equal to the purchase price for, plus any accrued and unpaid interest
on, such Citicasters Securities, (ii) with respect to any tendered Note not
accepted for payment in whole or in part, the Trustee shall return such Note to
the Holder thereof, and (iii) with respect to any Note accepted for payment in
part, the Trustee shall authenticate and mail to each such Holder a new Note
equal in principal amount to the unpurchased portion of the tendered Note.
Annex - 27
<PAGE>
(f) Citicasters will (i) publicly announce the results of the
Offer on or as soon as practicable after the Purchase Date, and (ii) comply with
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
to the extent such laws and regulations are applicable to any Offer.
ARTICLE IV
SELECTED COVENANTS
* * *
SECTION 4.5. LIMITATION ON RESTRICTED PAYMENTS.
(a) Citicasters shall not, and shall not permit any
Subsidiary to, directly or indirectly, make any Restricted Payment, except (1)
dividends, payments or other distributions with respect of any Capital Stock by
any Subsidiary to Citicasters or any Wholly owned Subsidiary of Citicasters, (2)
repurchases, redemptions, retirements or acquisitions of Capital Stock by a
Wholly owned Subsidiary of Citicasters from Citicasters or another Wholly owned
Subsidiary of Citicasters, (3) payments, prepayments, repurchases, redemptions
and acquisitions permitted under Section 4.7 with respect to Indebtedness not
incurred in violation of Section, 4.7, and (4) Restricted Payments by
Citicasters if (i) at the time of and after giving effect to the proposed
Restricted Payment no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, (ii) at the time of and
immediately after giving effect to the proposed Restricted Payment, Citicasters
could Incur at least $1.00 of additional Indebtedness pursuant to Section 4.7(b)
and (iii) at the time of and immediately after giving effect to the proposed
Restricted Payment (the value of any such payment if other than cash, as
determined by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution, PROVIDED that in the event such value
exceeds $3 million such determination shall be supported by a fairness opinion
of an Independent Financial Advisor) the aggregate amount of all Restricted
Payments (excluding all payments, investments, redemptions, repurchases,
retirements and other acquisitions described in clause (ii) of Section 4.5(b))
declared or made after the Issue Date does not exceed an amount equal to the sum
of (A) Cumulative Operating Cash Flow of Citicasters and its Subsidiaries less
1.4 times
Annex - 28
<PAGE>
Cumulative Total Interest Expense of Citicasters and its Subsidiaries, plus (B)
an amount equal to 100% of the aggregate Qualified Capital Stock Proceeds
received by Citicasters from the issuance and sale (other than to a Subsidiary
of Citicasters) of Qualified Capital Stock to the extent that such proceeds are
not used to redeem, repurchase, return or otherwise acquire Capital Stock or any
Indebtedness of Citicasters or any Subsidiary pursuant to clause (ii) of Section
4.5(b) and (c) $5,000,000.
(b) Notwithstanding Section 4.5(a), the following Restricted
Payments may be made: (i) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture; (ii) the redemption,
repurchase, retirement or other acquisition for value of any Capital Stock or
any Indebtedness of Citicasters or any Subsidiary in exchange for, or out of the
Qualified Capital Stock Proceeds of, the substantially concurrent sale (other
than to Citicasters or a Subsidiary of Citicasters) of Qualified Capital Stock
of Citicasters; and (iii) the redemption of Citicasters Securities under the
circumstances provided in Article 3 and pursuant to a Change of Control Offer
and a Citicaster Securities Asset Sale Offer.
* * *
SECTION 4.7. LIMITATION ON INDEBTEDNESS.
(a) Except as set forth in this Section 4.7, Citicasters
shall not, and shall not permit any Subsidiary, after the Issue Date, directly
or indirectly, to Incur any Indebtedness (including Acquired Indebtedness and
under any Additional Note). For purposes of this Indenture, Indebtedness of any
Acquired Person that is not a Subsidiary, which Indebtedness is outstanding at
the time such Person is acquired by Citicasters or a Subsidiary or becomes, or
is merged into or consolidated with, a Subsidiary, shall be deemed to have been
Incurred by Citicasters at the time such Acquired Person becomes, or is merged
into or consolidated with, a Subsidiary.
(b) Notwithstanding Section 4.7(a) and in addition to
Indebtedness permitted to be Incurred under Section 4.7(c), Citicasters (subject
to the limitations set forth in Section 4.15) or any Subsidiary may Incur
Indebtedness
Annex - 29
<PAGE>
if (i) no Default or Event of Default shall have occurred and be continuing at
the time or as a consequence of the Incurrence of such Indebtedness and (ii) on
the date of the Incurrence of such Indebtedness, the Debt to Operating Cash
Flow Ratio of Citicasters and its Subsidiaries at the time of such Incurrence,
after giving pro forma effect thereto, is 7.0:1 or less.
(c) Notwithstanding Section 4.7(a) and in addition to
Indebtedness permitted to be Incurred under Section 4.7(b), Citicasters and its
Subsidiaries may Incur any of the following Indebtedness:
(i) Designated Senior Debt;
(ii) Indebtedness evidenced by the Initial Citicasters
Securities;
(iii) Indebtedness to any Wholly owned Subsidiary of
Citicasters or Indebtedness of any Subsidiary to Citicasters (provided
that such Indebtedness is at all times held by Citicasters or a Wholly
owned Subsidiary of Citicasters); PROVIDED, HOWEVER, that for purposes
of this Section 4.7, upon either (A) the transfer or other disposition by
any such Wholly owned Subsidiary of any Indebtedness so permitted to a
Person other than Citicasters or another Wholly owned Subsidiary of
Citicasters or (B) the issuance, sale, lease, transfer or other
disposition of shares of Capital Stock (including by consolidation or
merger) of such Wholly owned Subsidiary to a Person other than Citicasters
or another such Wholly owned Subsidiary, the provisions of this clause
(iii) shall no longer be applicable to such Indebtedness and such
Indebtedness shall be deemed to have been Incurred by Citicasters at the
time of such transfer or other disposition;
(iv) Refinancing Indebtedness with respect to
Indebtedness that was Incurred prior to the Issue Date or, if incurred
after the Issue Date, was Incurred in compliance with the provisions of
this Indenture; PROVIDED, HOWEVER, that (A) the principal amount of
such Refinancing Indebtedness shall not exceed the principal amount (or
accreted value, in the case of Indebtedness issued at a discount) of the
Indebtedness so extended, refinanced, renewed, replaced, substituted,
defeased or refunded (plus the amount of
Annex - 30
<PAGE>
fees, costs and expenses incurred and the amount of any premium,
penalties, breakage costs and other similar amounts required to be paid in
connection with such refinancing pursuant to the terms of the instrument
governing the Indebtedness so extended, refinanced, renewed, replaced,
substituted, defeased or refunded or the amount of any premium reasonably
determined by Citicasters as necessary to accomplish a refinancing by
means of a tender offer or privately negotiated repurchase, which
determination shall be supported by a fairness opinion from an Independent
Financial Advisor, plus the fees, costs and expenses of such tender offer
or repurchase); and (B) the Refinancing Indebtedness shall (1) have a
Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of the Indebtedness being extended, refinanced,
renewed, replaced, substituted, defeased or refunded; (2) not have a final
scheduled maturity earlier than the final scheduled maturity of the
Indebtedness being extended, refinanced, replaced, renewed, substituted,
defeased or refunded; (3) not permit redemption at the option of the
holder earlier than the earliest date of redemption at the option of the
holder of the Indebtedness being extended, refinanced, replaced, renewed,
substituted, defeased or refunded; and (4) rank no more senior or be at
least as subordinated, as the case may be, in right of payment to the
Citicasters Securities as the Indebtedness being extended, refinanced,
replaced, renewed, substituted, defeased or refunded; PROVIDED,
FURTHER, that the limitations contained in this clause (iv) shall not
preclude Citicasters or any of its Subsidiaries from Incurring additional
Indebtedness permitted to be Incurred at the time under Section 4.7(b) or
any other clause of this Section 4.7(c), notwithstanding that such
additional Indebtedness would fall within the definition of "Refinancing
Indebtedness";
(v) With respect to Citicasters, Guarantees of
obligations under existing Investments in The Theme Park Partnership, an
Australian partnership, up to an aggregate amount not exceeding 4,033,125
Dollars (Australian);
(vi) Indebtedness with respect to Interest Rate or
Currency Protection Agreements; and
Annex - 31
<PAGE>
(vii) Indebtedness not otherwise permitted to be
Incurred pursuant to clauses (i) through (vi) above which, together with
any other outstanding Indebtedness Incurred pursuant to this clause (vii),
has an aggregate principal amount not in excess of $25,000,000 at any one
time outstanding (plus Obligations for related payments for early
termination, interest, fees, expenses and indemnities and other similar
amounts payable thereunder or in connection therewith).
* * *
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT
(a) Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest on any Citicasters
Securities (whether or not prohibited by the subordination provisions of this
Indenture); (ii) default in the payment when due, whether at maturity,upon
acceleration, redemption or otherwise, of principal on any Citicasters
Securities (whether or not prohibited by the subordination provisions of this
Indenture); (iii) failure by Citicasters for 30 days after receipt of notice
from the Trustee or Holders of at least 25% of the principal amount of the
outstanding Citicasters Securities to comply with any other provisions of this
Indenture or any Citicasters Securities; (iv) default under any mortgage,
indenture or instrument under which there may be Incurred or by which there may
be secured or evidenced any Indebtedness for money borrowed by Citicasters or
any of its Subsidiaries (or the payment of which is guaranteed by Citicasters or
any of its Subsidiaries) whether such Indebtedness now exists, or is created
after the Issue Date if (A) such default results in the acceleration of such
Indebtedness prior to its express maturity or shall constitute a default in the
payment of such Indebtedness at final maturity of such Indebtedness, and (B) the
principal amount of any such Indebtedness that has been accelerated or not paid
at maturity, when added to the aggregate principal amount of all other such
Indebtedness that has been accelerated or not paid at maturity, exceeds
$10,000,000; (v) failure by Citicasters or any of its Significant Subsidiaries
to pay final judgments, the uninsured portion of which exceeds
Annex - 32
<PAGE>
$10,000,000, which judgments are not paid, discharged, bonded or stayed for a
period of 60 days after the date of entry thereof, (vi) if under any Bankruptcy
Law, (A) Citicasters or any Significant Subsidiary commences a voluntary case,
consents to the entry of an order for relief against it in an involuntary case,
consents to the appointment of a Custodian of it or for all or substantially all
of its property, or makes a general assignment for the benefit of its creditors,
or (B) a court of competent jurisdiction enters an order or decree, and such
order or decree remains unstated and in effect for 60 days, that is for relief
against Citicasters or any Significant Subsidiary in an involuntary case,
appoints a Custodian of Citicasters or any Significant Subsidiary, or orders the
liquidation of Citicasters or any Significant Subsidiary; and (vii) any of the
Applicable Documents shall cease, for any reason, to be in full force and effect
in any material respect, except as a result of an amendment, waiver or
termination thereof as contemplated or permitted hereby or Citicasters shall so
assert in writing.
Annex - 33
<PAGE>
Exhibit B
FORM OF GUARANTEE
For value received, ______________________, a ___________________
[corporation/general partnership, hereby irrevocably and unconditionally
guarantees on a senior subordinated basis to the Holder of the Security which is
entitled to the benefit of this Guarantee, the due and punctual payment, as set
forth in the Indenture pursuant to which such Security and this Guarantee were
issued, of the principal of, premium (if any) and interest on such Security when
and as the same shall become due and payable for any reason according to the
terms of such Security and Article XII of the Indenture. The Guarantee of the
Security to which this Guarantee relates will not become effective until the
Trustee signs the certificate of authentication on such Security and will be
subject to Article X of the Indenture.
-------------------------------------
By:
------------------------------
By:
------------------------------
B-1
<PAGE>
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
entered into as of June ___, 1996 among Jacor Communications, Inc., an Ohio
corporation (the "Company"), Banque Paribas, individually and as Agent (in such
capacity, the "Agent"), the Co-Agents (as defined in the Credit Agreement) and
the Banks (as defined in the Credit Agreement).
R E C I T A L S:
WHEREAS, the Company, the Agent, each Co-Agent and the Banks are
parties to that certain Credit Agreement dated as of February 20, 1996, as
amended by that certain First Amendment to Credit Agreement dated as of June 3,
1996 among the Company, the Agent, the Co-Agents and the Banks (the "Credit
Agreement"; capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement as amended hereby);
WHEREAS, the Company has requested that the Banks, the Co-Agents and
the Agent amend certain provisions of the Credit Agreement as more fully
described herein; and
WHEREAS, the Banks, the Co-Agents and the Agent have agreed to amend
such provisions upon the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS. Immediately upon the satisfaction of each of the
conditions precedent set forth in Section 2 of this Amendment, the Credit
Agreement is amended as follows:
1.1 AMENDMENT TO ARTICLE I OF THE CREDIT AGREEMENT. Article I of the
Credit Agreement is hereby amended by (a) adding thereto, in proper alphabetical
order, the defined terms set forth below which do not
<PAGE>
appear therein; and (b) deleting any defined terms set forth below which now
appear in such subsection and substituting therefor the following new
definitions:
"Amendment No. 2" shall mean the Second Amendment to Credit Agreement
dated as of June __, 1996 among the Company, the Agent, the Co-Agents and the
Banks.
"Amendment No. 2 Effective Date" shall mean the "Effective Date" as
such term is defined in Amendment No. 2.
"Available Amount" shall mean an amount equal to 100% of the first
$275,000,000 of Equity Cash Proceeds received by the Company from and after June
1, 1996.
"Citicasters Merger" means the merger of JCAC with and into
Citicasters Inc., a Florida corporation, on the terms and conditions set forth
in the Citicasters Merger Agreement.
"Citicasters Merger Agreement" means that certain Agreement and Plan
of Merger dated as of February 12, 1996 among the Company, JCAC and Citicasters
Inc.
"Debt Cash Proceeds" means all cash proceeds received by the Company
or any Subsidiary from the incurrence of any Indebtedness (other than
Indebtedness issued (A) by the Company pursuant to the Liquid Yield Option Notes
and (B) by JCAC pursuant to the JCAC Subordinated Notes, in each case only to
the extent such Indebtedness is permitted to be incurred by Section 6.11(h) or
6.11(i), respectively) or the issuance of any instruments relating to such
Indebtedness, in each case net of underwriting discounts, commissions and other
reasonable fees, costs and expenses associated therewith.
"Fee Postponement Period" is defined in Section 2.11.
"JCAC Subordinated Notes" means the Subordinated Notes due 2006 issued
by JCAC.
"Liquid Yield Option Notes" means the Liquid Yield Option Notes due
2011 issued by the Company.
2
<PAGE>
1.2 AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section 2.1 of
the Credit Agreement is hereby amended by adding the following clause at the end
of the first sentence thereof before the period:
; provided that no Bank shall have any obligation to make any
Revolving A Loans on the Amendment No. 2 Effective Date or during the
Fee Postponement Period.
1.3 AMENDMENT TO SECTION 2.2 OF THE CREDIT AGREEMENT. Section 2.2 of
the Credit Agreement is hereby amended by adding the following clause at the end
of the first sentence thereof before the period:
; provided that no Bank shall have any obligation to make any
Revolving B Loans on the Amendment No. 2 Effective Date or during the
Fee Postponement Period.
1.4 AMENDMENT TO SECTION 2.8 OF THE CREDIT AGREEMENT. Section 2.8 of
the Credit Agreement is hereby amended by (i) deleting clause (d) thereof and
substituting therefor the new clause (d) below as follows and (ii) adding new
clauses (j) and (k) as follows:
(d) Within seven Business Days of (i) the receipt by the Company
or any of its Subsidiaries of any Equity Cash Proceeds (other than the
Available Amount of Equity Cash Proceeds to the extent such proceeds
are used to repay the Obligations as set forth in Section 2.8(j)) in
excess of $2,000,000 during any fiscal year, the Company shall make a
mandatory prepayment with respect to the Obligations in an amount
equal to 50% of such Equity Cash Proceeds until such time as the
amount of such mandatory prepayment, after giving effect to such
mandatory prepayment, shall cause the Leverage Ratio of the Company to
3
<PAGE>
be equal to (or less than) 5.0 to 1.0, or (ii) the receipt by the
Company or any of its Subsidiaries of any Debt Cash Proceeds, the
Company shall make a mandatory prepayment with respect to the
Obligations in an amount equal to 100% of such Debt Cash Proceeds.
Any prepayment of the Obligations pursuant to this subsection (d)
shall be applied as set forth in subsection (h) below.
(j) The Company shall repay the Obligations in full (without a
corresponding reduction in the Aggregate Revolving A Loan Commitment
or the Aggregate Revolving B Loan Commitment) with the Available
Amount of Equity Cash Proceeds as required pursuant to Amendment No.
2.
(k) Immediately prior to consummation of the Citicasters Merger,
(i) the Company shall repay the Obligations in full and (ii) the
Aggregate Revolving A Loan Commitment and the Aggregate Revolving B
Loan Commitment shall be terminated in their entirety.
1.5 AMENDMENT TO SECTION 2.11 OF THE CREDIT AGREEMENT. Section 2.11
of the Credit Agreement is hereby amended by adding the following proviso at the
end of such section before the period:
; provided that no commitment fee shall be payable during the period
commencing on the day after the Amendment No. 2 Effective Date and
ending on the earlier to occur of (i) December 31, 1996 or (ii) the
date upon which the Citicasters Merger Agreement is terminated (the
"Fee Postponement Period"); provided further that on the last
4
<PAGE>
day of the Fee Postponement Period the Company agrees to pay to the Agent
a retroactive commitment fee in an amount equal to a fee which shall be
deemed to have accrued during the Fee Postponement Period calculated
by the Agent at the Applicable Rate on an amount equal to the full
amount of the Aggregate Commitment outstanding immediately prior to
the Amendment No. 2 Effective Date; and provided further that no fee
shall be payable pursuant to the immediately preceding proviso if the
Closing Date (as defined in the New Credit Agreement) has occurred on
or before December 31, 1996.
1.6 AMENDMENT TO SECTION 4.2 OF THE CREDIT AGREEMENT. Section 4.2 of
the Credit Agreement is amended by adding after clause (f) thereof, the
following clause (g):
(g) With respect to the first Loan made by each Bank after the Fee
Postponement Period has expired, the Company shall have paid to the Agent,
for the pro rata account of each Bank, a commitment fee in accordance with
Section 2.11.
1.7 AMENDMENT TO SECTION 6.11 OF THE CREDIT AGREEMENT. Section 6.11
of the Credit Agreement is hereby amended by adding new clauses (i) and (j)
thereto as follows:
(i) Indebtedness issued by the Company pursuant to the Liquid
Yield Option Notes in an aggregate principal amount not to exceed
$226,000,000 at maturity; provided that (A) such Indebtedness incurred
pursuant to such Liquid Yield Option Notes shall be issued pursuant to
terms (including, without limitation, maturity, redemption,
amortization, interest,
5
<PAGE>
premiums, fees, covenants, events of default and remedies) acceptable to
the Required Banks in their sole discretion and (B) no Default or Unmatured
Default shall exist at the time such Indebtedness is issued or shall result
from the issuance thereof.
(j) Indebtedness issued by JCAC pursuant to the JCAC
Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000 and a Guaranty by the Company of the Indebtedness of JCAC
under the JCAC Subordinated Notes; provided that (A) such Indebtedness
incurred pursuant to such JCAC Subordinated Notes and such Guaranty
shall be issued pursuant to terms (including, without limitation,
maturity, redemption, amortization, interest, premiums, fees,
covenants, events of default and remedies) acceptable to the Required
Banks in their sole discretion, (B) such Indebtedness incurred
pursuant to such JCAC Subordinated Notes and such Guaranty shall be
subordinated in a manner and pursuant to subordination terms
acceptable to the Required Banks in their sole discretion and (C) no
Default or Unmatured Default shall exist at the time such Indebtedness
is issued or shall result from the issuance thereof.
1.8 AMENDMENT TO SECTION 6.12 OF THE CREDIT AGREEMENT. Section 6.12
of the Credit Agreement is hereby amended by (a) deleting the word "and" at the
end of clause (ii) thereof and substituting therefor a comma and (b) by
inserting prior to the period at the end of clause (iii) thereof the words "and
(iv) the Company may merge, solely for the purpose of changing the state of its
incorporation from Ohio to Delaware, into a Delaware
6
<PAGE>
corporation formed by the Company; provided that in connection with any merger
contemplated by the foregoing clause (iv), (A) the Company shall deliver to the
Agent all consents, approvals, resolutions, charter documents, certificates and
other documents requested by the Agent, (B) the Company agrees to notify the
Agent at least two Business Days prior to the consummation of any such merger
and (C) the Company confirms and agrees that all references to the terms "the
Company" and "Jacor Communications, Inc." in any Loan Document shall be, upon
consummation of any such merger, references to Jacor Communications, Inc., a
Delaware corporation".
1.9 AMENDMENT TO SECTION 6.16 OF THE CREDIT AGREEMENT. Section 6.16
of the Credit Agreement is hereby amended by deleting clause (d) thereof and
substituting therefor the new clause (d) as follows:
, (d) Guaranties permitted under Sections 6.11(b) and 6.11(j)
1.10 AMENDMENT TO SECTION 6.21 OF THE CREDIT AGREEMENT. Section 6.21
of the Credit Agreement is hereby amended by adding the following proviso at the
end of such section before the period:
; provided that the Company may pay Z/C a fee in an aggregate amount
not to exceed $3.5 million for services rendered by Z/C in connection
with the public offering by the Company of equity and debt securities
provided that such fee may be paid to Z/C only if the Agent has
received evidence satisfactory to the Agent that the Company shall
have received cash proceeds from the issuance of Liquid Yield Option
Notes in an amount not less than $100,000,000 less commissions and
other reasonable fees, costs and expenses associated with the issuance
thereof, the issuance of JCAC Subordinated Notes in an aggregate
amount not less than $100,000,000 less commissions and other
rea-
7
<PAGE>
sonable fees, costs and expenses associated with the issuance
thereof and the issuance of equity of the Company in an amount not
less than $275,000,000 less commissions and other reasonable fees,
costs and expenses associated with the issuance thereof.
1.11 AMENDMENT TO SECTION 6.23 OF THE CREDIT AGREEMENT. Section 6.23
of the Credit Agreement is hereby amended by deleting the second proviso thereof
and substituting therefor the following second proviso at the end of such
section before the period:
; provided, further, that JCAC may issue the JCAC Subordinated Notes
and enter into an indenture (on terms acceptable to the Required Banks
in their sole discretion) in connection therewith and enter into the
New Credit Agreement Loan Documents which contain restrictions of the
types referred to in clauses (b), (c), (d) and (e) above.
1.12 AMENDMENT TO SECTION 6.25 OF THE CREDIT AGREEMENT. Section 6.25
of the Credit Agreement is hereby amended by adding the following sentence at
the end of Section 6.25:
The Company shall not, and shall not permit the Subsidiaries to,
amend, restate or otherwise modify or waive any provision of the JCAC
Subordinated Notes or any indenture or any other document or
instrument issued in connection with the JCAC Subordinated Notes
permitted by Section 6.11(j) or the Liquid Yield Option Notes or any
indenture or any other document or instrument issued in connection
with the Liquid Yield Option Notes permitted by Section 6.11(i)
without the consent of the Agent and the Required Banks in their sole
discretion.
1.13 AMENDMENT TO ARTICLE VI OF THE CREDIT AGREEMENT. Article VI of
the Credit Agreement is hereby amended by adding new Sections 6.32 and 6.33
thereto as follows:
8
<PAGE>
Section 6.32 USE OF CERTAIN DEBT CASH PROCEEDS. The Company
shall not, and shall not permit JCAC to, use any proceeds of
Indebtedness received by JCAC from the issuance of the JCAC
Subordinated Notes for any purposes other than (i) to invest in cash
or Investments permitted pursuant to Section 6.15(a), (b) or (c), (ii)
to consummate the Citicasters Merger or (iii) to repay the principal
amount of any JCAC Subordinated Notes which become due and payable at
the option of the holders thereof prior to the stated maturity thereof
if the Citicasters Merger is not consummated on or before December 31,
1996.
Section 6.33 RESTRICTED ACTIVITIES OF JCAC. The Company shall
not permit JCAC (a) to engage in any ongoing business activities, (b)
to create, incur, or suffer to exist any Indebtedness or any Lien on
any of JCAC's property or assets, (c) to create any subsidiary or make
any Investment or (d) to sell, lease, transfer or otherwise dispose of
any of its properties, except (i) Investments permitted pursuant to
Section 6.32, (ii) Indebtedness permitted pursuant to Section 6.11(j)
and (iii) Liens granted pursuant to the Loan Documents or permitted
pursuant to Section 6.17(j) to enter into the New Credit Agreement
Loan Documents.
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. The effectiveness of
this Amendment is subject to the satisfaction of the following conditions
precedent:
9
<PAGE>
2.1 DOCUMENTS.
(a) AMENDMENT. The Company shall have duly executed and delivered
this Amendment.
(b) GUARANTY AMENDMENT. Each Subsidiary (other than the Excluded
Subsidiaries) (collectively, the "Subject Subsidiaries") shall have executed and
delivered a Reaffirmation with respect to the Subsidiary Guaranty in the form of
Exhibit A hereto (the "Reaffirmation").
2.2 GOOD STANDING. The Company shall have delivered to the Agent a
good-standing certificate (and any bring-downs) with respect to the Company from
the Secretary of State of Ohio as to the good standing of the Company as of the
Effective Date (as defined below).
2.3 CERTIFIED RESOLUTIONS, ETC. The Agent shall have received (in
sufficient copies for each Bank) a certificate in form and substance
satisfactory to the Agent of the secretary or assistant secretary (or comparable
officer) of the Company dated the Effective Date, certifying (i) the resolutions
of its Board of Directors approving and authorizing the execution, delivery and
performance by it of this Amendment and the continued effectiveness thereof,
(ii) that there have been no changes in its certificate of incorporation or by-
laws since the Closing Date and (iii) specimen signatures of its officers
authorized to sign this Amendment.
2.4 CONSENTS, LICENSES, APPROVAL, ETC. All consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Company and its Subsidiaries of this Amendment and the
Reaffirmation (collectively, the "Documents"), or the validity or enforceability
hereof or thereof, or in connection with any of the transactions effected
pursuant hereto or thereto, shall have been obtained by the Company and be in
full force and effect.
2.5 NO DEFAULT; ETC. The Agent shall have received a certificate of
an Authorized Officer of the Company dated the Effective Date, certifying as to
matters set forth in Sections 3.2 and 3.8 of this Amendment.
2.6 NO INJUNCTION. No law or regulation shall have been adopted, no
order, judgment or decree of any
10
<PAGE>
governmental authority shall have been issued, and no litigation shall be
pending or threatened, which in the reasonable judgment of the Agent would
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, the execution, delivery or performance by the
Company or any of its Subsidiaries of the Documents, the making or repayment of
the Loans or the consummation of the transactions effected pursuant to the terms
of the Documents and the other Loan Documents (as amended hereby).
2.7 NO MATERIAL ADVERSE CHANGE. No event, act or condition shall
have occurred since February 20, 1996 that, in the reasonable judgment of the
Agent, has had or could have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
Subsidiaries.
2.8 LEGAL OPINIONS. The Agent and each Bank shall have received
favorable legal opinions, dated the Effective Date, of Graydon, Head & Ritchey,
Ohio counsel to the Company and its Subsidiaries, in each case in form and
substance satisfactory to the Agent and the Banks.
2.9 RECEIPT AND USE OF EQUITY CASH PROCEEDS. The Company shall have
received all of the Available Amount of Equity Cash Proceeds and shall have
applied the Available Amount of Equity Cash Proceeds to the extent necessary to
repay in full all of the Obligations due as of the Effective Date.
2.10 COMMITMENT FEE. The Agent shall have received, for the pro-rata
account of each of the Banks in accordance with their respective Commitments,
all commitment fees accrued up to and including the Effective Date.
2.11 COSTS, FEES AND EXPENSES. The Agent and the Banks shall have
received all costs, fees and expenses payable by the Company under the Credit
Agreement in connection with the preparation, execution or delivery of the
Documents (including, without limitation, the reasonable fees and expenses
accrued through the Effective Date of counsel to the Agent); and the Company
hereby agrees to pay, and to hold the Agent, each Bank and each Co-Agent
harmless against, all documentary, stamp, transfer
11
<PAGE>
and similar taxes paid or payable in connection with the execution, delivery or
performance of the Documents.
2.12 ADDITIONAL MATTERS. The Agent shall have received such other
certificates, opinions, documents and instruments relating to the Obligations or
the transactions contemplated hereby as may have been reasonably requested by
the Agent, and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing herein and exhibits hereto) and all legal matters in connection with
the transactions contemplated hereby shall be reasonably satisfactory in form
and substance to the Agent.
SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and
the Banks to enter into this Amendment, the Company represents and warrants to
the Agent and each Bank, upon the effectiveness of this Amendment, which
representations and warranties shall survive the execution and delivery of this
Amendment, that:
3.1 DUE INCORPORATION; ETC. Each of the Company and each Subject
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
3.2 NO DEFAULT; ETC. No Default or Unmatured Default has occurred
and is continuing after giving effect to this Amendment or would result from the
execution or delivery of this Amendment or the Reaffirmation or the consummation
of the transactions contemplated hereby or thereby.
3.3 CORPORATE POWER AND AUTHORITY; AUTHORIZATION. Each of the
Company and each Subject Subsidiary has the corporate power and authority to
execute, deliver and carry out the terms and provisions of the Documents to
which it is a party and the execution and delivery by the Company and each
Subject Subsidiary of the Documents to which it is a party and the performance
by the Company and each Subject Subsidiary of its obligations hereunder and
thereunder have been duly authorized by all requisite corporate action by the
Company and each Subject Subsidiary.
12
<PAGE>
3.4 EXECUTION AND DELIVERY. The Company and each Subject Subsidiary
have duly executed and delivered each Document to which it is a party.
3.5 ENFORCEABILITY. Each Document, the Credit Agreement, as amended
by this Amendment, and each other Loan Document constitute the legal, valid and
binding obligation of the Company and each Subject Subsidiary party thereto, as
the case may be, enforceable against such Person in accordance with its
respective terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' right generally, and by general principles of equity.
3.6 NO CONFLICTS; ETC. Neither the execution, delivery or
performance by the Company or any Subject Subsidiary of the Documents to which
it is a party, nor compliance by any of them with the terms and provisions
hereof and thereof, (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality or (ii) will conflict or be inconsistent with, or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any property or assets
owned by it pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it or any of
its property or assets is bound or to which it may be subject, or (iii) will
violate any provision of its certificate of incorporation or by-laws.
3.7 CONSENTS; ETC. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of the Documents or the consummation of any
of the transactions contemplated hereby or thereby.
3.8 REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties contained in the Credit Agreement and in the other Loan Documents
(other
13
<PAGE>
than those which speak expressly only as of a different date) and in the
Documents are true and correct as of the date hereof after giving effect to this
Amendment and the other Documents and the transactions contemplated hereby and
thereby.
3.9 SENIOR DEBT. The Obligations will constitute Senior Debt under
and as defined in the JCAC Subordinated Notes and any indenture issued in
connection therewith.
SECTION 4. MISCELLANEOUS.
4.1 EFFECT; RATIFICATION. The amendments set forth herein are
effective solely for the purposes set forth herein and shall be limited
precisely as written, and shall not be deemed to (i) be a consent to any
amendment, waiver or modification of any other term or condition of the Credit
Agreement or of any other Loan Document or (ii) prejudice any right or rights
that the Agent, the Co-Agents or the Banks may now have or may have in the
future under or in connection with the Credit Agreement or any other Loan
Document. Each reference in the Credit Agreement to "this Agreement", "herein",
"hereof" and words of like import and each reference in the other Loan Documents
to the "Credit Agreement" shall mean the Credit Agreement as amended hereby.
This Amendment shall be construed in connection with and as part of the Credit
Agreement and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Credit Agreement and each other Loan Document,
except as herein amended, are hereby ratified and confirmed and shall remain in
full force and effect.
4.2 EFFECTIVENESS. This Amendment shall immediately become effective
as of the date first written above upon (i) the receipt by the Agent of duly
executed counterparts of this Amendment from the Company, each Co-Agent and all
of the Banks and (ii) the satisfaction of each condition precedent contained in
Section 2 hereof (the "Effective Date").
4.3 LOAN DOCUMENTS. This Amendment and the Reaffirmation are Loan
Documents executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
14
<PAGE>
4.4 COSTS, FEES AND EXPENSES. The Company agrees to pay all costs,
fees and expenses in connection with the Documents as required pursuant to the
Credit Agreement.
4.5 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each such counterpart constituting an original but all together
one and the same instrument.
4.6 SEVERABILITY. Any provision contained in this Amendment which
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions of this Amendment in that jurisdiction or the
operation, enforceability or validity of that provision in any other
jurisdiction.
4.7 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
JACOR COMMUNICATIONS, INC.
By:/s/ Jon M. Berry
--------------------------------------
Title: Senior Vice President
and Treasurer
BANQUE PARIBAS, individually and
as Agent
By:/s/ Steven M. Heinen
--------------------------------------
/s/ Peter Toal
--------------------------------------
Title: Vice President /
Regional General Manager
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Co-Agent
By:/s/ Robert F. Milordi
--------------------------------------
Title: Managing Director
BANK OF AMERICA ILLINOIS,
individually and as Co-Agent
By:/s/ Kevin P. Morrison
--------------------------------------
Title: Vice President
BANK OF MONTREAL
By:/s/
--------------------------------------
Title:
<PAGE>
THE BANK OF NEW YORK
By:/s/ Brendan T. Nedzi
--------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By:/s/ Margot C. Bright
--------------------------------------
Title: Representative
C.I.B.C., INC.
By:/s/ P. G. Smith
--------------------------------------
Title: Authorized Officer
FIRST BANK
By:/s/ Robert W. Miller
--------------------------------------
Title: Vice President
SOCIETY NATIONAL BANK
By:/s/ Michael Stark
--------------------------------------
Title: Officer
UNION BANK
By:/s/ J. Kevin Sampson
--------------------------------------
Title: Assistant Vice President
<PAGE>
EXHIBIT A
REAFFIRMATION
[Attached]
<PAGE>
REAFFIRMATION OF
SUBSIDIARY GUARANTY
This REAFFIRMATION OF SUBSIDIARY GUARANTY ("Reaffirmation") is entered
into as of June ___, 1996 by each of the parties listed on the signature pages
hereof (collectively, the "Guarantors") in favor of and for the benefit of
Banque Paribas, as agent (in such capacity, the "Agent") for itself, the Co-
Agents and the Banks party to the Credit Agreement and any Interest Rate
Providers. Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Subsidiary Guaranty referenced below.
R E C I T A L S:
WHEREAS, Jacor Communications, Inc., an Ohio corporation (the
"Company"), the Banks, the Agent and each Co-Agent are parties to that certain
Credit Agreement dated as of February 20, 1996, as amended by that certain First
Amendment to Credit Agreement dated as of June 3, 1996 among the Company, the
Agent, the Co-Agents and the Banks (the "Original Credit Agreement");
WHEREAS, the Company, the Banks, the Agent and each Co-Agent are
entering into that certain Second Amendment to Credit Agreement dated as of the
date hereof (the "Credit Agreement Amendment"; and the Original Credit Agreement
as amended by the Credit Agreement Amendment being referred to herein as the
"Credit Agreement"); and
WHEREAS, each of the Guarantors is a party to that certain
Subsidiary Guaranty dated as of February 20, 1996 (the "Subsidiary Guaranty"),
pursuant to which each Guarantor has jointly and severally guaranteed the
Guaranteed Debt, which term includes, inter alia, all Obligations of the Company
under and as defined in the Credit Agreement.
Section 1. REAFFIRMATION. Each of the Guarantors hereby (i)
acknowledges that the Company, the Banks, the Co-Agents and the Agent have
entered into the Credit Agreement Amendment, which Credit Agreement Amendment
has been made available to and has been reviewed by such Guarantor and (ii)
reaffirms that its obligations under the Subsidiary Guaranty and each
<PAGE>
other Collateral Document to which it is a party continues in full force and
effect with respect to the Original Credit Agreement as amended by the Credit
Agreement Amendment.
Section 2. COUNTERPARTS. This Reaffirmation may be executed in any
number of counterparts, each such counterpart constituting an original but all
together one and the same instrument.
Section 3. GOVERNING LAW. THIS REAFFIRMATION SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF ILLINOIS.
<PAGE>
IN WITNESS WHEREOF, each of the Guarantors hereto has caused this
Reaffirmation to be executed and delivered by a duly authorized officer thereof
as of the date first above written.
JACOR BROADCASTING OF FLORIDA, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF ATLANTA, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF KNOXVILLE, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF COLORADO, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF TAMPA BAY, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF ST. LOUIS, INC.
By:
-------------------------------------
Title:
JACOR CABLE, INC.
By:
-------------------------------------
Title:
<PAGE>
GEORGIA NETWORK EQUIPMENT, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING CORPORATION
By:
-------------------------------------
Title:
BROADCAST FINANCE, INC.
By:
-------------------------------------
Title:
JACOR BROADCASTING OF SAN DIEGO, INC.
By:
-------------------------------------
Title:
JCAC, INC.
By:
-------------------------------------
Title:
Acknowledged:
BANQUE PARIBAS, individually,
as Agent and on behalf of the
Co-Agents and each Bank
By:
-------------------------------------
Title:
<PAGE>
CREDIT AGREEMENT
DATED AS OF JUNE 12, 1996
AMONG
JCAC, INC.,
THE LENDERS PARTY HERETO,
CHEMICAL BANK, AS ADMINISTRATIVE AGENT,
BANQUE PARIBAS, AS DOCUMENTATION AGENT,
AND
BANK OF AMERICA ILLINOIS,
AS SYNDICATION AGENT
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . 1
ARTICLE II
THE CREDITS
Section 2.1 Revolving Loans. . . . . . . . . . . . . . . . . . . . . . 29
Section 2.2 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.4 Applicable Margin. . . . . . . . . . . . . . . . . . . . . 32
Section 2.5 Borrowing Notice . . . . . . . . . . . . . . . . . . . . . 33
Section 2.6 Disbursement of Funds. . . . . . . . . . . . . . . . . . . 33
Section 2.7 Interest Periods, etc. . . . . . . . . . . . . . . . . . . 34
Section 2.8 Mandatory Principal Payments . . . . . . . . . . . . . . . 35
Section 2.9 Optional Principal Payments and Reductions
of Commitments . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.10 Method and Place of Payment. . . . . . . . . . . . . . . . 39
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.12 Notes; Recordkeeping . . . . . . . . . . . . . . . . . . . 40
Section 2.13 Minimum Advances . . . . . . . . . . . . . . . . . . . . . 40
Section 2.14 Eurodollar Rate Conversion and Continuation. . . . . . . . 40
Section 2.15 Lending Offices. . . . . . . . . . . . . . . . . . . . . . 41
Section 2.16 Non-Receipt of Funds by the Agent. . . . . . . . . . . . . 41
Section 2.17 Collateral Security. . . . . . . . . . . . . . . . . . . . 41
Section 2.18 Further Assistance . . . . . . . . . . . . . . . . . . . . 42
Section 2.19 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . 43
Section 2.20 Issuance of Letters of Credit, etc.. . . . . . . . . . . . 43
Section 2.21 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . 44
Section 2.22 Obligation of the Company Absolute, etc. . . . . . . . . . 44
Section 2.23 Cash Collateral. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . 45
Section 3.2. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.3. Availability of Rate Options . . . . . . . . . . . . . . . 48
Section 3.4. Funding Indemnification. . . . . . . . . . . . . . . . . . 48
Section 3.5. Lender Certificates; Survival of Indemnity . . . . . . . . 48
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Initial Loans. . . . . . . . . . . 49
Section 4.2 Conditions Precedent to All Loans. . . . . . . . . . . . . 57
Section 4.3 Conditions Precedent to Effectiveness of this
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence and Standing.. . . . . . . . . . . . . 62
Section 5.2 Authorization and Validity . . . . . . . . . . . . . . . . 62
Section 5.3 No Conflict; Government Consent, etc.. . . . . . . . . . . 62
Section 5.4 Financial Statements . . . . . . . . . . . . . . . . . . . 63
Section 5.5 Material Adverse Change. . . . . . . . . . . . . . . . . . 64
Section 5.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 5.7 Litigation and Contingent Obligations. . . . . . . . . . . 64
Section 5.8 Environmental Matters. . . . . . . . . . . . . . . . . . . 64
Section 5.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 5.10 Accuracy of Information. . . . . . . . . . . . . . . . . . 65
Section 5.11 Margin Regulations . . . . . . . . . . . . . . . . . . . . 66
i
<PAGE>
Section 5.12 Materially Burdensome Agreements . . . . . . . . . . . . . 66
Section 5.13 Compliance with Laws; Franchises and Licenses. . . . . . . 66
Section 5.14 Ownership of Properties. . . . . . . . . . . . . . . . . . 67
Section 5.15 Location of Properties . . . . . . . . . . . . . . . . . . 67
Section 5.16 Investment Company Act . . . . . . . . . . . . . . . . . . 68
Section 5.17 Public Utility Holding Company Act . . . . . . . . . . . . 68
Section 5.18 Capital Structure. . . . . . . . . . . . . . . . . . . . . 68
Section 5.19 Collateral Assignments . . . . . . . . . . . . . . . . . . 69
Section 5.20 Excluded Subsidiaries, etc.. . . . . . . . . . . . . . . . 69
Section 5.21 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.22 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.23 Security Interests and Liens . . . . . . . . . . . . . . . 69
Section 5.24 Closing Date Transactions. . . . . . . . . . . . . . . . . 70
Section 5.25 Call Letters; Patents, Trademarks, etc.. . . . . . . . . . 70
Section 5.26 No Default . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 5.27 Brokers' Fees. . . . . . . . . . . . . . . . . . . . . . . 71
Section 5.28 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 5.29 Representations and Warranties in Noble Documents. . . . . 71
Section 5.30 Representations and Warranties in Citicasters
Documents. . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 5.31 Subsidiary Agreements. . . . . . . . . . . . . . . . . . . 72
ARTICLE VI
COVENANTS
Section 6.1 Financial Reporting. . . . . . . . . . . . . . . . . . . . 72
Section 6.2 Notice of Default, Litigation etc. . . . . . . . . . . . . 73
Section 6.3 Financial Ratios . . . . . . . . . . . . . . . . . . . . . 74
Section 6.4 Conduct of Business; Maintenance of Licenses . . . . . . . 75
Section 6.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 6.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 6.7 Compliance with Laws and FCC Filings in
connection with Loan Documents . . . . . . . . . . . . . . 76
Section 6.8 Maintenance of Properties. . . . . . . . . . . . . . . . . 76
Section 6.9 Inspection, etc. . . . . . . . . . . . . . . . . . . . . . 76
Section 6.10 Restricted Payments. . . . . . . . . . . . . . . . . . . . 76
Section 6.11 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 77
Section 6.12 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 6.13 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . 79
Section 6.14 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . 80
Section 6.15 Investments and Acquisitions . . . . . . . . . . . . . . . 80
Section 6.16 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 6.17 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 6.18 Capital Expenditures . . . . . . . . . . . . . . . . . . . 83
Section 6.19 Rentals. . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 6.20 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 6.21 Management Fees. . . . . . . . . . . . . . . . . . . . . . 84
Section 6.22 Interest Rate Protection, etc. . . . . . . . . . . . . . . 84
Section 6.23 Certain Agreements . . . . . . . . . . . . . . . . . . . . 84
Section 6.24 Fiscal Year; Fiscal Quarter. . . . . . . . . . . . . . . . 85
Section 6.25 Amendment to Other Agreements. . . . . . . . . . . . . . . 85
Section 6.26 Subsidiary Operations. . . . . . . . . . . . . . . . . . . 85
Section 6.27 FCC Licenses . . . . . . . . . . . . . . . . . . . . . . . 85
Section 6.28 Deposit Accounts . . . . . . . . . . . . . . . . . . . . . 85
Section 6.29 Amendments and Waivers to Citicasters Documents,
Noble Documents, the Mexican Documents and the
Employment Agreements. . . . . . . . . . . . . . . . . . . 85
Section 6.30 Collateral Assignments . . . . . . . . . . . . . . . . . . 85
ARTICLE VII
DEFAULTS
Section 7.1 Breach of Representation or Warranty . . . . . . . . . . . 86
Section 7.2 Failure to Make Payments . . . . . . . . . . . . . . . . . 86
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Section 7.3 Breach of Certain Covenants. . . . . . . . . . . . . . . . 86
Section 7.4 Other Defaults . . . . . . . . . . . . . . . . . . . . . . 86
Section 7.5 Default Under Other Agreements . . . . . . . . . . . . . . 86
Section 7.6 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . 86
Section 7.7 Appointment of Receiver. . . . . . . . . . . . . . . . . . 87
Section 7.8 Condemnation, etc. . . . . . . . . . . . . . . . . . . . . 87
Section 7.9 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.11 Default Under Loan Documents . . . . . . . . . . . . . . . 88
Section 7.12 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 7.13 Collateral Documents . . . . . . . . . . . . . . . . . . . 88
Section 7.14 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 7.15 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 7.16 Change of Control. . . . . . . . . . . . . . . . . . . . . 89
Section 7.17 Prepayment or Redemption with respect to Certain
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 89
Section 7.18 Noble Documents and Mexican Documents. . . . . . . . . . . 89
Section 7.19 Parent Contribution Documents. . . . . . . . . . . . . . . 90
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 8.1 Acceleration . . . . . . . . . . . . . . . . . . . . . . . 90
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 8.3 Preservation of Rights . . . . . . . . . . . . . . . . . . 92
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Survival of Representations. . . . . . . . . . . . . . . . 93
Section 9.2 Governmental Regulation. . . . . . . . . . . . . . . . . . 93
Section 9.3 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 9.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 9.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . 93
Section 9.6 Several Obligations. . . . . . . . . . . . . . . . . . . . 93
Section 9.7 Expenses; Indemnification. . . . . . . . . . . . . . . . . 93
Section 9.8 Numbers of Documents . . . . . . . . . . . . . . . . . . . 94
Section 9.9 Accounting . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 9.10 Severability of Provisions . . . . . . . . . . . . . . . . 94
Section 9.11 Non-liability of Lender. . . . . . . . . . . . . . . . . . 94
Section 9.12 CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . . 94
Section 9.13 CONSENT TO JURISDICTION. . . . . . . . . . . . . . . . . . 94
Section 9.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.15 Limitation of Rights . . . . . . . . . . . . . . . . . . . 95
Section 9.16 Limitation of Liability. . . . . . . . . . . . . . . . . . 95
ARTICLE X
THE AGENTS
Section 10.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . 95
Section 10.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.3 General Immunity . . . . . . . . . . . . . . . . . . . . . 96
Section 10.4 No Responsibility for Loans, Recitals, etc.. . . . . . . . 96
Section 10.5 Action on Instructions of Lenders. . . . . . . . . . . . . 96
Section 10.6 Employment of Agents and Counsel . . . . . . . . . . . . . 96
Section 10.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . 96
Section 10.8 Agent's Reimbursement and Indemnification. . . . . . . . . 96
Section 10.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . 97
Section 10.10 Lender Decisions . . . . . . . . . . . . . . . . . . . . . 97
Section 10.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . 97
Section 10.12 Collateral Releases. . . . . . . . . . . . . . . . . . . . 97
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
Section 11.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 11.2 Ratable Payments . . . . . . . . . . . . . . . . . . . . . 98
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Successors and Assigns . . . . . . . . . . . . . . . . . . 98
Section 12.2 Participations . . . . . . . . . . . . . . . . . . . . . . 98
Section 12.3 Assignments. . . . . . . . . . . . . . . . . . . . . . . . 99
Section 12.4 Dissemination of Information . . . . . . . . . . . . . . . 100
Section 12.5 Confidentiality. . . . . . . . . . . . . . . . . . . . . . 100
ARTICLE XIII
NOTICES
Section 13.1 Giving Notice. . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.2 Change of Address. . . . . . . . . . . . . . . . . . . . . 101
ARTICLE XIV
WAIVER OF JURY TRIAL . . . . . . . . . . . . . 101
EXHIBITS AND SCHEDULES TO CREDIT AGREEMENT
EXHIBITS
Exhibit A-1 - Form of Revolving Notes
Exhibit A-2 - Form of Term A Notes
Exhibit A-3 - Form of Term B Notes
Exhibit B-1 - Form of Collateral Assignment of the Jacor-Noble
Documents
Exhibit B-2 - Form of Collateral Assignment of the Time
Brokerage Agreements
Exhibit B-3 - Form of Collateral Assignment of the Mexican
Agreements
Exhibit B-4 - Form of Collateral Assignment of the Joint Sales
Agreements/Local Marketing Agreements
Exhibit B-5 - Form of Collateral Assignment of the Citicasters
Documents
Exhibit C - Form of Mortgage
Exhibit D-1 - Form of Company Pledge Agreement
Exhibit D-2 - Form of Subsidiary Primary Pledge Agreement
Exhibit D-3 - Form of Subsidiary Secondary Pledge Agreement
Exhibit D-4 - Form of Subsidiary First Amended and Restated
Secondary Pledge Agreement
Exhibit D-5 - Form of Parent Pledge Agreement
Exhibit E-1 - Form of Company Security Agreement
Exhibit E-2 - Form of Subsidiary Security Agreement
Exhibit F - Form of Compliance Certificate
Exhibit G-1 - Form of Intercompany Acquisition Demand Note
Exhibit G-2 - Form of First Amended and Restated Intercompany
Acquisition Demand Note
Exhibit H-1 - Form of Intercompany Demand Note
Exhibit H-2 - Form of First Amended and Restated Intercompany
Demand Note
Exhibit H-3 - Form of Third Consolidated Amended and Restated
Intercompany Demand Note
Exhibit I - Form of Third Amended and Restated Intercompany
Security Agreement
Exhibit J-1 - Form of Subsidiary Guaranty
Exhibit J-2 - Form of Parent Guaranty
Exhibit K - Intentionally Deleted
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Exhibit L - Accountant's Letter
Exhibit M - Form of Assignment and Acceptance Agreement
Exhibit N-1 - Form of Company Trademark Agreement
Exhibit N-2 - Form of Subsidiary Trademark Agreement
SCHEDULES
Schedule I - Revolving Loan Commitments
Schedule 1.1 - Citicasters Existing Indebtedness
Schedule 1.2 - Permitted Acquisitions
Schedule 4.1(x) - Governmental Consents, Approvals, Shareholder
Consents, etc.
Schedule 5.3 - No Conflict, Government Consent
Schedule 5.7 - Litigation and Contingent Obligations
Schedule 5.8(a) - Environmental Claims
Schedule 5.8 (b) - Presence of Material of Environmental Concern
Schedule 5.9 - ERISA Matters
Schedule 5.12 - Materially Burdensome Agreements
Schedule 5.13(b)(i) - FCC Broadcast Station Licenses of the Parent, the
Company and Subsidiaries
Schedule 5.13(b)(ii) - Certain Governmental Requirements
Schedule 5.13(c) - Governmental Proceedings
Schedule 5.14 - Liens
Schedule 5.15(a) - Owned Property
Schedule 5.15(b) - Other Locations of Tangible Personal Property
Schedule 5.18(a) - Capital Stock
Schedule 5.18(b)(i) - Existing Debt
Schedule 5.18(b)(ii) - Surviving Debt
Schedule 5.18(b)(iii) - JCI Existing Debt
Schedule 5.21 - Labor Matters
Schedule 5.23 - Interests of Third Parties
Schedule 5.25 - Patents, Copyrights and Trademarks
Schedule 5.27 - Brokers' Fees
Schedule 5.28 - Existing Insurance Policies
Schedule 6.11(e) - Existing Indebtedness
Schedule 6.13 - Permitted Sale of Assets
Schedule 6.15(f) - Permitted Investments
Schedule 6.17(i) - Existing Liens
Schedule 6.20 - Permitted Affiliate Transactions
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This Credit Agreement, dated as of June 12, 1996, is among JCAC, Inc.,
a Florida corporation, the Lenders (as defined below), Chemical Bank, as
Administrative Agent, Banque Paribas, as Documentation Agent, and Bank of
America Illinois, as Syndication Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of transactions
involving related or affiliated sellers, consummated after the date of this
Agreement, by which the Company or any of its Subsidiaries (i) acquires any
going business or assets of any Person (other than assets acquired by the
Company or any of its Subsidiaries in the ordinary course of its business),
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires at least fifty percent (50%) in number of votes (in one
transaction or as the most recent transaction in a series of transactions), of
the securities or other ownership interest in any Person, other than, with
respect to the Company, a Subsidiary of the Company existing on the date hereof.
"Acquisition Certificate" means, with respect to any proposed
Acquisition, a certificate signed by an Authorized Officer of the Company in the
form of a compliance certificate showing the calculations necessary to
determine, after giving effect to such Acquisition, compliance with this
Agreement on a combined PRO FORMA basis, both at the time of such proposed
Acquisition and for the twelve month period immediately following the date of
such Acquisition based upon PRO FORMA projections for such twelve month period
immediately following the date of such Acquisition, and which shall also certify
(i) the aggregate amount of all Permitted Acquisitions made after the Closing
Date (other than the Permitted Acquisitions set forth in sub-clauses (i) and
(ii) of the definition thereof), including the amount of such Acquisition
currently being made, (ii) the accuracy and completeness of the Acquisition Pro
Formas attached to such certificate, (iii) the accuracy of the matters set forth
in clauses (c), (e), (f), (g) and (h) of the definition of "Permitted
Acquisition", and with respect to the matters set forth in clauses (f) and (g)
of such definition, and to the extent applicable, clauses (c) and (h) of such
definition, the calculations in support thereof and (iv) that on the date of
such proposed Acquisition, both before and after giving effect to such
Acquisition, all of the representations and warranties set forth in the Loan
Documents shall be true and correct in all material respects (except those
representations and warranties that speak only as of a different date), and no
Default or Unmatured Default shall exist.
"Acquisition Pro Formas" shall mean, in connection with any proposed
Acquisition by the Company or any of its Subsidiaries of a business engaged
primarily in radio or television broadcasting, a consolidated balance sheet,
profit and loss statement and cash flow statement of the Company and its
Subsidiaries each in reasonable detail and prepared in accordance with Generally
Accepted Accounting Principles consistently applied on a combined PRO FORMA
basis after giving effect to the proposed Acquisition for the twelve-month
period immediately preceding such Acquisition.
"Administrative Agent" means Chemical Bank in its capacity as
administrative agent for the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Company on the same
Borrowing Date, at the same Rate Option and, in the case of Eurodollar Rate
borrowings hereunder, for the same Interest Period.
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"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Person
specified, whether by contract, understanding or otherwise. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agents" means the collective reference to the Administrative Agent,
the Documentation Agent and the Syndication Agent.
"Aggregate Commitment" means, at any time of determination, the
aggregate of the Aggregate Revolving Loan Commitment, the Aggregate Term A Loan
Commitment and the Aggregate Term B Loan Commitment at such time.
"Aggregate Revolving Loan Commitment" means, at any time of
determination, the aggregate of the Revolving Loan Commitments of each of the
Lenders at such time.
"Aggregate Term A Loan Commitment" means, at any time of
determination, the aggregate of the Term A Loan Commitments of each of the
Lenders at such time.
"Aggregate Term B Loan Commitment" means, at any time of
determination, the aggregate of the Term B Loan Commitments of each of the
Lenders at such time.
"Agreement" means this Credit Agreement, as it may be amended,
modified, supplemented or restated and in effect from time to time.
"Agreement Accounting Principles" means United States generally
accepted principles of accounting as in effect on, and applied in a manner
consistent with, those used in preparing the audited December 31, 1995
consolidated financial statements of the Parent and its Subsidiaries.
"Amendments" is defined in Section 8.2.
"Anniversary Date" shall mean each date which occurs on each annual
anniversary of the Closing Date.
"Annual Capital Contribution" shall mean the capital contribution to
be made to the Company by the Parent as provided in the Parent Guaranty and the
Parent Contribution Documents in an amount not less than the amount of the
Annual Management Fee paid by the Company to the Parent pursuant to Section
6.21(c).
"Annual Management Fee" is defined in Section 6.21(c).
"Applicable Margin" means the respective percentages for each Rate
Option determined in accordance with the terms of Section 2.4.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Australia's Wonderland" shall mean the investment by the Company
represented by the Partnership Agreement among James Hardie Industries, Limited,
Leighton Holdings Limited, Taft Broadcasting Company (now known as Citicasters
Co.) and Bartessa Pty. Limited (now known as Sydney Theme Park Pty. Limited)
(together, the "Theme Park Partnership"), dated as of June 6, 1984, and also,
the investment by the Theme Park Partnership in the Joint Venture Agreement
among State Superannuation Board, the Theme Park Partnership, James Hardie
Industries, Limited, Leighton Holdings Limited, Taft Broadcasting Company (now
known as Citicasters Co.) and Bartessa Pty. Limited, dated as of June 6, 1984.
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<PAGE>
"Authorized Officer" means, with respect to any Person, any of the
Chairman of the Board, the President, the Treasurer or the Chief Financial
Officer of such Person, acting singly.
"Bank of America" shall mean Bank of America Illinois in its
individual capacity, and its successors and assigns.
"Banque Paribas" shall mean Banque Paribas in its individual capacity,
and its successors and assigns.
"Base Rate" means a rate per annum at any time equal to the greater of
(i) base rate or prime rate of interest announced by the Administrative Agent
from time to time, changing when and as said base rate or prime rate changes and
(ii) the Federal Funds Rate plus 1/2 of 1% per annum.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.5.
"Broadcast Cash Flow" shall mean, with respect to the Company and its
consolidated Subsidiaries, for any period of calculation the remainder of (x)
the revenue for such period which is classified as net revenue (other than
barter revenue) in the profit and loss statements delivered pursuant to Sections
6.1(a) and 6.1(b) MINUS (y) those expenses which are classified as operating
expenses (other than barter expense, interest expense, depreciation,
amortization, corporate general and administrative expense and non-cash
extraordinary items) for such period in the profit and loss statements delivered
pursuant to Sections 6.1(a) and 6.1(b).
"Broadcast Finance" means Broadcast Finance, Inc., an Ohio
corporation.
"Business Day" means (i) with respect to any borrowing, payment or
selection in respect of any Eurodollar Loan, a day other than Saturday or Sunday
on which banks are open for business in Chicago and New York and on which
dealings in U.S. Dollars are carried on in the interbank eurodollar market and
(ii) for all other purposes, a day other than Saturday or Sunday on which banks
are open for business in Chicago and New York.
"Capital Expenditures" shall mean, for any period, the sum of
expenditures, other than barter expenditures (whether paid in cash or accrued as
a liability, including the portion of Capitalized Leases that is capitalized on
the consolidated balance sheet of the Company and its Subsidiaries during such
period), by the Company and its Subsidiaries during such period that, in
conformity with Agreement Accounting Principles, are included in "capital
expenditures", "additions to property, plant or equipment" or comparable items
in the consolidated financial statements of the Company and its Subsidiaries.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which should be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which should be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Collateralize" means the pledge and deposit with or delivery to
the Administrative Agent, for the benefit of the Agents, the Issuing Banks
3
<PAGE>
and the Lenders, cash or deposit account balances pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent and the
Issuing Banks; such documentation shall irrevocably authorize the Administrative
Agent to apply such cash collateral to reimbursement of the Issuing Banks for
draws under Letters of Credit as and when occurring, and in all cases to payment
of other Obligations as and when due. Cash collateral shall be maintained in
blocked deposit accounts at the Administrative Agent or a Lender.
"Cash Equivalents" shall mean (i) securities issued directly or fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits and
certificates of deposit with, and commercial paper issued by the parent
corporation of, any domestic commercial bank of recognized standing having
capital and surplus in excess of $500.0 million and commercial paper issued by
others rated at least A-2 or the equivalent thereof by Standard & Poor's Ratings
Group or at least P-2 or the equivalent thereof by Moody's Investors Service,
Inc. and in each case maturing within one year after the date of acquisition.
"Cash Interest Expense" means, for any fiscal period of the Company,
the interest expense (including, without limitation, interest expense
attributable to Capitalized Leases in accordance with Agreement Accounting
Principles) of the Company and its Subsidiaries for such period, PLUS all
expenses incurred by the Company or its Subsidiaries in connection with the
payment of fees under any agreement relating to indebtedness during such period
(other than fees paid or payable during such period pursuant to Section 2.11(a)
or (b)), MINUS, to the extent included in the foregoing, any such interest or
fee expense not paid or payable in cash during such period, MINUS interest
income earned and received by the Company or its Subsidiaries during such
period, PLUS any such interest or fee expense accrued but not paid by the
Company or its Subsidiaries during any previous period and paid during such
period, in each case determined on a consolidated basis in accordance with
Agreement Accounting Principles.
"Chemical Bank" shall mean Chemical Bank in its individual capacity,
and its successors and assigns.
"Citicasters" means Citicasters Inc., a Florida corporation.
"Citicasters Agreement" means that certain Agreement and Plan of
Merger dated as of February 12, 1996 among the Parent, JCAC, Inc. and
Citicasters.
"Citicasters Change of Control Put" shall mean the right of the
holders of the Citicasters Subordinated Debt to require that all or any portion
of the Citicasters Subordinated Debt be redeemed or repurchased upon a Change of
Control (as defined in the Citicasters Subordinated Debt Indenture) occurring as
a result of the transactions contemplated by the Citicasters Agreement.
"Citicasters Document Assignment" means an assignment agreement
providing for the assignment by the Parent and the Company of all of their
respective right, title and interest in the Citicasters Documents, in favor of
the Administrative Agent for the ratable benefit of the Lenders, substantially
in the form of Exhibit B-5 hereto, duly completed, executed and delivered to the
Administrative Agent by the Company and certain affiliates of the Company, as
the same may be amended, modified, supplemented or restated and in effect from
time to time.
"Citicasters Documents" means the collective reference to the
Citicasters Agreement and all agreements and instruments executed and delivered
by or in favor of the Parent or the Company in connection with the Citicasters
Merger.
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"Citicasters Existing Debt" means all of the Indebtedness of
Citicasters and its Subsidiaries existing on the Closing Date before giving
effect to the Transactions, as more fully described on Schedule 1.1 hereto.
"Citicasters L/C Documents" means the collective reference to (i) a
letter of credit, in an original principal amount not to exceed $75,000,000,
issued by the L/C Provider in favor of Citicasters on March 13, 1996 in
connection with the proposed acquisition by the Company of the assets and stock
of Citicasters, and (ii) a letter of credit reimbursement agreement between the
Parent and the L/C Provider dated as of March 13, 1996 relating to the letter of
credit referred to in clause (i) above.
"Citicasters Merger" means the merger of JCAC, Inc., a Wholly-Owned
Subsidiary of the Parent, with and into Citicasters on the terms and conditions
set forth in the Citicasters Agreement.
"Citicasters Put Period" shall mean the period commencing on the
Closing Date and ending on the earlier to occur of (i) the date upon which the
Citicasters Change of Control Put expires, provided that such date shall not be
later than forty days from the date a notice of such Change of Control Put is
mailed by the Company pursuant to Section 3.8 of the Citicasters Subordinated
Debt Indenture, provided further that the date upon which such notice is deemed
to be mailed shall not be later than sixty days after the Closing Date and (ii)
the date upon which the Change of Control Put is waived by the holders of the
Citicasters Subordinated Debt.
"Citicasters Subordinated Debt" means all indebtedness represented by
the Citicasters Subordinated Notes.
"Citicasters Subordinated Debt Indenture" means that certain Indenture
dated as of February 18, 1994 between Citicasters and Shawmut Bank Connecticut,
National Association, as trustee, as amended by that certain First Supplemental
Indenture dated as of August 22, 1994 between Citicasters and Shawmut Bank
Connecticut, National Association, as trustee.
"Citicasters Subordinated Debt Maturity Date" means February 15, 2004.
"Citicasters Subordinated Notes" means the 9 3/4% Senior Subordinated
Notes due February 15, 2004 issued pursuant to the Citicasters Subordinated Debt
Indenture.
"Citicasters Transactions" shall mean all of the transactions
contemplated by the Citicasters Documents, including, without limitation, the
Citicasters Merger.
"Closing Date" means that date upon which all conditions precedent to
the making of the initial Loans have occurred and the initial Loans are made.
"Collateral" means the collective reference to the "Collateral" under
and as defined in each of the Collateral Documents (other than the Mortgages)
and the "Property" under and as defined in each of the Mortgages.
"Collateral Assignment" means, with respect to each Joint Sales
Agreement and Local Marketing Agreement, an assignment agreement, substantially
in the form of Exhibit B-4 hereto, providing for the assignment by the Company
or a Subsidiary of the Company, as the case may be, of all of its right, title
and interest in such Joint Sales Agreement or Local Marketing Agreement, in
favor of the Administrative Agent for the ratable benefit of the Lenders, duly
completed, executed and delivered to the Administrative Agent by the Company
and, subject to Section 6.30, duly acknowledged by the other party (or parties)
to such Joint Sales Agreement or Local Marketing Agreement, as the same may be
amended, modified, supplemented or restated and in effect from time to time.
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"Collateral Documents" means, collectively, the Parent Guaranty, the
Parent Pledge Agreement, the Subsidiary Guaranty, the Company Pledge Agreement,
the Company Security Agreement, the Mortgages, the Subsidiary Security
Agreement, the Subsidiary Pledge Agreements, the Company Trademark Agreement,
the Subsidiary Trademark Agreements, the Noble Document Assignment, the
Citicasters Document Assignment, the Time Brokerage Assignment, the Parent
Account Assignment, the Mexican Assignment Agreement, the Collateral Assignments
and the Intercompany Security Agreement and all ancillary documentation and
agreements required thereunder or executed and/or delivered by the Parent, the
Company or any of its Subsidiaries to the Administrative Agent or any Lender in
connection therewith.
"Commitment Fee Rate" shall mean, at any time of determination, a rate
per annum equal to (i) if the Leverage Ratio is greater than or equal to 5.5 to
1.0 at such time, 0.50% and (ii) if the Leverage Ratio is less than 5.5 to 1.0
at such time, 0.375%. The Commitment Fee Rate shall be subject to adjustment
(upwards or downwards, as appropriate) based on the Leverage Ratio at the end of
each of the first three fiscal quarters and the fiscal year of the Company. For
purposes of determining the Commitment Fee Rate, the Leverage Ratio shall be
determined (i) for the period from the Closing Date until the Company delivers
its monthly financial statements for the period ending as at June 30, 1996, by
determining Total Debt on the Closing Date after giving effect to the making of
the Loans and the consummation of the other Transactions which are consummated
on such date and by determining Operating Cash Flow for the twelve-month period
ending April 30, 1996, (ii) in the case of determinations made with respect to
the first three fiscal quarters of the Company's fiscal year, by reference to
the monthly financial statements for the month ending on the last day of such
fiscal quarter and the Compliance Certificate for such fiscal quarter delivered
pursuant to Sections 6.1(b) and (d) and (iii) in the case of determinations made
with respect to the last fiscal quarter of the Company's fiscal year, by
reference to the financial statements and Compliance Certificate delivered by
the Company pursuant to Sections 6.1(a) and (d), provided that for the purposes
of clauses (i), (ii) and (iii) above, for all periods prior to the purchase of
the Noble Stock pursuant to the Noble Stock Purchase and Warrant Redemption
Agreement, all calculations shall be made on a combined pro forma basis
(excluding the Noble Denver Stations unless they are subject to a Joint Sales
Agreement or a Local Marketing Agreement) as if such Noble Stock had been
purchased on or prior to the first day of such period, all as certified to by an
Authorized Officer of the Company, and attaching to such certificate, combined
pro forma financial statements in support of such calculations. The adjustment,
if any, to the Commitment Fee Rate shall be effective commencing on the Business
Day of the delivery of such quarterly or annual financial statements and
Compliance Certificate and shall be effective only for the period subsequent to
such date. In the event that the Company shall at any time fail to furnish to
the Lenders the financial statements and Compliance Certificate required to be
delivered pursuant to Section 6.1(a), (b) or (d), the maximum Commitment Fee
Rate shall apply until such time as such financial statements and Compliance
Certificate are so delivered to the Administrative Agent.
"Commitments" means, for each Lender, its Revolving Loan Commitment,
its Term A Loan Commitment and its Term B Loan Commitment.
"Communications Act" means the Communications Act of 1934, as amended.
"Company" means (i) prior to the consummation of the Citicasters
Merger, JCAC, Inc., a Florida corporation, and its successors and assigns and
(ii) on and after the Closing Date and after the consummation of the Citicasters
Merger, Citicasters, as the surviving corporation of the Citicasters Merger, and
its successors and assigns.
"Company Mortgages" means collectively any mortgage or deed of trust,
each in substantially the form of Exhibit C hereto duly completed, executed and
delivered by the Company on the Closing Date pursuant to Section 4.1(a)(vi), and
any mortgage or deed of trust duly completed, executed and
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delivered by the Company pursuant to Section 2.17, as each such mortgage or deed
of trust may be amended, modified, supplemented or restated and in effect from
time to time.
"Company Pledge Agreement" means a pledge agreement in substantially
the form of Exhibit D-1 hereto, duly completed, executed and delivered to the
Administrative Agent by the Company, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"Company Security Agreement" means the security agreement in
substantially the form of Exhibit E-1 hereto, duly completed, executed and
delivered to the Administrative Agent by the Company, as the same may be
amended, modified, supplemented or restated and in effect from time to time.
"Company Trademark Agreement" means a trademark security agreement in
substantially the form of Exhibit N-1 hereto, duly completed, executed and
delivered to the Administrative Agent by the Company, as the same may be
amended, modified, supplemented or restated and in effect from time to time.
"Compliance Certificate" means a compliance certificate in
substantially the form of Exhibit F hereto, with appropriate insertions, signed
by an Authorized Officer of the Company, showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
describing the nature thereof and any action the Company is taking or proposes
to take with respect thereto.
"Conversion/Continuation Notice" is defined in Section 2.14(b).
"Current Assets" shall mean, at any time, the current assets (other
than barter, deferred tax, cash and cash equivalents of the Company and its
Subsidiaries at such time), determined on a consolidated basis in accordance
with Agreement Accounting Principles.
"Current Fiscal Year" is defined in Section 6.10.
"Current Liabilities" shall mean, at any time, the current liabilities
(other than the current portion of all long-term Indebtedness of the Company and
its Subsidiaries at such time and other than barter and deferred tax items),
determined on a consolidated basis in accordance with Agreement Accounting
Principles.
"Debt Cash Proceeds" means all cash proceeds received by the Company
or any of its Subsidiaries from the incurrence of, or the issuance of any
instruments relating to, any Indebtedness (other than (i) Qualified Subordinated
Indebtedness and (ii) Indebtedness borrowed by the Company under this
Agreement), in each case net of underwriting discounts, commissions and other
reasonable fees, costs and expenses associated therewith.
"Default" means the occurrence of an event described in Article VII.
"Default Rate" is defined in Section 2.3(c).
"Disposition(s)" is defined in Section 6.13.
"Disqualified Capital Stock" means (a) except as set forth in (b),
with respect to any Person, Equity Interests of such Person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of any event or the passage of time
would be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such Person or any of its Subsidiaries, in whole or in part,
on or prior to the final maturity of the Revolving Loans and the Term A Loans,
and (b) with respect to any Subsidiary of any Person (including with respect to
any Subsidiary of the Company), any Equity Interests other than any
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common equity with no preference, privileges, or redemption or repayment
provisions.
"Documentation Agent" means Banque Paribas in its capacity as
documentation agent for the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Documentation Agent appointed
pursuant to Article X.
"Effective Date" means the date upon which all conditions precedent to
the effectiveness of this Agreement have been satisfied.
"Employment Agreements" means the collective reference to (i) that
certain Employment Agreement dated as of February 20, 1996 between the Company
and John Lynch, and (ii) that certain Employment Agreement dated as of February
20, 1996 between the Company and Frank DeFrancesco, as each such agreement may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 6.29.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned or operated by the Company or any of its Subsidiaries or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, state, local and foreign laws
and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including, without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"Equity Interests" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership interests in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means, with respect to the Company or any of its
Subsidiaries, any Person (or any trade or business, whether or not incorporated)
that is under common control with the Company or such Subsidiary within the
meaning of Section 414 of the Internal Revenue Code.
"Eurodollar Advance" means an Advance which bears interest at the
Eurodollar Rate for a particular Interest Period.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Administrative Agent to
be the rate at which deposits in U.S. dollars are offered by the Administrative
Agent to first-class banks in the interbank eurodollar market at approximately
11 a.m. (New York time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of the relevant Eurodollar Loan
requested hereunder and having a maturity approximately equal to such Interest
Period.
"Eurodollar Loan" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate for a particular Interest Period.
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"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to that Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to that Interest Period, plus
(ii) the Applicable Margin. The Eurodollar Rate shall be rounded, if necessary,
to the next higher 1/100 of 1%.
"Excess Cash Flow" means, for the period commencing January 1, 1997
and ending December 31, 1997 and thereafter for any fiscal year of the Company,
a positive amount, if any, equal to (i) Operating Cash Flow, PLUS (or minus)
(ii) decreases (or increases) in Working Capital from the first day of such
period to the last day of such period MINUS (iii) the sum of (without
duplication) (A) scheduled principal payments made pursuant to scheduled
commitment reductions of the Revolving Loan Commitments with respect to the
Revolving Loans during such period, scheduled amortization during such period of
the principal portion of the Term A Loans and Term B Loans and other
Indebtedness of the Company and its Subsidiaries, (B) Cash Interest Expense and
any other fees and expenses paid in cash under the Loan Documents, (C) income
and franchise taxes paid or payable in cash during such period (other than taxes
on amounts recognized in connection with a sale or other Disposition made by the
Company or any of its Subsidiaries), (D) Capital Expenditures (to the extent
permitted by Section 6.18(b) through (d)) to the extent paid in cash, (E)
payments made to the Parent which are applied by the Parent to Permitted Stock
Repurchases to the extent permitted by Section 6.10(i) and (F) Restricted
Payments paid in cash (to the extent made pursuant to the terms of Section
6.10(iv) or (v)), all calculated for such fiscal year for the Company and its
Subsidiaries on a consolidated basis in accordance with Agreement Accounting
Principles consistently applied.
"Excluded Amount" is defined in Section 6.13(c).
"Excluded Subsidiary" shall mean each of Jacor National Corp., a
Delaware corporation, WIBX Incorporated, a New York corporation and Marathon
Communications, Inc., a New York corporation.
"Excluded Television Station Sales" is defined in Section 6.13(f).
"Existing Debt" is defined in Section 5.18(b).
"Existing Radio Expenditure Maximum" is defined in Section 6.18(b).
"Existing Warrants" means the 1,983,966 warrants outstanding as of the
Closing Date issued in 1993 to purchase shares of the common stock of the
Parent, which warrants are exercisable on or before January 14, 2000 at $8.30
per share.
"Fair Market Value" and "fair market value" means, with respect to any
assets or property, the amount at which such assets or property would change
hands between a willing buyer and a willing seller, within a commercially
reasonable time, each having reasonable knowledge of the relevant facts, neither
being under a compulsion to sell or buy, as such amount is determined by (i) the
board of directors of the Company acting in good faith or (ii) an appraisal or
valuation firm of national or regional standing selected by the Company, with
experience in the appraisal or valuation of properties or assets of the type for
which Fair Market Value is being determined.
"FCC" means the Federal Communications Commission or any other
regulatory body which succeeds to the functions of the Federal Communications
Commission.
"FCC Broadcast Station License" means a broadcast station license or
series of licenses issued by the FCC for the dissemination of radio or
television communications intended to be received by the public.
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<PAGE>
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Chemical Bank and Bank of America Illinois on such day on such
transactions as determined by the Administrative Agent in its discretion.
"Fee Letters" shall mean one or more fee letters entered into between
or among the Parent and/or the Company on the one hand, and the Administrative
Agent, the Documentation Agent and/or the Syndication Agent on the other hand.
"Fixed Charges" means, for any fiscal period of the Company, an amount
equal to the sum of, without duplication, (i) Cash Interest Expense for such
period, PLUS (ii) principal payments due pursuant to (A) scheduled commitment
reductions of the Revolving Loan Commitments during such period on the Revolving
Loans and (B) scheduled amortization during such period of the principal portion
of the Term A Loans and the Term B Loans and (C) scheduled amortization during
such period of the principal portion of other Indebtedness of the Company and
its Subsidiaries, PLUS (iii) the principal component of all rents accrued during
such period in connection with Capitalized Leases under which the Company or any
of its Subsidiaries is the lessee, PLUS (iv) income and franchise taxes paid or
payable in cash during such period (other than taxes on amounts recognized in
connection with Dispositions made by the Company or any of its Subsidiaries)
PLUS (v) all cash Capital Expenditures (other than those permitted under Section
6.18(a)) made or required to be made during such period.
"Floating Rate" means a rate per annum equal to (i) the Base Rate plus
(ii) the Applicable Margin, in each case changing when and as the Base Rate
and/or the Applicable Margin changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FTC" means the Federal Trade Commission or any other regulatory body
which succeeds to the functions of the Federal Trade Commission.
"Generally Accepted Accounting Principles" means United States
generally accepted principles of accounting as in effect as of the date of
determination.
"Governmental Authority" shall mean any nation, state, sovereign, or
government, any federal, regional, state, local or political subdivision and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, any Indebtedness, lease,
dividend or other obligation of any other Person in any manner, whether directly
or indirectly and whether such obligation is contingent or absolute,
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or agrees to maintain the net worth or working capital or other financial
condition of any other Person or otherwise assures any creditor of such other
Person against loss, including, without limitation, any comfort letter,
operating agreement or take-or-pay contract to such effect, all obligations of
such Person for the liabilities or obligations of another under any Joint Sales
Agreement, any Local Marketing Agreement and the Mexican Sales Agency Agreement
and the actual or contingent liability of such Person in connection with any
application for or the issuance of any letter of credit, but shall exclude the
endorsement of instruments for deposit or collection in the ordinary course of
business.
"Hanna-Barbera Escrow Account" shall mean the escrow account/holdback
account established when Citicasters sold assets known as the Hanna-Barbera
assets to HB Entertainment Co., which originally contained approximately
$40,000,000, of which $8,000,000 remains to be disbursed (subject to claims of
buyer) to Citicasters according to the terms of the Escrow Agreement.
"Hedged Amount" is defined in Section 6.22(a).
"HSR Approvals" is defined in Section 4.2(f).
"Indebtedness" of a Person means, without duplication, such Person's
(i) liabilities and obligations for borrowed money, (ii) liabilities and
obligations representing the deferred purchase price of property or services
other than accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade, (iii) liabilities and payment
obligations (contingent or otherwise), whether or not assumed, which are secured
by Liens or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, (iv) liabilities and obligations
which are evidenced by bonds, notes, debentures, banker's acceptances or similar
instruments issued or accepted by banks, or other instruments evidencing
indebtedness, (v) liabilities and obligations relating to Capitalized Lease
Obligations, (vi) payment obligations (contingent or otherwise) arising under
Non-Compete Agreements, (vii) payment obligations arising under agreements to
repurchase securities (but only when such obligations become due or during any
period during which the security holder has the right to cause such payment to
become due), (viii) all liabilities and obligations of such Person in respect of
letters of credit and, without duplication, all unreimbursed amounts drawn
thereunder, (ix) all payment obligations of such Person under any terminated
agreements with respect to Interest Swap and Hedging Obligations, (x) any
Guaranty of any of the foregoing obligations described in the foregoing clauses
(i) through (ix) and all liabilities and obligations of others described in the
foregoing clauses (i) through (ix) that are otherwise such Person's legal
liability or which are secured by any assets or property of such Person and all
obligations to purchase, redeem or acquire any Equity Interests and (xi) all
Disqualified Capital Stock of such Person (valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends). For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value shall be determined in good faith by the
board of directors of the issuer (or managing general partner of the issuer) of
such Disqualified Capital Stock.
"Intercompany Acquisition Loan" means a loan made by the Company to
any of its Subsidiaries, which loan is made by the Company for the purpose of
funding (and the proceeds thereof have been applied to fund) a Permitted
Acquisition by such Subsidiary.
"Intercompany Acquisition Note" means an intercompany acquisition
demand note and a first amended and restated intercompany acquisition demand
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note, each in substantially the form of Exhibits G-1 and G-2 hereto,
respectively, and duly completed, executed and delivered by any Subsidiary of
the Company to evidence Intercompany Acquisition Loans made to such Subsidiary,
as the same may be amended, modified, supplemented, restated or replaced from
time to time in conformity with the terms of this Agreement and in effect from
time to time.
"Intercompany Demand Note" means an intercompany demand note, a first
amended and restated intercompany demand note and a third consolidated amended
and restated intercompany demand note, each in substantially the form of Exhibit
H-1, Exhibit H-2 and Exhibit H-3 hereto, respectively, and duly completed,
executed and delivered by each of the Subsidiaries of the Company (other than
the Excluded Subsidiaries), as the same may be amended, modified, supplemented,
restated or replaced from time to time in conformity with the terms of this
Agreement and in effect from time to time.
"Intercompany Security Agreement" means the second amended and
restated intercompany security agreement and financing statement in
substantially the form of Exhibit I hereto and duly completed, executed and
delivered by the Company and each of the Subsidiaries of the Company (other than
the Excluded Subsidiaries) as the same may be amended, modified, supplemented or
restated from time to time in conformity with the terms of this Agreement and in
effect from time to time.
"Interest Period" is defined in Section 2.7(a).
"Interest Rate Hedge Provider" shall mean any Lender (or any Affiliate
thereof) that provides an interest rate protection agreement to the Company
pursuant to Section 6.22 and that executes and delivers an agency agreement, in
form and substance satisfactory to the Administrative Agent.
"Interest Swap and Hedging Obligations" means any obligation of any
Person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"Investment" of a Person means any loan, advance, extension of credit
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such other Person) or any commitment to make any such advance, loan or extension
of credit (excluding accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or contribution of
capital by such Person to any other Person or any investment in, or purchase or
other acquisition (whether by purchase, merger, consolidation or otherwise) of,
the stock, notes, bonds, debentures or other securities, including options and
warrants, of, any partnership interest in, or any other ownership interest in,
or any agreement to make any such acquisition of, any other Person made by such
Person (whether for cash, property, services, securities or otherwise).
"Issue" means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
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"Issuing Bank" means any of Chemical Bank, Banque Paribas or Bank of
America in its capacity as issuer of one or more Letters of Credit hereunder.
"JCI Existing Debt" is defined in Section 5.18(b).
"Joint Sales Agreement" means an agreement between (or assigned to)
the Company or one of its Subsidiaries and the holder of an FCC Broadcast
Station License (which holder is not the Parent, the Company, any of its
Subsidiaries or an Affiliate of any of them) pursuant to which the Company or
such Subsidiary (i) arranges to purchase advertising time for a fee from the
radio station owned by such holder of such FCC Broadcast Station License, with
such advertising time to be resold by the Company or any such Subsidiary, (ii)
provides or furnishes such resold advertising time to be broadcast by such radio
station and (iii) does not supply programming material to such radio station.
"L/C Amendment Application" means an application form for amendment of
outstanding Letters of Credit as shall at any time be in use at the applicable
Issuing Bank, as such Issuing Bank shall request.
"L/C Application" means an application form for issuance of standby
letters of credit, as appropriate, as shall at any time be in use at the
applicable Issuing Bank, as such Issuing Bank shall request.
"L/C Commitment" means the commitment of the Issuing Banks to Issue,
and the commitment of the Lenders severally to participate in, Letters of Credit
from time to time Issued or outstanding under Section 2.20 and under the
Revolving Credit Commitment, in an aggregate amount for all Issuing Banks not to
exceed on any date the amount of $30,000,000.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, PLUS (b) the aggregate
amount of all unreimbursed drawings under all Letters of Credit.
"L/C Provider" means any financial institution (including, without
limitation, any Lender) which provides a letter of credit in connection with the
acquisition by the Company (or any of its Affiliates) of the stock and/or assets
of Citicasters.
"L/C Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the applicable Issuing Bank's standard
form documents for standby letter of credit issuances, as appropriate.
"Lenders" means the banks and other Persons, other than the Company,
the Administrative Agent (in its capacity as Administrative Agent), the
Documentation Agent (in its capacity as Documentation Agent) and the Syndication
Agent (in its capacity as Syndication Agent), listed on the signature pages of
this Agreement and their respective permitted successors and assigns as may be
parties to any Notice of Assignment executed pursuant to Section 12.3.
"Lending Office" means any office, branch, subsidiary or affiliate of
any Lender or the Administrative Agent.
"Letter of Credit" means any standby letters of credit Issued by the
Issuing Bank pursuant to Section 2.20.
"Leverage Ratio" means, at any time of determination, the ratio of (i)
Total Debt as at the date of such determination to (ii) Operating Cash Flow for
the four consecutive fiscal quarters then most recently ended (unless otherwise
specified herein), all calculated for the Company and its Subsidiaries on a
consolidated basis in accordance with Agreement Accounting Principles
consistently applied.
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"License" is defined in Section 7.14.
"Lien" means any security interest, mortgage, pledge, lien (statutory
or other), claim, charge, encumbrance, conditional sale or title retention
agreement, lessor's interest under a Capitalized Lease or analogous instrument,
or preference, privilege or priority (other than a priority of payment) in, of
or on any Person's assets or properties in favor of any other Person or the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign,
other than financing statements which have lapsed or for which duly executed
termination statements have been delivered to the Administrative Agent.
"Liquid Yield Option Note Documents" means the Liquid Yield Option
Note Indenture, the Liquid Yield Option Notes and all other instruments,
documents and agreements executed in connection therewith as delivered to the
Administrative Agent pursuant to Section 4.1(af) on or before the Closing Date,
the terms of which (including, without limitation, maturity, redemption,
amortization, interest, premiums, fees, covenants, events of default and
remedies) shall have been approved by the Agents, as the same may be amended,
restated, supplemented or otherwise modified in accordance with the Parent
Guaranty.
"Liquid Yield Option Note Indenture" means the indenture pursuant to
which the Liquid Yield Option Notes are or will be issued as approved by the
Agents pursuant to Section 4.1(af) on or before the Closing Date.
"Liquid Yield Option Notes" means the Liquid Yield Option Notes due
2011 issued by the Parent in an aggregate principal amount not to exceed
$226,000,000 at maturity as approved by the Agents pursuant to Section 4.1(af)
on or before the Closing Date.
"Loan Documents" means this Agreement, the Notes, each Letter of
Credit, each L/C Related Document, the Collateral Documents, each Rate Hedging
Agreement, each Intercompany Demand Note, each Intercompany Acquisition Note,
the Fee Letters, and all other notes, instruments, documentation and agreements
required hereunder or thereunder or executed and/or delivered by the Parent, the
Company or any of its Subsidiaries to the Administrative Agent, any other Agent
or any Lender in connection herewith or therewith, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Loans" means, collectively, the Revolving Loans, the Term A Loans and
the Term B Loans.
"Local Marketing Agreement" means, with respect to any radio station,
an agreement between (or assigned to) the Company or one of its Subsidiaries and
the holder or sublicensee of the FCC Broadcast Station License relating to such
radio station (which holder is not the Parent, the Company, any of its
Subsidiaries or an Affiliate of any of them), pursuant to which the Company or
such Subsidiary, subject to the control of such holder of such FCC Broadcast
Station License, and for the payment of a fee to such holder of such FCC
Broadcast Station License, (i) arranges to sell air time for such radio station,
and (ii) supplies personnel and programming material to such radio station.
"Margin Regulations" means the collective reference to Regulation G,
Regulation T, Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulations or official interpretations of said Board of
Governors relating to the extension of credit or incurrence of indebtedness for
the purpose of purchasing or carrying margin stocks.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products.
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"Mexican Assets Purchase Agreement" means that certain Asset Purchase
Agreement between Xetra Comunicaciones, S.A. de C.V. and R.D.P with respect to
the purchase of the operating assets of XETRA-AM and XETRA-FM and the Mexican
Concession.
"Mexican Assignment Agreement" means, in respect of the Mexican
Guaranty and the Mexican Sales Agency Agreement, an assignment agreement,
substantially the form of Exhibit B-3 hereto, providing for the assignment by
the Company and certain of its Subsidiaries of all of their right, title and
interest in the Mexican Guaranty and the Mexican Sales Agency Agreement, in
favor of the Administrative Agent for the ratable benefit of the Lenders, duly
completed, executed and delivered to the Administrative Agent by the Company
and, subject to Section 4.1(a)(xix), duly acknowledged by each "Guarantor" party
to (and as defined in) the Mexican Guaranty and duly acknowledged by the other
party (or parties) to the Mexican Sales Agency Agreement, as the same may be
amended, modified, supplemented or restated and in effect from time to time.
"Mexican Concession" means concession titles granted by the Ministry
of Communications and Transportation of Mexico and permits from the Ministry of
the Interior of Mexico.
"Mexican Documents" means the collective reference to the Mexican
Guaranty, the Mexican Assets Purchase Agreement and the Mexican Sales Agency
Agreement.
"Mexican Guaranty" means that certain joint and several Mexican
Guaranty by Conseco, Inc., an Indiana corporation, and John Lynch in favor of
the Company, pursuant to which each of the "Guarantors" (as defined therein)
agrees, subject to the terms thereof, to pay the Company certain amounts upon
the occurrence of certain events.
"Mexican Guaranty Proceeds" shall have the meaning set forth in
Section 2.8(c).
"Mexican Sales Agency Agreement" means the Exclusive Sales Agency
Agreement dated as of May 12, 1978 between R.D.P. and Noble (which agreement has
been assigned to Noble Broadcast of San Diego), including any amendment thereto
or replacement thereof (such amendment or replacement, as the case may be, to be
in form and substance satisfactory to the Administrative Agent).
"Mortgages" means, collectively, the Company Mortgages and the
Subsidiary Mortgages.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Parent, the Company,
any of its Subsidiaries or any ERISA Affiliate is a party and to which more than
one employer is obligated to make contributions.
"Net Cash Proceeds" is defined in Section 2.8(b)(i).
"Net Non-broadcast Proceeds" is defined in Section 2.8(b)(ii).
"New Radio Expenditure Maximum" is defined in Section 6.18(c).
"New Station" is defined in Section 6.18(c).
"New Station Capex Increase" means, with respect to any fiscal year
after the fiscal year in which a New Station is acquired, the product of (i)
$200,000 MULTIPLIED BY (ii) the number of New Stations acquired prior to such
fiscal year (it being understood that multiple New Stations using a single
facility shall be deemed a single New Station for the purposes hereof).
"New World Escrow Account" shall mean the escrow account of $500,000
established in connection with the sale by Citicasters of Television
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Stations to entities affiliated with New World Communications Group Incorporated
in 1994.
"New World Warrants" shall mean the Class D Warrant Number WD-1
granted by New World Communications Group Incorporated, a Delaware corporation,
to Citicasters Co., dated September 9, 1994, to purchase from New World
Communications Group Incorporated 5,000,000 shares of its Class A Common Stock,
$.01 par value per share, at a price per share of $16.00, subject to adjustment
as provided in the Warrants.
"Noble" means Noble Broadcast Group, Inc., a Delaware corporation.
"Noble Approval" means the approval by all governmental and regulatory
authorities (including, without limitation, the FCC) of (i) the acquisition by
the Parent or its assigns of the equity interests of Noble (as holder, through
its indirect Subsidiary, Noble Broadcast License, Inc., of the FCC Broadcast
Station Licenses for the Noble Stations) pursuant to the Noble Stock Purchase
and Warrant Redemption Agreement and (ii) the conversion of the Noble Warrants,
at the Parent's or its assigns' option, into voting Noble Stock pursuant to the
Noble Stock Purchase and Warrant Redemption Agreement.
"Noble Broadcast" means Noble Broadcast Center, Inc., a California
corporation.
"Noble Broadcast of San Diego" means Noble Broadcast of San Diego,
Inc., a California corporation.
"Noble-Company Credit Agreement" means that certain Credit Agreement
dated as of February 20, 1996 between Broadcast Finance (as "Lender") and Noble
Holdings (as "Borrower") pursuant to which Broadcast Finance (i) effected a term
loan to Noble Holdings, on February 20, 1996, of up to $40,000,000, and (ii) has
made or will make, from time to time, revolving loans to Noble Holdings in an
aggregate amount not to exceed $1,000,000.
"Noble-Company Credit Agreement Guaranty" means that certain
subsidiary guaranty dated as of February 20, 1996 by Noble Broadcast, Noble
Broadcast of Colorado, Inc., Noble Broadcast of St. Louis, Inc., Noble Broadcast
of Toledo, Inc., Nova Marketing Group, Inc., Noble Broadcast Licenses, Inc.,
Noble Broadcast of San Diego, Sports Radio, Inc. and Sports Radio Broadcasting,
Inc. in favor of Broadcast Finance.
"Noble-Company Security Documents" means the collective reference to
the Noble-Company Credit Agreement Guaranty and the Noble Pledge Agreement.
"Noble Denver Stations" means the following stations located in
Denver, Colorado: KBCO-FM, KHIH-FM, KHOW-AM and KBCO-AM.
"Noble Document Assignment" means an assignment agreement providing
for the assignment by the Company and certain of its Subsidiaries of all of
their right, title and interest in certain of the Noble Documents, in favor of
the Administrative Agent for the ratable benefit of the Lenders, substantially
in the form of Exhibit B-1 hereto, duly completed, executed and delivered to the
Administrative Agent by the Company and, subject to Section 4.1(a)(xviii), duly
acknowledged by Noble and certain affiliates of Noble, as the same may be
amended, modified, supplemented or restated and in effect from time to time.
"Noble Documents" means the collective reference to the Noble
Warrants, the Noble Stock Purchase and Warrant Redemption Agreement, the Noble
Indemnification and Escrow Agreement, the Noble Stock Escrow and Security
Agreement, the Noble Registration Rights Agreement, the Noble Investment
Agreement, all Local Marketing Agreements and Joint Sales Agreements with
respect to the Noble Stations, the Noble-Company Credit Agreement, the Noble-
Company Security Documents and the San Diego Asset Purchase Agreement.
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"Noble Holdings" means Noble Broadcast Holdings, Inc., a Delaware
corporation.
"Noble Indemnification and Escrow Agreement" means that certain
Indemnification and Escrow Agreement dated as of February 20, 1996 by and among
(or assigned to) the Company, Prudential Venture Partners II, L.P., Northeast
Ventures, II, John T. Lynch, Frank A. DeFrancesco, CIHC, Inc., Bankers Life
Holding Corporation, Noble, Noble Broadcast of San Diego and The Fifth Third
Bank.
"Noble Investment Agreement" means that certain Investment Agreement
dated as of February 20, 1996 by and between (or assigned to) the Company,
Noble, John T. Lynch, Frank A. DeFrancesco, Thomas R. Jimenez and William R.
Arbenz relating to the purchase by the Company of the Noble Warrants.
"Noble Pledge Agreement" means that certain Pledge Agreement dated as
of February 20, 1996 by Noble Broadcast, Noble Broadcast Holdings, Inc., Noble
Broadcast of Colorado, Inc., Noble Broadcast of St. Louis, Inc., Noble Broadcast
of Toledo, Inc., Nova Marketing Group, Inc., Noble Broadcast Licenses, Inc.,
Noble Broadcast of San Diego, Sports Radio, Inc. and Sports Radio Broadcasting,
Inc. in favor of Broadcast Finance.
"Noble Registration Rights Agreement" means that certain registration
Rights Agreement dated as of February 20, 1996 by and between (or assigned to)
the Company and Noble.
"Noble Stations" means XETRA-FM, San Diego, California; XETRA-AM, San
Diego, California; KMJM-FM, St. Louis, Missouri; KATZ-FM, St. Louis, Missouri;
KNJZ-FM, St. Louis, Missouri; WVKS-FM, Toledo, Ohio; WRVF-FM, Toledo, Ohio;
WSPD-AM, Toledo, Ohio; and the Noble Denver Stations.
"Noble Stock" means all of the outstanding common stock (including,
without limitation, all Class A common stock and all Class B common stock) of
Noble.
"Noble Stock Escrow and Security Agreement" means that certain Stock
Escrow and Security Agreement dated as of February 20, 1996 by and among (or
assigned to) the Company, Prudential Venture Partners II, L.P., Northeast
Ventures, II, John T. Lynch, Frank A. DeFrancesco, Thomas R. Jimenez, William R.
Arbenz and The Fifth Third Bank.
"Noble Stock Purchase and Warrant Redemption Agreement" means that
certain Stock Purchase and Stock and Warrant Redemption Agreement dated as of
February 20, 1996 by and among (or assigned to) the Company, Prudential, Venture
Partners II, L.P., Northeast Ventures, II, John T. Lynch, Frank A. DeFrancesco,
Thomas R. Jimenez, William R. Arbenz, CIHC, Inc., Bankers Life Holding
Corporation, and Noble, as the same may be amended in accordance with the
provisions of Section 6.29.
"Noble Transactions" shall mean all of the transactions contemplated
by the Noble Documents.
"Noble Warrants" means warrants with respect to 75% of the non-voting
stock of Noble.
"Nobro" means Nobro, S.A. de C.V., a Mexican corporation.
"Non-broadcast Assets" shall mean the collective reference to (i) the
New World Warrants, (ii) amounts maintained in the Hanna-Barbera Escrow Account
or the New World Escrow Account, (iii) the assets constituting the investment in
Australia's Wonderland and (iv) up to $5,000,000 in the aggregate of incidental
assets acquired from time to time in connection with the Permitted Acquisition
of a business engaged primarily in radio or television broadcasting which are
not necessary for or useful to the operation of the business or property so
acquired.
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"Non-broadcast Proceeds Application Period" means, with respect to any
Permitted Non-broadcast Proceeds Application, a period of up to 450 days from
the date of any sale, transfer or other disposition of any Non-broadcast Asset
by the Parent, the Company or any of its Subsidiaries.
"Non-broadcast Revolver Reserve" is defined in Section 2.8(b)(ii).
"Non-Compete Agreement" means any agreement under which the Company or
any of its Subsidiaries agrees to pay money to Persons in exchange for
agreements from such Persons to refrain from competing with the Company or any
of its Subsidiaries in a certain line of business in a specific geographical
area for a certain time period, but shall not include any employment agreement
which contains a non-compete clause with respect to which no payment or other
consideration from the Company or any of its Subsidiaries is or will at any time
be due and owing, payable or otherwise contemplated or required.
"Notes" means, collectively, the Revolving Notes, the Term A Notes and
the Term B Notes.
"Notice of Assignment" is defined in Section 12.3.1.
"Obligations" means (i) all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all other obligations,
liabilities and indebtedness of every kind, nature and description of the
Parent, the Company and/or its Subsidiaries to the Lenders or to any Lender, the
Administrative Agent, any Interest Rate Hedge Provider, any other Agent or any
other Person from time to time arising under the Loan Documents whether direct
or indirect, primary or secondary, joint or several, absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired
including, without limitation, all amounts accrued on or after the institution
of any proceeding for relief under the Federal Bankruptcy Code and (ii) all
obligations of the Company (or any of its Affiliates) to the L/C Provider
arising under the Citicasters L/C Documents.
"Operating Cash Flow" means, with respect to the Company and its
consolidated Subsidiaries, for any period of calculation, the remainder of (A)
Broadcast Cash Flow MINUS (B) those expenses (excluding barter expense)
classified as corporate general and administrative expenses for such period in
the profit and loss statements delivered pursuant to Sections 6.1(a) and 6.1(b),
all calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles consistently applied. For
purposes of determining the Leverage Ratio and the Senior Leverage Ratio
hereunder, unless otherwise agreed to by the Required Lenders and the Company,
(i) in the case of any Subsidiary or Radio Station acquired by the Company or
any Subsidiary during any period of calculation, Operating Cash Flow shall be
adjusted to give effect to such acquisition, as if such acquisition occurred on
the first day of such period, by increasing, if positive, or decreasing, if
negative, Operating Cash Flow by the Operating Cash Flow of such newly acquired
Subsidiary or derived from such Radio Station during such period prior to the
date of such acquisition on a combined PRO FORMA basis (as adjusted to eliminate
costs which would be non-recurring expense items after giving effect to such
acquisition, PROVIDED such adjustments shall be specified in reasonable detail
in a certificate executed by an Authorized Officer of the Company), and (ii) in
the case of any Subsidiary or Radio Station sold, transferred or otherwise
disposed of by the Company or any Subsidiary during any period of calculation,
Operating Cash Flow shall be adjusted to give effect to such sale, transfer or
other disposition, as if such sale, transfer or other disposition occurred on
the first day of such period, by decreasing, if positive, or increasing, if
negative, Operating Cash Flow by the Operating Cash Flow of such Subsidiary or
derived from such Radio Station during such period prior to the date of such
sale, transfer or other disposition.
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
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"Parent" means Jacor Communications, Inc., an Ohio corporation, and
its successors and assigns.
"Parent Account" is defined in Section 4.1(a)(xxii).
"Parent Account Assignment" is defined in Section 4.1(a)(xxii).
"Parent Contribution" shall mean the transfer and assignment by the
Parent to the Company of all of the assets of the Parent owned by the Parent
immediately prior to such transfer and assignment (other than the stock of the
Company and other than immaterial assets of the Parent necessary for corporate
administrative purposes), including, without limitation, the Intercompany
Acquisition Loans, the Intercompany Acquisition Notes, the Intercompany Demand
Notes, the Intercompany Security Agreement, the Noble Documents, the Citicasters
Documents, the Mexican Documents, all trademarks, the capital stock and all
equity interests owned by the Parent in all of its Subsidiaries and any other
Persons (other than stock of the Company), the Joint Sales Agreements, the Local
Marketing Agreements and all rights with respect to each of the foregoing.
"Parent Contribution Documents" shall mean all instruments, agreements
and other documents executed and/or delivered in connection with the Parent
Contribution and all instruments, agreements and other documents executed and/or
delivered in connection with the Annual Capital Contribution, in each case as
delivered to the Agents pursuant to Section 4.1(a)(xv) and as each may be
amended, restated, supplemented or otherwise modified in accordance with Section
6.25.
"Parent Guaranty" means a parent guaranty in substantially the form of
Exhibit J-2 hereto, duly completed, executed and delivered to the Administrative
Agent by the Parent, as the same may be amended or modified and in effect from
time to time.
"Parent Plan" means a Plan that is sponsored, maintained, or
contributed to, by the Parent or any of its Subsidiaries, or to which the Parent
or any of its Subsidiaries has an obligation to contribute, for employees of the
Parent or any of its Subsidiaries.
"Parent Pledge Agreement" means a parent pledge agreement in
substantially the form of Exhibit D-5 hereto, duly completed, executed and
delivered to the Administrative Agent by the Parent, as the same may be amended
or modified and in effect from time to time.
"Participants" is defined in Section 12.2.1.
"Permitted Acquisition" means, collectively, (i) the Acquisitions
contemplated by the Noble Documents and by the Citicasters Documents, (ii) the
Acquisitions set forth on Schedule 1.2 hereto, and (iii) at any time of
determination, any other Acquisition by the Company or any of its Subsidiaries
(a) of a business engaged primarily in radio or television broadcasting, or (b)
constituting a Television Swap Acquisition, with respect to which, in the case
of any Acquisition pursuant to sub-clauses (iii)(a) and (iii)(b), each of the
following requirements is then met:
(a) Such Acquisition has been approved by the board of directors of the
entity to be acquired or, if such entity is in bankruptcy, by the
bankruptcy court having jurisdiction over the estate.
(b) As soon as available prior to consummation of such Acquisition, the
Company shall have furnished to the Administrative Agent for
distribution to each Lender (1) written notice describing such
Acquisition, (2) all term sheets and other material draft and
definitive documentation relating to such Acquisition together with
all subsequent material revisions thereto and (3) Acquisition Pro-
Formas relating to such Acquisition.
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(c) The conditions set forth in any one of the following clauses (1), (2)
or (3) shall have been satisfied: (1) the amount of such Acquisition,
when aggregated with all other Permitted Acquisitions made after the
Closing Date (other than the Permitted Acquisitions set forth in sub-
clauses (i) and (ii) of this definition) shall not exceed the sum of
(A) $100,000,000 PLUS (B) the aggregate net cash proceeds received by
the Parent from the issuance of its common stock after the Closing
Date to the extent such proceeds are contributed to the capital of the
Company for the purpose of making any such Acquisition, (2) the
Leverage Ratio would be less than 5.5 to 1.00 and the Senior Leverage
Ratio would be less than 4.00 to 1.00, in each case after giving
effect to such Acquisition (with, for the purposes thereof, Operating
Cash Flow calculated on a combined PRO FORMA basis for the twelve-
month period most recently ended prior to consummation of such
Acquisition for which financial statements have been delivered
pursuant to Section 6.1), or (3) the Required Lenders shall have given
an initial written consent to such Acquisition after their receipt of
initial draft documentation and Acquisition Pro Formas relating to
such Acquisition and, if such draft documentation or Acquisition Pro
Formas shall change in any material respect prior to the consummation
of such Acquisition, the Required Lenders shall have given their
written consent to such changes, provided that each Lender agrees to
use its reasonable best efforts to respond to a Permitted Acquisition
for which its consent is required under this clause (c) within seven
Business Days of its receipt of initial documentation conforming to
the requirements hereof and Acquisition Pro Formas pursuant to clause
(b) above and to respond to any subsequent revisions thereto within
three Business Days of its receipt thereof.
(d) The Company, such Subsidiary and/or the entity to be acquired, as
appropriate, shall have executed and delivered and furnished to the
Administrative Agent and the Lenders, concurrently with the
consummation of such Acquisition, such documents as shall be required
pursuant to Section 2.17 and, if such Acquisition is to be consummated
by a Subsidiary, such Subsidiary shall have executed and delivered to
the Company an Intercompany Acquisition Note in a principal amount
equal to the amount, if any, of any Intercompany Acquisition Loan made
by the Company to such Subsidiary to fund such Acquisition, and such
Intercompany Acquisition Note shall have been duly pledged by the
Company to the Administrative Agent pursuant to the Company Pledge
Agreement.
(e) Prior to and after giving effect to such Acquisition, no Default or
Unmatured Default exists or will exist.
(f) In the case of an Acquisition of a business engaged primarily in
television broadcasting, such Acquisition would not cause Broadcast
Cash Flow, on a combined PRO FORMA basis for the most recent twelve-
month period after giving effect to such Acquisition, attributable to
all television stations then owned by the Company and its Subsidiaries
to exceed 35% of all PRO FORMA Broadcast Cash Flow of the Company and
its Subsidiaries on a consolidated basis.
(g) After giving effect to such Acquisition, the Company would not be in
violation of any financial covenant contained in Section 6.3, in each
case measured as at the effective date of such Acquisition, and on a
projected PRO FORMA basis for the remaining term of this Agreement,
and in the case of calculations of the Leverage Ratio and Senior
Leverage Ratio, with Operating Cash Flow measured on a combined PRO
FORMA basis for the twelve month period most recently ended for which
financial statements have been delivered pursuant to Section 6.1.
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(h) To the extent such Acquisition is, or series of related Acquisitions
involving related or affiliated sellers are, in an amount in excess of
$50,000,000, such Acquisition shall have been approved in writing by
the Required Lenders, unless the Leverage Ratio would be less than 5.5
to 1.00 and the Senior Leverage Ratio would be less than 4.00 to 1.00,
in each case after giving effect to such Acquisition (with, for the
purposes thereof, Operating Cash Flow calculated on a combined PRO
FORMA basis for the twelve-month period most recently ended for which
financial statements have been delivered pursuant to Section 6.1).
(i) The Administrative Agent and the Lenders shall have received (1) an
executed Acquisition Certificate prior to the date of such Acquisition
and (2) evidence satisfactory to the Administrative Agent and the
Lenders and their respective counsel that the Parent, the Company and
its Subsidiaries, as the case may be, shall have made all
applications, filings and registrations with, and obtained all
necessary approvals, orders, authorizations, licenses, certificates
and permits from, the FCC and other federal, state and local
regulatory or governmental bodies or authorities that are or may be
required in connection with the consummation of such Acquisition,
provided that the time for appeal or reconsideration of any such
approval, order, authorization, license, certificate or permit need
not have expired or lapsed in order to satisfy this condition (i).
"Permitted Non-broadcast Proceeds Application" shall mean application
of Net Non-broadcast Proceeds to a Permitted Acquisition (other than notes,
bonds, obligations and securities (other than securities that represent a
controlling interest in the Capital Stock of an entity acquired pursuant to a
Permitted Acquisition)), to Capital Expenditures to the extent permitted under
Sections 6.18(b) through (d) or to other assets of the Company or any of its
Subsidiaries, in each case only to the extent any such assets acquired will
immediately constitute or be a part of a business that in the good faith
judgment of the board of directors of the Company is a materially related
business.
"Permitted Stock Repurchases" means repurchases by the Parent of the
Parent's stock which do not exceed, on an aggregate basis during the term of
this Agreement, an amount equal to, (a) $25,000,000 to the extent the Leverage
Ratio is below 5.00 to 1.00 (after giving effect to any dividends or
distribution by the Company related to such proposed repurchase) on a PRO FORMA
consolidated basis for a period of two consecutive quarters preceding such
repurchase, or (b) $40,000,000 to the extent the Leverage Ratio is below 4.00 to
1.00 (after giving effect to any dividends or distributions by the Company
related to such proposed repurchase) on a PRO FORMA consolidated basis for a
period of two consecutive quarters preceding such repurchase, PROVIDED THAT no
repurchases by the Parent of the Parent's stock shall occur at any time when the
Leverage Ratio is at or above 5.00 to 1.00.
"Person" means any corporation, natural person, firm, joint venture,
limited liability company, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code and which is sponsored or maintained by the Parent,
the Company, any of its Subsidiaries or any ERISA Affiliate for employees of the
Parent, the Company, any of its Subsidiaries or any ERISA Affiliate.
"Proceeds Application Period" means, with respect to any Permitted
Acquisition, a period of up to 275 days from the date of any sale, transfer or
other disposition of any property, asset or business or issuance of any Equity
Interest, in each case as described in Section 2.8(b)(i), which 275 day period
may be extended up to an additional 175 days (the "Extended Period") if the
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consummation of such Permitted Acquisition is subject only to the approval of
the FCC and/or the FTC and, prior to the 275th day after any such sale, transfer
or other disposition, the Company or its applicable Subsidiary, (a) has received
a duly executed letter of intent with respect to such Permitted Acquisition, and
(b) is diligently proceeding with the preparation of all applications and other
documents necessary to obtain (and at all times during the Extended Period
continues to actively pursue) FCC approval for such Permitted Acquisition.
"Pro Rata Share" means, at any time,
(i) with respect to all payments, computations and
determinations relating to the Term A Loan Commitment or the Term A Loan
of any Lender, the percentage obtained by dividing (A) the outstanding
principal balance of such Lender's Term A Loan (or the amount of such
Lender's Term A Loan Commitment, if the Term A Loans have not been made)
by (B) the aggregate outstanding principal balance of the Term A Loans (or
the Aggregate Term A Loan Commitment, if the Term A Loans have not been
made),
(ii) with respect to all payments, computations and
determinations relating to the Term B Loan Commitment or the Term B Loan of
any Lender, the percentage obtained by dividing (A) the outstanding
principal balance of such Lender's Term B Loan (or the amount of such
Lender's Term B Loan Commitment if the Term B Loans have not been made) by
(B) the aggregate outstanding principal balance of the Term B Loans (or the
Aggregate Term B Loan Commitment if the Term B Loans have not been made),
(iii) with respect to all payments, computations
and determinations relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender, or such Lender's interest in Letters of
Credit (including without limitation determinations of the commitment fee
under Section 2.11(b) and Letter of Credit fees under Section 2.21), the
percentage obtained by dividing (A) such Lender's Revolving Loan Commitment
(or the outstanding principal balance of such Lender's Revolving Loans, if
the Revolving Loan Commitments have been terminated pursuant to the terms
of this Agreement) by (B) the Aggregate Revolving Loan Commitment (or the
aggregate outstanding principal balance of the Revolving Loans, if the
Revolving Loan Commitments have been terminated pursuant to the terms of
this Agreement), and
(iv) for all other purposes with respect to each
Lender, the percentage obtained by dividing (A) the sum of (1) the
outstanding principal balance of such Lender's Term A Loan (or such
Lender's Term A Loan Commitment if the Term A Loans have not been made),
(2) the outstanding principal of such Lender's Term B Loan (or such
Lender's Term B Loan Commitment if the Term B Loans have not been made)
and (3) such Lender's Revolving Loan Commitment (or the outstanding
principal balance of such Lender's Revolving Loans and all L/C Obligations
in which such Lender has an interest, if the Revolving Loan Commitments
have been terminated pursuant to the terms of this Agreement) by (B) the
sum of (1) the aggregate outstanding principal balance of the Term A Loans
(or the Aggregate Term A Loan Commitment if the Term A Loans have not been
made), (2) the aggregate outstanding principal balance of the Term B Loans
(or the Aggregate Term B Loan Commitment if the Term B Loans have not been
made) and (3) the Aggregate Revolving Loan Commitment (or the aggregate
out-
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standing principal balance of the Revolving Loans and all L/C Obligations,
if the Revolving Loan Commitments have been terminated pursuant to the
terms of this Agreement).
"Purchasers" is defined in Section 12.3.1.
"Qualified Subordinated Indebtedness" shall mean
Subordinated Debt of the Company which is issued within six months after the
expiration of the Citicasters Put Period and the proceeds of which are used
contemporaneously upon the issuance thereof to repurchase or redeem all or
any portion of the Citicasters Subordinated Debt, PROVIDED that any such
Indebtedness is on terms (including maturity, amortization, interest rate,
premiums, fees, covenants, events of default, remedies and subordination) not
less favorable to the Lenders, in the reasonable judgment of the Agents, than
the terms of any Subordinated Debt of the Company issued on or before the
Closing Date.
"Radio Stations" means, collectively, the radio
stations and radio network and any other broadcast radio stations or
information services now or hereafter owned, acquired or operated pursuant to
a Joint Sales Agreement, a Local Marketing Agreement or the Mexican Sales
Agency Agreement, as the case may be, by the Company and one or more of its
Subsidiaries or by the Company or one or more of its Subsidiaries and shall
include, without limitation, the following: WGST-AM, Atlanta, Georgia;
WGST-FM, Atlanta, Georgia; WPCH-FM, Atlanta, Georgia; WLW-AM, Cincinnati,
Ohio; WEBN-FM, Cincinnati, Ohio; WCKY-AM, Cincinnati, Ohio; WSAI-AM,
Cincinnati, Ohio; WOFX-FM, Cincinnati, Ohio; WAQZ-FM, Cincinnati, Ohio;
WAOZ-AM, Cincinnati, Ohio; KOA-AM, Denver, Colorado; KRFX-FM, Denver,
Colorado; KBPI-FM, Denver, Colorado; KTLK-AM, Denver, Colorado; KTCL-FM,
Denver, Colorado; WQIK-FM, Jacksonville, Florida; WSOL-FM, Jacksonville,
Florida; WJBT-FM, Jacksonville, Florida; WZAZ-AM, Jacksonville, Florida;
WJGR-AM, Jacksonville, Florida; KHTS-FM, San Diego, California; WFLA-AM,
Tampa, Florida; WFLZ-FM, Tampa, Florida; WDUV-FM, Tampa, Florida; WBRD-AM,
Tampa, Florida; WKRQ-FM, Cincinnati, Ohio; WWNK-FM, Cincinnati, Ohio;
WLVQ-FM, Columbus, Ohio; WLLD-FM, Columbus, Ohio; WHOK-FM, Columbus, Ohio;
WLOH-AM, Columbus, Ohio; WTVN-AM, Columbus, Ohio; KYYS-FM, Kansas City,
Missouri; WDAF-AM, Kansas City, Missouri; WKLS-FM, Atlanta, Georgia; KSLX-FM,
Phoenix, Arizona; KEX-AM, Portland, Oregon; KKRZ-FM, Portland, Oregon;
KKCW-FM, Portland, Oregon; KSEG-FM, Sacramento, California; KRXQ-FM,
Sacramento, California; WXTB-FM, Tampa, Florida; WTBT-FM, Tampa, Florida;
KSLX-AM, Phoenix, Arizona; the Georgia News Network, Inc.; Critical Mass
Media, Inc., and the Noble Stations (other than the Noble Denver Stations
except to the extent set forth in the immediately succeeding sentence). The
term "Radio Stations" shall also include the Noble Denver Stations to the
extent (but only to the extent) that the Company and its Subsidiaries, or the
Company or any of its Subsidiaries, currently owns or is operating (whether
pursuant to a Joint Sales Agreement, a Local Marketing Agreement or
otherwise) the Noble Denver Stations.
"Rate Hedging Agreement(s)" means the collective
reference to those interest rate protection agreements entered into by the
Company pursuant to Section 6.22(a) as the same may be amended, modified,
supplemented or restated from time to time.
"Rate Option" means the Eurodollar Rate or the Floating
Rate, as the case may be.
"R.D.P." means Radiodifursora del Pacifico, S.A., a
Mexican corporation.
"Receivables" means and shall include all of the
Company's and its Subsidiaries' present and future rights to payment for
services rendered or products sold.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System from time to time in effect and shall
include any successor or other regulation or official interpretation of said
Board of
23
<PAGE>
Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
"Rentals" of a Person means the aggregate fixed amounts
(other than taxes, insurance, maintenance, utility and other operating
expenses) payable by such Person under any lease of real or personal property
having an original term (including any required renewals or any renewals at
the option of the lessor or lessee, provided, however, that in those cases in
which the lessee has the option to renew the lease, the amount payable
pursuant to such lease is counted only when the lessee exercises its option
to renew) of one year or more but does not include any amounts payable under
Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined
in Section 4043 of ERISA and the regulations issued under such Section, with
respect to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided that a
failure to meet the minimum funding standards of Section 412 of the Internal
Revenue Code and of Section 302 of ERISA shall be a reportable event
regardless of the issuance of any such waivers in accordance with Section
412(d) of the Internal Revenue Code.
"Required Lenders" means Lenders whose Pro Rata Shares,
in the aggregate, are at least 66-2/3%.
"Reserve Requirement" means, with respect to an
Interest Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on eurocurrency liabilities.
"Restricted Payments" is defined in Section 6.10.
"Revolver Reserve" is defined in Section 2.8(b)(i).
"Revolving Loan Commitment" means, for each Lender, the
obligation of such Lender to make Revolving Loans in an aggregate principal
amount at any time not exceeding the amount set forth opposite its name on
Schedule I hereto under the column titled "Revolving Loan Commitment," as
such amount may be modified from time to time pursuant to the terms of this
Agreement.
"Revolving Loan Commitment Reduction Amount" means, for
each Revolving Loan Commitment Reduction Date and subject to Section 2.8(h),
the amount set forth opposite such Revolving Loan Commitment Reduction Date:
On each Revolving Loan Revolving Loan
Commitment Reduction Date Occurring: Commitment Reduction Amount
- ------------------------------------ ---------------------------
After the Anniversary Date which $12,500,000
occurs two years after the Closing
Date but on or prior to the
Anniversary Date which occurs six
years after the Closing Date
After the Anniversary Date which $50,000,000
occurs six years after the Closing
Date but on or prior to the
Anniversary Date which occurs seven
years after the Closing Date
"Revolving Loan Commitment Reduction Date" means each
Anniversary Date and each Semi-Annual Anniversary Date, commencing with the
Semi-Annual Anniversary Date occurring immediately prior to the third
Anniversary Date, provided that the last Revolving Loan Commitment Reduction
Date shall occur on the Anniversary Date which occurs seven years after the
Closing Date.
24
<PAGE>
"Revolving Loan Termination Date" shall mean the
Anniversary Date which occurs seven years after the Closing Date or such
earlier date as the Revolving Loan Commitments of the Lenders shall be
terminated pursuant to the terms of this Agreement.
"Revolving Loans" is defined in Section 2.1(a).
"Revolving Notes" means the collective reference to the
several promissory notes, each in substantially the form of Exhibit A-1 hereto,
duly completed, executed and delivered to the Administrative Agent by the
Company and payable to the order of each Lender in the amount of its original
Revolving Loan Commitment, as each such note may be amended, modified,
supplemented, restated or replaced from time to time.
"San Diego Asset Purchase Agreement" means that certain
Asset Purchase Agreement dated as of February 20, 1996 by and among Jacor
Broadcasting of San Diego, Inc., Noble Broadcast of San Diego (formerly known
as Chesapeake Securities, Inc.), Sports Radio, Inc., Noble Broadcast Center,
Inc. and Nobro, relating to the purchase by Jacor Broadcasting of San Diego,
Inc. of the San Diego Property as such agreement may be amended in accordance
with the provisions of Section 6.29.
"San Diego Property" means the office and studio
building, land, towers, equipment, furniture and fixtures, contracts
(including, without limitation, the Mexican Sales Agency Agreement) and
employment agreements of Noble Broadcast of San Diego Sports Radio, Inc.,
Noble Broadcast Center, Inc.
and Nobro.
"Section" means a numbered section of this Agreement,
unless another document is specifically referenced.
"Semi-Annual Anniversary Date" shall mean each date
which occurs six months prior to each Anniversary Date.
"Senior Debt" means, at any time of determination and
without duplication, the sum of all Indebtedness of the Company and its
Subsidiaries other than Subordinated Debt and the aggregate amount of any due
and unpaid interest thereon.
"Senior Leverage Ratio" means at any time of
determination, the ratio of (i) Senior Debt as at the date of determination
to the extent such Indebtedness as of such date of determination would be
classified (or required to be classified) in whole or in part as a liability
in accordance with Agreement Accounting Principles to (ii) Operating Cash
Flow for the four consecutive fiscal quarters then most recently ended, all
calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles consistently applied.
"Senior Leverage Step-Up Period" shall mean any period
of time during which the Company has made a timely request for a leverage
step-up to the Administrative Agent (which verbal request is promptly
followed in writing delivered to each Agent), provided that such period shall
commence on the date such verbal request is made to the Administrative Agent
and end on the earlier to occur of (a) the date which is six months after the
last day of the Citicasters Put Period or (b) cancellation of such request by
the Company.
"Senior Subordinated Note Documents" means the Senior
Subordinated Notes, the Senior Subordinated Note Indenture and all other
instruments, documents and agreements executed in connection therewith as
delivered to the Administrative Agent and approved by the Agents pursuant to
Section 4.1(af) on or before the Closing Date, the terms of which (including,
without limitation, maturity, redemption, amortization, interest,
subordination, premiums, fees, covenants, events of default and remedies)
shall have been approved by the Agents, as the same may be amended, restated,
supplemented or otherwise modified in accordance with Section 6.25.
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<PAGE>
"Senior Subordinated Note Indenture" means the
indenture executed and delivered by the Company pursuant to which the Senior
Subordinated Notes are or will be issued, as approved by the Agents pursuant
to Section 4.1(af) on or before the Closing Date.
"Senior Subordinated Notes" means the Senior
Subordinated Notes due 2006 issued by the Company in an aggregate principal
amount not to exceed $100,000,000 as approved by the Agents on or before the
Closing Date.
"Solvent" as to any Person shall mean that (i) the sum
of the assets of such Person, both at a fair valuation and at present fair
salable value, will exceed its liabilities, including contingent liabilities,
(ii) such Person will have sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (iii)
such Person has not incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature. For purposes of this
definition, "debt" means any liability on a claim, and "claim" means (x) a
right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, or (y) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed at the amount which, in light of all the facts
and circumstances existing at the time, represents the amount which can
reasonably be expected to become an actual or matured liability.
"Station Broadcast Cash Flow" is defined in Section
6.13(c).
"Subordinated Debt" means the collective reference to
(i) Indebtedness of the Company (a) which by its terms is expressly subject
and subordinate to the Obligations and (b) which is not secured by any assets
of the Company or any of its Subsidiaries and (ii) the Citicasters
Subordinated Debt.
"Subsidiary" of any Person means (i) any corporation
more than 50% of the voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person and/or by one or more of
its Subsidiaries and (ii) any partnership, association, joint venture or
other entity in which such Person and/or one or more of its Subsidiaries is
either a general partner or has a 50% or more equity interest at the time.
"Subsidiary Guaranty" means a guaranty in substantially
the form of Exhibit J-1 hereto, duly completed, executed and delivered to the
Administrative Agent by each Subsidiary of the Company (other than the
Excluded Subsidiaries), as the same may be amended or modified and in effect
from time to time.
"Subsidiary Mortgages" means, collectively, (i) the
mortgages in substantially the form of Exhibit C hereto, duly completed,
executed and delivered to the Administrative Agent by Jacor Broadcasting of
Florida, Inc., Jacor Broadcasting of Tampa Bay, Inc., Jacor Broadcasting of
Atlanta, Inc., Jacor Broadcasting of Colorado, Inc., and Jacor Broadcasting
Corporation, covering the real property located in Duval County, Florida,
Hillsborough County, Florida, St. Johns County, Florida, Manatee County,
Florida, Fulton County, Georgia, Douglas County, Colorado, Weld County
Colorado and Warren County, Ohio, Hamilton County, Ohio, respectively, and
(ii) any other mortgage or deed of trust hereafter delivered by a Subsidiary
of the Company pursuant to Section 2.17 or Section 4.1(a)(xiii), as each such
mortgage or deed of trust may be amended, modified, supplemented or restated
and in effect from time to time.
"Subsidiary Pledge Agreements" means, collectively, (i)
a subsidiary primary pledge agreement in the form of Exhibit D-2 hereto, duly
completed, executed and delivered to the Administrative Agent by Jacor
Broadcasting of Atlanta, Inc., (ii) a subsidiary secondary pledge agreement
in the form of
26
<PAGE>
Exhibit D-3 hereto, duly completed, executed and delivered to
the Administrative Agent by each Subsidiary of the Company as required
pursuant to Section 4.1(a)(xi) and (iii) a subsidiary first amended and
restated secondary pledge agreement in the form of Exhibit D-4 hereto, duly
completed, executed and delivered to the Administrative Agent by Jacor
Broadcasting of Atlanta, Inc. and (iv) any other subsidiary pledge agreement
substantially in the form of Exhibit D-2 or D-3 hereto, as the case may be,
duly completed, executed and delivered by a Subsidiary of the Company
pursuant to Section 2.17 or Section 4.1(a)(xi), as the same may be amended,
modified, supplemented or restated from time to time.
"Subsidiary Security Agreement" means a security
agreement in substantially the form of Exhibit E-2 hereto, duly completed,
executed and delivered to the Administrative Agent by each Subsidiary of the
Company (other than the Excluded Subsidiaries) as the same may be amended,
modified, supplemented or restated and in effect from time to time.
"Subsidiary Trademark Agreements" means, collectively,
(i) the subsidiary trademark security agreement in the form of Exhibit N-2
hereto, duly completed, executed and delivered to the Administrative Agent by
Jacor Broadcasting of Tampa Bay, Inc. and (ii) any other subsidiary trademark
security agreement substantially in the form of Exhibit N-2 hereto, duly
completed, executed and delivered by a Subsidiary of the Company pursuant to
Section 2.17 or Section 4.1(a)(xii), as the same may be amended, modified,
supplemented or restated from time to time.
"Surviving Debt" is defined in Section 5.18(b).
"Syndication Agent" means Bank of America Illinois in
its capacity as syndication agent for the Lenders pursuant to Article X, and
not in its individual capacity as a Lender, and any successor Syndication
Agent appointed pursuant to Article X.
"Taxes" is defined in Section 3.2.
"Television Station" means any broadcast television
station or any business primarily engaged in television broadcasting owned by
the Company or any of its Subsidiaries as of the Closing Date or acquired by
the Company or any of its Subsidiaries after the Closing Date and shall
include, without limitation, WTSP in Tampa, Florida and WKRC in Cincinnati,
Ohio.
"Television Swap Acquisition" means an Acquisition
pursuant to which the Company or any of its Subsidiaries acquires a business
primarily engaged in television broadcasting with the intention of
immediately (and in any case not later than 90 days after the date of such
Acquisition) conveying such business to a Person which is not an Affiliate of
the Parent, the Company or any of its Subsidiaries in exchange for a
conveyance to the Company or any of its Subsidiaries of a business primarily
engaged in radio broadcasting.
"Term A Loan Commitment" means, for each Lender, the
obligation of such Lender to make a Term A Loan in a principal amount at any
time not exceeding the amount set forth opposite its name on Schedule I
hereto under the column titled "Term A Loan Commitment".
"Term A Loan Maturity Date" shall mean the Anniversary
Date which occurs seven years after the Closing Date.
"Term A Loans" is defined in Section 2.2(a).
"Term A Notes" means the collective reference to the
several promissory notes, each in substantially the form of Exhibit A-2
hereto, duly completed, executed and delivered to the Administrative Agent by
the Company and payable to the order of each Lender in the amount of its
original Term A Loan Commitment, as each such note may be amended, modified,
supplemented, restated or replaced from time to time.
27
<PAGE>
"Term B Loan Commitment" means, for each Lender, the
obligation of such Lender to make a Term B Loan in a principal amount at any
time not exceeding the amount set forth opposite its name on Schedule I
hereto under the column titled "Term B Loan Commitment".
"Term B Loan Maturity Date" shall mean at any date of
determination, the earliest to occur of (i) the Anniversary Date which occurs
eight years after the Closing Date, (ii) the date which is three months prior
to the Citicasters Subordinated Debt Maturity Date (if the Citicasters
Subordinated Debt is outstanding at such time) and (iii) the date which is
one year prior to the maturity date of any Subordinated Debt (other than the
Citicasters Subordinated Debt), but in no event prior to the Term A Loan
Maturity Date.
"Term B Loans" is defined in Section 2.2(b).
"Term B Notes" means the collective reference to the
several promissory notes, each in substantially the form of Exhibit A-3
hereto, duly completed, executed and delivered to the Administrative Agent by
the Company and payable to the order of each Lender in the amount of its
original Term B Loan Commitment, as each such note may be amended, modified,
supplemented, restated or replaced from time to time.
"Term Loan Payment Date" shall mean any Anniversary
Date and any Semi-Annual Anniversary Date.
"Time Brokerage Assignment" means, with respect to each
Local Marketing Agreement and each Joint Sales Agreement with Noble (or any
Affiliate of Noble), an assignment agreement, substantially in the form of
Exhibit B-2 hereto, providing for the assignment by the Company or a
Subsidiary of the Company, as the case may be, of all of its right, title and
interest in such Local Marketing Agreement and such Joint Sales Agreement, in
favor of the Administrative Agent for the ratable benefit of the Lenders,
duly completed, executed and delivered to the Administrative Agent by the
Company and, subject to Section 4.1(a)(xx), duly acknowledged by the other
party (or parties) to such Local Marketing Agreement or such Joint Sales
Agreement, as the case may be, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"Total Debt" means, at any time of determination and
without duplication, the sum of the aggregate amount of Indebtedness and
Disqualified Capital Stock of the Company and its Subsidiaries as of such
date of determination on a consolidated basis in accordance with Agreement
Accounting Principles and the aggregate amount of any past due and unpaid
interest thereon.
"Transaction Documents" shall mean the Loan Documents,
the Noble Documents, the Citicasters Documents, the Senior Subordinated Note
Documents, the Citicasters Subordinated Debt Indenture, the Citicasters
Subordinated Notes, the Liquid Yield Option Note Documents and the Parent
Contribution Documents.
"Transactions" is defined in Section 4.1(l).
"Transferee" is defined in Section 12.4.
"Unfunded Liabilities" means (i) in the case of Plans
that are not Multiemployer Plans, the amount (if any) by which the present
value of all benefit liabilities (as defined in Section 4001(a) of ERISA)
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefit liabilities, all determined as of the then most recent valuation
date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability of the Parent, the Company and its Subsidiaries.
"Unmatured Default" means an event which but for the
lapse of time or the giving of notice, or both, would constitute a Default.
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<PAGE>
"Warrant Repurchase Cap" means the lesser of (A)
$25,000,000 and (B) the aggregate amount of net cash proceeds received by the
Parent from the issuance by the Parent of capital stock of the Parent and the
Liquid Yield Option Notes from and after June 1, 1996 in excess of
$325,000,000 which excess net cash proceeds have been contributed to the
capital of the Company by the Parent on or after June 1, 1996 (but prior to
the making of any dividend pursuant to Section 6.10(v)) but only to the
extent such excess net cash proceeds have been so contributed.
"Wholly-Owned Subsidiary" means any Subsidiary all of
the outstanding voting securities and other Equity Interests of which shall
at the time be owned and controlled, directly or indirectly, by the Company
and/or one or more Wholly-Owned Subsidiaries.
"Working Capital" shall mean at any time an amount
equal to Current Assets minus Current Liabilities at such time.
"Z/C" means Zell/Chilmark Fund, L.P., a Delaware
limited partnership, and its successors and assigns.
The foregoing definitions shall be equally applicable
to both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
Section 1 REVOLVING LOANS.
(a) From and including the Closing Date to but
excluding the Revolving Loan Termination Date, each Lender severally agrees,
on the terms and subject to the conditions set forth in this Agreement, to
make Loans to the Company from time to time (the "Revolving Loans") in an
aggregate amount outstanding at any time not to exceed its Revolving Loan
Commitment minus (i) such Lender's Pro Rata Share of the L/C Obligations at
such time and (ii) such Lender's Pro Rata Share of any Revolver Reserve and
any Non-broadcast Revolver Reserve in effect at such time; PROVIDED that each
Lender with a Revolving Loan Commitment severally agrees, on the terms and
subject to the conditions set forth in this Agreement (including Section
2.8), to make Revolving Loans in an amount equal to its Pro Rata Share of any
Revolver Reserve and any Non-broadcast Revolver Reserve in effect at such
time. The Revolving Loan Commitment of each Lender shall be automatically
and permanently reduced (i) on each Revolving Loan Commitment Reduction Date
in an amount equal to such Lender's Pro Rata Share of the applicable
Revolving Loan Commitment Reduction Amount for such Revolving Loan Commitment
Reduction Date, (ii) in accordance with the terms and provisions of Section
2.8(h) and (iii) to zero on and after January 1, 1997 if the Closing Date has
not occurred on or prior to December 31, 1996.
(b) The Revolving Loans shall be evidenced by the
Revolving Notes.
(c) The Revolving Loans of each Lender shall be
Floating Rate Loans or, at the Company's option and subject to the terms
hereof, Eurodollar Loans.
(d) Subject to the mandatory repayment
obligations of the Company provided for in this Agreement, the Revolving
Loans shall be repaid to the Lenders in full on the Revolving Loan
Termination Date. Within the limits and subject to the terms and conditions
herein set forth, Revolving Loans may be borrowed, repaid and reborrowed from
time to time.
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<PAGE>
Section 2 TERM LOANS.
(a) TERM A LOANS.
(i) On the Closing Date, each Lender severally
agrees, on the terms and subject to the conditions set forth in this
Agreement, to make a single loan to the Company in a sum requested by the
Company not to exceed the Term A Loan Commitment of such Lender (all such
loans of all of the Lenders collectively, the "Term A Loans"). All
unutilized Term A Loan Commitments shall expire (A) simultaneously with
the making of the Term A Loans on the Closing Date and (B) after December
31, 1996 if the Closing Date has not occurred on or prior to December 31,
1996.
(ii) The Term A Loans shall be evidenced by the Term A
Notes.
(iii) The Term A Loan of each Lender shall be Floating
Rate Loans or, at the Company's option and subject to the terms hereof,
Eurodollar Loans.
(iv) Once repaid, Term A Loans may not be
reborrowed. The Term A Loans shall mature on the Term A Loan Maturity
Date and shall be repaid, without premium or penalty, by the Company, in
amounts equal to the installments set forth below, on each of the Term
Loan Payment Dates specified below for each such installment.
Each Term Amount of
Loan Payment Term A Loan
Date Occurring: Installment
--------------- -----------
After the Anniversary Date which $12,500,000
occurs one year after the Closing
Date but on or prior to the
Anniversary Date which occurs two
years after the Closing Date
After the Anniversary Date which $15,000,000
occurs two years after the Closing
Date but on or prior to the
Anniversary Date which occurs three
years after the Closing Date
After the Anniversary Date which $20,000,000
occurs three years after the
Closing Date but on or prior to the
Anniversary Date which occurs four
years after the Closing Date
After the Anniversary Date which $27,500,000
occurs four years after the Closing
Date but on or prior to the
Anniversary Date which occurs five
years after the Closing Date
After the Anniversary Date which $35,000,000
occurs five years after the Closing
Date but on or prior to the
Anniversary Date which occurs six
years after the Closing Date
The Semi-Annual Anniversary Date $40,000,000
which occurs immediately prior to
the seven year Anniversary Date
The Term A Loan Maturity Date The remaining
outstanding
principal balance of
the Term A Loans
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(b) TERM B LOANS.
(i) On the Closing Date, each Lender severally
agrees, on the terms and subject to the conditions set forth in this
Agreement, to make a single loan to the Company in a sum requested by
the Company not to exceed the Term B Loan Commitment of such Lender
(all such loans of all of the Lenders collectively, the "Term B
Loans"). All unutilized Term B Loan Commitments shall expire (A)
simultaneously with the making of the Term B Loans on the Closing Date
and (B) after December 31, 1996 if the Closing Date has not occurred
on or prior to December 31, 1996.
(ii) The Term B Loans shall be evidenced by the
Term B Notes.
(iii) The Term B Loan of each Lender shall be
Floating Rate Loans or, at the Company's option and subject to the terms
hereof, Eurodollar Loans.
(iv) Once repaid, Term B Loans may not be
reborrowed. The Term B Loans shall mature on the Term B Loan Maturity
Date and shall be repaid, without premium or penalty, by the Company, in
amounts equal to the installments set forth below, on each of the Term
Loan Payment Dates specified below for each such installment.
Each Term Amount of
Loan Payment Term B Loan
Date Occurring: Installment
--------------- -----------
After the Anniversary Date which $500,000
occurs two years after the Closing
Date but on or prior to the
Anniversary Date which occurs six
years after the Closing Date
After the Anniversary Date which $10,000,000
occurs six years after the Closing
Date but on or prior to the
Anniversary Date which occurs seven
years after the Closing Date
The Semi-Annual Anniversary Date $38,000,000
which occurs immediately prior to
the eight year Anniversary Date
The Term B Loan Maturity Date The remaining outstanding
principal balance of
the Term B Loans
Section 3 INTEREST.
(a) The Company agrees to pay interest in respect
of the unpaid principal amount of each Floating Rate Loan from the date of
the making or conversion of such Loan until such Loan shall be paid in full
at a rate per annum equal to the Floating Rate, such interest to be computed
on the basis of a 365- or 366-day year, as appropriate.
(b) The Company agrees to pay interest in respect
of the unpaid principal amount of each Eurodollar Loan from the date of the
making, continuation or conversion of such Loan until such Loan shall be paid
in full at a rate per annum which shall be equal to the Eurodollar Rate, such
interest to be computed on the basis of a 360-day year.
(c) In the event that, and for so long as, any
Default shall have occurred and be continuing, the outstanding principal
amount of all Loans and, to the extent permitted by law, overdue interest in
respect of all
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<PAGE>
Loans, shall bear interest at a rate per annum (the "Default
Rate") equal to the sum of two percent (2%) plus the interest rate otherwise
applicable hereunder to such principal amount in effect from time to time.
(d) Interest on each Loan shall accrue from and
including the date of the borrowing thereof to but excluding the date of any
repayment thereof (provided that any Loan borrowed and repaid on the same day
shall accrue one day's interest) and shall be payable (i) in respect of each
Floating Rate Loan, quarterly in arrears on the last day of each March, June,
September and December of each year, commencing on the last day of the first
calendar quarter ending after the Closing Date, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable to such
Loan and, in the case of an Interest Period of six months, on the date
occurring three months from the first day of such Interest Period and on the
last day of such Interest Period, and (iii) in the case of all Loans, on any
prepayment or conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
Section 4 Applicable Margin. The Applicable Margin
shall be subject to adjustment (upwards or downwards, as appropriate) based
on the Leverage Ratio at the end of each of the first three fiscal quarters
of each fiscal year of the Company and at the end of each fiscal year of the
Company. The Leverage Ratio shall be determined (i) for the period from the
Closing Date until the Company delivers the monthly financial statements
required to be delivered pursuant to Section 6.1(b) for the period ending as
at June 30, 1996, by determining Total Debt on the Closing Date after giving
effect to the making of the Loans and the consummation of the other
Transactions which are consummated on such date and by determining Operating
Cash Flow for the twelve-month period ending April 30, 1996, (ii) in the case
of determinations made with respect to the first three fiscal quarters of the
Company's fiscal year thereafter, by reference to the monthly financial
statements for the month ending on the last day of such fiscal quarter and
the Compliance Certificate for such fiscal quarter delivered pursuant to
Sections 6.1(b) and (d) and (iii) in the case of determinations made with
respect to the last fiscal quarter of the Company's fiscal year, by reference
to the financial statements and Compliance Certificate delivered by the
Company pursuant to Sections 6.1(a) and (d), provided that for the purposes
of clauses (i), (ii) and (iii) above, for all periods prior to the purchase
of the Noble Stock pursuant to the Noble Stock Purchase and Warrant
Redemption Agreement, all calculations shall be made on a combined pro forma
basis (excluding the Noble Denver Stations other than, to the extent
applicable, the Noble Denver Stations which are subject to a Local Marketing
Agreement) as if such Noble Stock had been purchased on or prior to the first
day of such period, all as certified to by an Authorized Officer of the
Company, and attaching to such certificate, combined pro forma financial
statements in support of such calculations. The adjustment, if any, to the
Applicable Margin shall be effective commencing on the fifth Business Day
after the delivery of such monthly financial statements (for the last month
of each fiscal quarter of the Company) or annual financial statements and
Compliance Certificate and shall be effective only for the period subsequent
to such date. In the event that the Company shall at any time fail to
furnish to the Lenders the financial statements and Compliance Certificate
required to be delivered pursuant to Section 6.1(a), (b) or (d), the maximum
Applicable Margin shall apply until such time as such financial statements
and Compliance Certificate are so delivered to the Administrative Agent.
Applicable Margin
----------------------------------------------------
Revolving Loans/
Term A Loans Term B Loans
---------------------- ------------------------
Floating Eurodollar Floating Eurodollar
Leverage Ratio Rate Rate Rate Rate
---------- ---------- ---------- -----------
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<PAGE>
Greater than or 1.375% 2.625% 1.875% 3.125%
equal to 6.5:1.0
Less than 6.5:1.0 1.250% 2.500% 1.750% 3.000%
but greater than or
equal to 6.0:1.0
Less than 6.0:1.0 1.000% 2.250% 1.500% 2.750%
but greater than or
equal to 5.5:1.0
Less than 5.5:1.0 0.750% 2.000% 1.250% 2.500%
but greater than or
equal to 5.0:1.0
Less than 5.0:1.0 0.500% 1.750% 1.250% 2.500%
but greater than or
equal to 4.5:1.0
Less than 4.5:1.0 0.250% 1.500% 1.250% 2.500%
but greater than or
equal to 4.0:1.0
Less than 4.0:1.0 0.000% 1.250% 1.250% 2.500%
but greater than or
equal to 3.5:1.0
Less than 3.5:1.0 0.000% 1.000% 1.250% 2.500%
but greater than or
equal to 3.0:1.0
Less than 3.0:1.0 0.000% 0.750% 1.250% 2.500%
Section 5 BORROWING NOTICE. Whenever the Company
desires to borrow Revolving Loans, Term A Loans or Term B Loans hereunder, it
shall give the Administrative Agent at or prior to 10:00 A.M., New York time,
at least one Business Day's prior facsimile or telephonic notice (promptly
confirmed in writing) of each Floating Rate Loan, and at least three Business
Days' prior facsimile or telephonic notice (promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder. Each such notice (a "Borrowing
Notice") shall be irrevocable and shall specify (i) the aggregate principal
amount of the requested Loans, (ii) whether such Loans shall be Revolving
Loans, Term A Loans or Term B Loans, (iii) the date of borrowing (which shall
be a Business Day), and (iv) whether such Loans shall consist of Floating
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. Promptly after its receipt of a Borrowing
Notice, the Administrative Agent shall provide each Lender with a copy
thereof and inform each Lender as to its Pro Rata Share of the Advance
requested thereunder.
Section 6 DISBURSEMENT OF FUNDS.
(a) No later than noon, New York time, on the
date specified in each Borrowing Notice, each Lender will make available its
Pro Rata Share of the Advance requested to be made on such date, in U.S.
dollars and immediately available funds, to the Administrative Agent. After
the Administrative Agent's receipt of the proceeds of such Loans, the
Administrative Agent will make available to the Company the aggregate of the
amounts so made available in the type of funds actually received.
(b) Unless the Agent shall have been notified by
any Lender prior to the date of a borrowing that such Lender does not intend
to make available to the Administrative Agent its portion of the Loans to be
made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Company a corresponding amount. If such
corresponding amount
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is not in fact made available to the Administrative Agent by such Lender and
the Administrative Agent has made such amount available to the Company, the
Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Company and the Company shall
immediately repay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or
the Company, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Company to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to, with respect to the Company, the then applicable rate of
interest, calculated in accordance with Section 2.3, for the respective Loans
and with respect to the Lenders, the Federal Funds Rate. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Company may have
against any Lender as a result of any default by such Lender hereunder.
Notwithstanding anything contained herein or in any other Loan Document to
the contrary, the Administrative Agent may apply all funds received from the
Company and proceeds of Collateral available for the payment of any
Obligations first to repay any amount owing by any Lender to the
Administrative Agent as a result of such Lender's failure to fund its Loans
hereunder.
Section 7 INTEREST PERIODS, ETC.
(a) The Company shall, in each Borrowing Notice
or Conversion/Continuation Notice in respect of the making of, conversion
into or continuation of a Eurodollar Loan, select the interest period (each
an "Interest Period") applicable to such Eurodollar Loan, which Interest
Period shall, at the option of the Company, be either a one-month, two-month,
three-month or six-month period, provided that:
(i) the initial Interest Period for any
Eurodollar Loan shall commence on the date of the making of such Loan
(including the date of any conversion from a Floating Rate Loan) and each
Interest Period occurring thereafter in respect of such Loan shall commence
on the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, PROVIDED, HOWEVER, that if any
Interest Period would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs
in such month, such Interest Period shall expire on the next preceding
Business Day;
(iii) if any Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) no Interest Period in respect of any
Revolving Loan, Term A Loan or Term B Loan shall extend beyond the
Revolving Loan Termination Date, Term A Loan Maturity Date or the Term B
Loan Maturity Date, as the case may be; and
(v) no Interest Period applicable to any
Revolving Loan, any Term A Loan or any Term B Loan shall extend beyond any
Revolving Loan Commitment Reduction Date, any date upon which a repayment
of the Term A Loans is required to be made pursuant to Section 2.2(a) or
any date upon which a repayment of the Term B Loans is required to be made
pursuant to Section 2.2(b), respectively, unless the aggregate principal
amount of Revolving Loans, Term A Loans or Term B Loans, respectively,
repre-
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sented by Floating Rate Loans or by Eurodollar Loans having Interest
Periods which will not expire on or before such date equals or is less than
the amount of the Revolving Loan Commitment, the Term A Loans or the Term B
Loans, respectively, in effect or outstanding, as the case may be,
immediately after the Revolving Loan Commitment Reduction Date, any such
date upon which a repayment of the Term A Loans is required to be made
pursuant to Section 2.2(a) or any such date upon which a repayment of the
Term B Loans is required to be made pursuant to Section 2.2(b),
respectively.
(b) If upon the expiration of any Interest Period,
the Company has failed to repay the Eurodollar Loans expiring on such day
or has failed to elect a new Interest Period to be applicable to the
respective Eurodollar Loan as provided above, the Company shall be deemed
to have elected to convert such Eurodollar Loans into Floating Rate Loans
effective as of the expiration date of such current Interest Period.
(c) Notwithstanding anything contained herein to
the contrary, the Company may not borrow any Eurodollar Loan if, at the
time of such borrowing, a Default or Unmatured Default shall have occurred
and be continuing on such date either before or after giving effect to such
Borrowing.
Section 8 MANDATORY PRINCIPAL PAYMENTS.
(a) If on any day the aggregate principal amount
of the Revolving Loans plus the aggregate L/C Obligations then outstanding
exceeds the Aggregate Revolving Loan Commitment minus the aggregate amount
of any Revolver Reserve and any Non-broadcast Revolver Reserve in effect at
such time, the Company shall immediately repay the Revolving Loans in an
amount equal to such excess. In addition, to the extent at any time and
for any reason, the Aggregate Revolving Loan Commitment minus the aggregate
amount of Revolving Loans outstanding at such time minus any Revolver
Reserve and any Non-broadcast Revolver Reserve in effect at such time is
at any time less than the amount of contingent L/C Obligations outstanding
at such time, the Company shall Cash Collateralize the L/C Obligations in
an amount equal to the amount by which such L/C Obligations exceed such
Aggregate Revolving Loan Commitment.
(b) (i) Promptly, but in any event within two
Business Days after the sale, transfer or other disposition by the Parent,
the Company or any of its Subsidiaries after the Closing Date (including,
without limitation, any disposition accomplished by way of a merger,
consolidation or a series of transactions) of any property, asset or
business (including, without limitation, any Radio Station) to any Person
other than the Company or any of its Subsidiaries (excluding any sale,
transfer or other disposition of (A) inventory in the ordinary course of
business, (B) used, worn-out or obsolete equipment no longer useful to the
business in the ordinary course of business to the extent that an amount
equal to the net cash proceeds realized therefrom is used to purchase
replacement or substitute equipment within 180 days and (C) any
Non-broadcast Asset), and including any sale or other transfer or issuance
of any Equity Interests of any Subsidiary of the Company, whether by the
Company or a Subsidiary thereof, the Company shall make a mandatory payment
in respect of the Obligations in an amount equal to 100% of the net cash
proceeds (after taxes, reasonable fees and commissions and reasonable and
customary expenses incurred directly in connection therewith) realized from
such sales, transfers, issuances or other dispositions occurring after the
Closing Date, all as certified to by an Authorized Officer of the Company
(collectively, "Net Cash Proceeds") in accordance with the terms of this
Section 2.8(b)(i); provided that, if any Cash Equivalents are received as
proceeds from any such sale, transfer, issuance or other disposition, the
Parent, the Company or such Subsidiary, as the case may be, shall cause all
such Cash Equivalents to be converted into or reduced to cash within two
Business Days after the date of any such sale, transfer, issuance or other
disposition and all such cash proceeds of such Cash Equivalents shall be
deemed to be "Net Cash Proceeds" for all purposes of this
Section 2.8(b)(i). The Company shall apply such Net Cash Proceeds within
such two Business Days as set forth above to repay the principal amount of
the Revolving Loans outstanding
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<PAGE>
at such time to the extent such Net Cash Proceeds are not reinvested in a
Permitted Acquisition (other than notes, bonds, obligations and securities
(other than securities that represent a controlling interest in the Capital
Stock of an entity acquired pursuant to a Permitted Acquisition)) and a
corresponding reserve against the Aggregate Revolving Loan Commitment in an
amount equal to the Net Cash Proceeds applied to the Revolving Loans (the
"Revolver Reserve") shall be created; PROVIDED that if no Revolving Loans
are outstanding on such date or if the amount of the Net Cash Proceeds so
received exceeds the amount of Revolving Loans outstanding on such date,
then the Company may, so long as no Default shall have occurred and be
continuing, retain such proceeds in an amount equal to the excess of the
Net Cash Proceeds over the Revolving Loans then outstanding until such
proceeds are reinvested in accordance with the terms of this Section
2.8(b)(i); PROVIDED that if a Default shall have occurred and be continuing
on or after the date such excess proceeds would have been required to have
been applied to repay the Revolving Loans, the Company shall apply such
excess proceeds to repay the Obligations in accordance with Section 2.8(h).
During the Proceeds Application Period, the Company may provide one or
more Borrowing Notices of Revolving Loans to the Administrative Agent in
accordance with Section 2.5 which shall specify that the proceeds of such
Revolving Loans will be invested in a Permitted Acquisition (as all or a
portion of the purchase price thereof), and subject to and upon the terms
and conditions set forth in this Agreement (including without limitation,
Section 4.2) the Lenders shall make such Revolving Loans in accordance with
Section 2.1 in an aggregate amount necessary to finance such Permitted
Acquisition in an amount not greater than the Revolver Reserve then in
effect and the Revolver Reserve shall be reduced during the Proceeds
Application Period each time a Revolving Loan is made in accordance with
this Section 2.8(b)(i) by the amount of such Revolving Loan; PROVIDED that,
should the Proceeds Application Period have expired before such a Revolving
Loan is made with respect to the applicable portion of the Revolver Reserve
as set forth above in this Section 2.8(b)(i), then an amount equal to such
applicable portion of the Revolver Reserve (as adjusted as described above)
shall be applied to prepay the Obligations in accordance with the
provisions of Section 2.8(h) and Section 2.8(b)(iii). If any Net Cash
Proceeds are retained by the Company as provided above, then to the extent
such Net Cash Proceeds are not applied within the Proceeds Application
Period to a Permitted Acquisition, the Company shall apply such Net Cash
Proceeds to repay the Obligations in accordance with the provisions of
Section 2.8(h). Upon expiration of the Proceeds Application Period, any
unused Net Cash Proceeds amounts shall constitute Net Cash Proceeds and
shall be applied as a mandatory prepayment of the Obligations in accordance
with Section 2.8(h) and Section 2.8(b)(iii).
(ii) Promptly, but in any event within two
Business Days after the sale, transfer or other disposition by the Parent,
the Company or any of its Subsidiaries after the Closing Date (including,
without limitation, any disposition accomplished by way of a merger,
consolidation or a series of transactions) of any Non-broadcast Asset to
any Person other than the Company or any of its Subsidiaries, the Company
shall make a mandatory payment in respect of the Obligations in an amount
equal to 100% of the net cash proceeds (after taxes, reasonable fees and
reasonable and customary expenses incurred directly in connection
therewith) realized from such sales, transfers or other dispositions
occurring after the Closing Date, all as certified to by an Authorized
Officer of the Company (collectively, "Net Non-broadcast Proceeds") in
accordance with the terms of this Section 2.8(b)(ii); provided that, if
any Cash Equivalents are received as proceeds from any such sale, transfer
or other disposition, the Parent, the Company or such Subsidiary, as the
case may be, shall cause all such Cash Equivalents to be converted into or
reduced to cash within two Business Days after the date of any such sale,
transfer or other disposition and all such cash proceeds of such Cash
Equivalents shall be deemed to be "Net Non-broadcast Proceeds" for all
purposes of this Section 2.8(b)(ii). The Company shall apply such Net
Non-broadcast Proceeds within such two Business Days as set forth above
to repay the principal amount of
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the Revolving Loans outstanding at such time to the extent such and a
corresponding reserve against the Aggregate Revolving Loan Commitment in
an amount equal to the Net Non-broadcast Proceeds applied to the Revolving
Loans (the "Non-broadcast Revolver Reserve") shall be created; PROVIDED
that if no Revolving Loans are outstanding on such date or if the amount
of the Net Non-broadcast Proceeds so received exceeds the amount of
Revolving Loans outstanding on such date, then the Company may, so long as
no Default shall have occurred and be continuing, retain such proceeds in
an amount equal to the excess of the Net Non-broadcast Proceeds over the
Revolving Loans then outstanding until such proceeds are reinvested in
accordance with the terms of this Section 2.8(b)(ii); PROVIDED that if a
Default shall have occurred and be continuing on or after the date such
excess proceeds would have been required to have been applied to repay the
Revolving Loans, the Company shall apply such excess proceeds to repay the
Obligations in accordance with Section 2.8(h). During the Non- broadcast
Proceeds Application Period, the Company may provide one or more Borrowing
Notices of Revolving Loans to the Administrative Agent in accordance with
Section 2.5 which shall specify that the proceeds of such Revolving Loans
will be invested in a Permitted Non-broadcast Proceeds Application (as all
or a portion of the purchase price thereof), and subject to and upon the
terms and conditions set forth in this Agreement (including without
limitation, Section 4.2) the Lenders shall make such Revolving Loans in
accordance with Section 2.1 in an aggregate amount necessary to finance
such Permitted Non- broadcast Proceeds Application in an amount not
greater than the Non- broadcast Revolver Reserve then in effect and the
Non-broadcast Revolver Reserve shall be reduced during the Non-broadcast
Proceeds Application Period each time a Revolving Loan is made in
accordance with this Section 2.8(b)(ii) by the amount of such Revolving
Loan; PROVIDED that, should the Non-broadcast Proceeds Application Period
have expired before such a Revolving Loan is made with respect to the
applicable portion of the Non-broadcast Revolver Reserve as set forth
above in this Section 2.8(b)(ii), then an amount equal to such applicable
portion of the Non-broadcast Revolver Reserve (as adjusted as described
above) shall be applied to prepay the Loans in accordance with the
provisions of Section 2.8(h) and Section 2.8(b)(iii). If any Net
Non-broadcast Proceeds are retained by the Company as provided above, then
to the extent such Net Non-broadcast Proceeds are not applied within the
Non-broadcast Proceeds Application Period to a Permitted Non-broadcast
Proceeds Application, the Company shall apply such excess Net
Non-broadcast Proceeds to prepay the Obligations in accordance with the
provisions of Section 2.8(h). Upon expiration of the Non-broadcast
Proceeds Application Period, any unused Net Non- broadcast Proceeds
amounts shall constitute Net Non-broadcast Proceeds and shall be applied
as a mandatory prepayment of the Obligations in accordance with Section
2.8(h) and Section 2.8(b)(iii).
(iii) If the Revolver Reserve or the
Non-broadcast Revolver Reserve is to be applied as provided in this Section
2.8(b) as a mandatory prepayment in accordance with Section 2.8(h), the
Company shall be deemed to have requested Revolving Loans in an amount
equal to the Revolver Reserve or the Non-broadcast Revolver Reserve, as the
case may be, and such Loans shall be made regardless of any failure of the
Company to meet the conditions precedent set forth in Section 4.2.
(c) Within two Business days of the receipt by the
Parent, the Company or any of its Subsidiaries of any proceeds from the Mexican
Guaranty, the Company shall make a mandatory prepayment with respect to the
Obligations in an amount equal to 100% of the net cash proceeds (after taxes,
reasonable fees and reasonable expenses incurred directly in connection
therewith)
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realized from such Mexican Guaranty, all as certified to by an Authorized
Officer of the Company (the "Mexican Guaranty Proceeds"). Any prepayment of the
Obligations pursuant to this subsection (c) shall be applied as set forth in
subsection (h) below.
(d) Within seven Business Days of the receipt by the
Company or any of its Subsidiaries of any Debt Cash Proceeds, the Company shall
make a mandatory prepayment with respect to the Obligations in an amount equal
to 50% of such Debt Cash Proceeds in excess of $100,000,000 in the aggregate;
provided that if a Default shall have occurred and be continuing on the date any
Debt Cash Proceeds are received or on the date any Indebtedness with respect
thereto is issued or would result from the issuance of any such Indebtedness,
then the Company shall make a mandatory prepayment with respect to the
Obligations in an amount equal to 100% of such Debt Cash Proceeds (irrespective
of the $100,000,000 limitation). Any prepayment of the Obligations pursuant to
this subsection (d) shall be applied as set forth in subsection (h) below.
(e) Within 90 days of the end of any fiscal year of
the Company, commencing with the fiscal year ending December 31, 1997, the
Company shall make a mandatory prepayment with respect to the Obligations in an
amount equal to 50% of the Excess Cash Flow of the Company, PROVIDED, HOWEVER,
with respect to Excess Cash Flow, no such mandatory prepayment shall be required
if, for the two consecutive quarters ending on the last day of such fiscal year
(i) the Leverage Ratio shall have been less than 5.5 to 1.00 and (ii) the Senior
Leverage Ratio shall have been less than 4.0 to 1.00. Any prepayment of the
Obligations pursuant to this subsection (e) shall be applied as set forth in
subsection (h) below.
(f) For the purposes of determining Net Cash Proceeds,
Net Non- broadcast Proceeds, Mexican Guaranty Proceeds and Debt Cash Proceeds,
the Parent, the Company or any of its Subsidiaries shall be deemed to have
received in cash the aggregate amount of all payments received by the Parent,
the Company or any of its Subsidiaries on any contract, promissory note or other
instrument taken or effected in connection with any sale, transfer or other
disposition of any property asset or business or equity securities, as the case
may be, at the time such cash payment is received.
(g) The Company shall make a mandatory payment with
respect to the Obligations in an amount equal to any proceeds received by the
Parent, the Company or any of its Subsidiaries from casualty, damage, boiler,
machinery and business interruption insurance or from any condemnation claim or
award if and to the extent that such proceeds, claims or awards are not promptly
applied to the restoration, repair or replacement of the properties so affected,
and in any event to the extent that such proceeds, claims or awards have not
been so applied in full within 180 days of receipt thereof. Within two Business
Days of receipt of any tax refund by the Parent, the Company or any of its
Subsidiaries, the Company shall make a mandatory payment with respect to the
Obligations in an amount equal to any proceeds from such tax refund. Any
prepayment of the Obligations pursuant to this subsection (g) shall be applied
as set forth in subsection (h) below.
(h) Mandatory payments made pursuant to subsections
(b) (except as otherwise provided therein), (c), (d), (e) and (g) of this
Section 2.8 shall be applied FIRST to prepay the Term A Loans and the Term B
Loans pro rata based on the aggregate outstanding principal amount of Term A
Loans and Term B Loans on the date such prepayment is made until such Term A
Loans and Term B Loans shall have been repaid in full, together with accrued and
unpaid interest thereon, SECOND, to prepay the Revolving Loans until such
Revolving Loans shall have been repaid in full, together with accrued and unpaid
interest thereon, THIRD, to Cash Collateralize the then outstanding Letters of
Credit, FOURTH, to all other outstanding Obligations. Simultaneously with any
prepayment of the principal amount of the Revolving Loans pursuant to the
preceding sentence, each Lender's Revolving Loan Commitment shall be permanently
reduced by such Lender's Pro Rata Share of such prepayment. All prepayments of
the Term A Loans and Term B Loans shall be applied pro rata to
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the scheduled installments of principal thereof. With respect to any such
mandatory reduction of the Revolving Loan Commitment, the Revolving Loan
Commitment Reduction Amount for each Revolving Loan Commitment Reduction Date
occurring after the date of such mandatory payment shall be reduced in an amount
equal to the product of the amount of such mandatory reduction TIMES the ratio
(expressed as a percentage) that such Revolving Loan Commitment Reduction Amount
bears to the sum of all of the Revolving Loan Commitment Reduction Amounts
remaining prior to the Revolving Loan Termination Date.
(i) Mandatory payments made pursuant to this Section
2.8 of the Term A Loans, the Term B Loans or the Revolving Loans shall be
accomplished by the payment first of such Loans or portion thereof constituting
Floating Rate Loans and second by the payment of such Loans or portion thereof
constituting Eurodollar Loans.
Section 9 OPTIONAL PRINCIPAL PAYMENTS AND REDUCTIONS OF COMMITMENTS.
(a) The Company may from time to time pay all
outstanding Floating Rate Advances, or, in a minimum aggregate amount of
$1,000,000, or any integral multiple of $500,000 in excess thereof, any portion
of the outstanding Floating Rate Advances, upon one Business Day's prior notice
to the Administrative Agent as described below, without penalty or premium. The
Company may from time to time pay all outstanding Eurodollar Advances, or, in a
minimum aggregate amount of $1,000,000, or any integral multiple of $500,000 in
excess thereof, any portion of the outstanding Eurodollar Advances, upon three
Business Days' prior written notice to the Administrative Agent as described
below, provided, however, (i) such optional prepayment shall only be made on the
last day of the Interest Period relevant to such Eurodollar Advances, and (ii)
after giving effect to such optional prepayment, each outstanding Eurodollar
Advance shall be in a minimum amount of $1,500,000. Any such notice given by
the Company to the Administrative Agent shall be written notice (or telephonic
notice promptly confirmed in writing), which notice shall be irrevocable, and
shall specify the amount of such prepayment and whether such Loans being prepaid
are Revolving Loans or Term A Loans and Term B Loans and whether such Advances
being prepaid are Floating Rate Advances or Eurodollar Advances. All such
prepayments of the Term A Loans and the Term B Loans shall be applied pro rata
to the scheduled repayments thereof. All prepayments made pursuant to this
Section 2.9(a) which are not designated by the Company in the notice required to
be delivered pursuant to this Section 2.9(a) to be applied to the Term A Loans
or the Term B Loans shall be applied to the Revolving Loans. All prepayments
made pursuant to this Section 2.9(a) which are not applied to repay the
Revolving Loans in accordance with the terms of this Section 2.9(a) shall be
applied to prepay the Term A Loans and the Term B Loans pro rata based on the
aggregate outstanding principal amount of Term A Loans and Term B Loans on the
date such prepayment is made.
(b) Upon at least one Business Day's prior irrevocable
written notice to the Administrative Agent (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), the Company shall have
the right, without premium or penalty, to permanently reduce each Lender's Pro
Rata Share of the Aggregate Revolving Loan Commitment, provided that any such
partial reduction shall be in a minimum aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and each such reduction shall
be applied pro rata to reduce the Revolving Loan Commitment Reduction Amount for
each Revolving Loan Commitment Reduction Date.
Section 10 METHOD AND PLACE OF PAYMENT.
(a) Except as otherwise specifically provided herein,
all payments and prepayments under this Agreement and the Notes shall be made to
the Administrative Agent for the account of the Lenders entitled thereto not
later than 12:00 noon, New York time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
the Administrative Agent's office specified pursuant to Article XIII, and any
funds received by the Administrative Agent after such time shall, for all
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purposes hereof (including the following sentence), be deemed to have been paid
on the next succeeding Business Day. Except as otherwise specifically provided
herein, the Administrative Agent shall thereafter cause to be distributed on the
date of receipt thereof to each Lender in like funds its Pro Rata Share of
payments so received.
(b) Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
(c) All payments made by the Company hereunder and
under the other Loan Documents shall be made irrespective of, and without any
reduction for, any setoff or counterclaims.
Section 11 FEES.
(a) The Company agrees to pay to the Administrative
Agent for the account of the Persons entitled thereto, fees in the amounts and
at the times set forth in the Fee Letters.
(b) The Company agrees to pay to the Administrative
Agent for the pro-rata account of the Lenders in accordance with their
respective Pro Rata Shares of the Revolving Loan Commitments a commitment fee,
computed at the Commitment Fee Rate on the average daily unused portion of the
Aggregate Revolving Loan Commitment accruing from the Effective Date until the
Aggregate Revolving Loan Commitment has been terminated, payable quarterly in
arrears and on the Revolving Loan Termination Date, or such earlier date, if
any, on which the Aggregate Revolving Loan Commitment shall terminate in
accordance with the terms hereof and calculated on the basis of a 365- or
366-day year, as appropriate, for the number of actual days elapsed.
Section 12 NOTES; RECORDKEEPING. Each Lender is hereby
authorized to record the principal amount of its Revolving Loans, its Term A
Loan and its Term B Loan and each repayment thereof on the schedule attached to
its applicable Note or to record the same on its books and records and the
Company agrees that such schedules or books and records shall constitute binding
and conclusive evidence of the accuracy of the information contained therein
absent manifest error, provided, however, that the failure of any Lender to so
record such information shall not affect the Company's obligations hereunder or
under such Notes.
Section 13 MINIMUM ADVANCES. Each Floating Rate Advance
shall be in a minimum amount of $1,000,000 or in an integral multiple of
$500,000 in excess thereof, provided, that any Floating Rate Advance may be in
the amount of the unused Aggregate Revolving Loan Commitment. Each Eurodollar
Rate Advance and all conversions to and continuations of Eurodollar Loans shall
be in a minimum amount of $2,000,000 or in an integral multiple of $1,000,000 in
excess thereof, PROVIDED that at no time may there be more than fifteen (15)
Eurodollar Rate Advances outstanding at any time.
Section 14 EURODOLLAR RATE CONVERSION AND CONTINUATION.
(a) Subject to the other provisions hereof, the
Company shall have the option (i) to convert at any time all or any part of
outstanding Floating Rate Loans which comprise part of the same Advance to
Eurodollar Loans, (ii) to convert all or any part of outstanding Eurodollar
Loans which comprise part of the same Advance to Floating Rate Loans, on the
expiration date of the Interest Period applicable thereto, or (iii) to continue
all or any part of outstanding Eurodollar Loans which comprise part of the same
Advance as Eurodollar Loans for an additional Interest Period, on the expiration
of the Interest Period applicable thereto; PROVIDED that no Loan may be
continued as, or converted into, a Eurodollar Loan when any Default or Unmatured
Default has occurred and is continuing.
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(b) In order to elect to convert or continue a Loan
under this Section 2.14, the Company shall deliver an irrevocable notice thereof
(a "Conversion/Continuation Notice") to the Administrative Agent no later than
10:00 A.M., New York time, (i) at least one Business Day in advance of the
proposed conversion date in the case of a conversion to a Floating Rate Loan and
(ii) at least three Business Days in advance of the proposed conversion or
continuation date in the case of a conversion to, or a continuation of, a
Eurodollar Loan. A Conversion/Continuation Notice shall specify (w) the
requested conversion or continuation date (which shall be a Business Day), (x)
the amount and the type of Loan to be converted or continued, (y) whether a
conversion or continuation is requested, and (z) in the case of a conversion to,
or a continuation of, a Eurodollar Loan, the requested Interest Period.
Promptly after receipt of a Conversion/Continuation Notice under this Section
2.14(b), the Administrative Agent shall provide each Lender with a copy thereof.
Section 15 LENDING OFFICES. Each Lender may book all or
any portion of any Loan at any Lending Office selected by such Lender and may
change its Lending Office from time to time. All terms of this Agreement shall
apply to any such Lending Office and the Notes shall be deemed held by each
Lender for the benefit of such Lending Office. Each Lender may, by written or
telex notice to the Administrative Agent and the Company, designate a Lending
Office through which and for whose account payments in respect of the
Obligations are to be made.
Section 16 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the
Company notifies the Administrative Agent prior to the date on which it is
scheduled to make payment to the Administrative Agent of a payment of principal,
interest or fees to the Administrative Agent for the account of the Lenders that
it does not intend to make such payment, the Administrative Agent may assume
that such payment has been made. The Administrative Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If the Company has not in fact made
such payment to the Administrative Agent, the recipient of such payment shall,
on demand by the Administrative Agent, repay to the Administrative Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate.
Section 17 COLLATERAL SECURITY.
(a) As security for the payment of the Obligations,
the Company shall cause to be granted to the Administrative Agent, for the
ratable benefit of the Lenders, a Lien on and security interest in all of the
following, whether now or hereafter existing or acquired: (i) all of the shares
of capital stock of its Subsidiaries now or hereafter directly owned by the
Company and all proceeds thereof, all as more specifically described in the
Company Pledge Agreement; (ii) certain of the assets of the Company and all
proceeds thereof, all as more specifically described in the Company Security
Agreement, the Company Trademark Agreement, the Company Mortgages, the Noble
Document Assignment, the Citicasters Document Assignment, the Mexican Assignment
Agreement, and the Time Brokerage Assignment and each Collateral Assignment to
which the Company is a party; (iii) certain of the assets of its Subsidiaries
now or hereafter directly or indirectly owned by such Subsidiaries and all
proceeds thereof, all as more specifically described in the Subsidiary Security
Agreement, the Subsidiary Trademark Agreement, the Subsidiary Pledge Agreements,
the Subsidiary Mortgages, the Time Brokerage Assignment and each Collateral
Assignment to which each Subsidiary of the Company is a party; and (iv) certain
assets of the Parent, including without limitation, the shares of capital stock
of the Company and all the proceeds thereof, all as more specifically described
in the Parent Pledge Agreement.
(b) Concurrently with the consummation of any
Permitted Acquisition or the formation of any new Subsidiary of the Company
which is permitted hereunder, the Company shall
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(i) in the case of a Permitted Acquisition of
stock by the Company or any of its Subsidiaries or the formation of a new
Subsidiary of the Company: (A) deliver or cause to be delivered to the
Administrative Agent all of the certificates representing the capital stock
(or other instruments or securities evidencing ownership) of such new
Subsidiary which is being acquired or formed, beneficially owned by the
Company or such Subsidiary, as additional collateral for the Obligations,
to be held by the Administrative Agent in accordance with the terms of the
Company Pledge Agreement or a Subsidiary Pledge Agreement, as the case may
be; and (B) cause such new Subsidiary which is being acquired or formed to
deliver to the Administrative Agent (1) duly executed counterpart signature
pages to each of the Subsidiary Guaranty, the Subsidiary Security Agreement
and the Intercompany Security Agreement, in the forms attached respectively
thereto as Annex I, together with the authorization to the Administrative
Agent and the Lenders to attach such signature pages to the Subsidiary
Guaranty, the Subsidiary Security Agreement and the Intercompany Security
Agreement, respectively, the effect of which shall be that as of the date
set forth on such signature pages such new Subsidiary shall become a party
to each such agreement and be bound by the terms thereof, (2) if such
Subsidiary owns any capital stock of any other Subsidiary of the Company, a
Subsidiary Pledge Agreement, (3) if such Subsidiary owns any U.S.
registered trademarks, a Subsidiary Trademark Agreement, (4) an
Intercompany Demand Note, duly endorsed, pledged and delivered to the
Administrative Agent under the Company Pledge Agreement, (5) such Uniform
Commercial Code financing statements as shall be required to perfect the
security interest of the Administrative Agent and the Lenders in the
Collateral being pledged by such new Subsidiary pursuant to the Subsidiary
Security Agreement and (6) unless otherwise agreed to in writing by the
Required Lenders, a Subsidiary Mortgage, together with such title insurance
policies, surveys and appraisals as the Required Lenders may have
reasonably requested;
(ii) in the case of a Permitted Acquisition of
assets or the acquisition of any interest in real property (other than any
such property deemed immaterial by the Administrative Agent) by the Company
or any of its Subsidiaries, deliver or cause to be delivered by the Company
or such Subsidiary acquiring such assets, (A) such Uniform Commercial Code
financing statements as shall be required to perfect the security interest
of the Administrative Agent and the Lenders in the assets being so acquired
and (B) unless otherwise agreed to in writing by the Required Lenders, a
Company Mortgage or Subsidiary Mortgage, as the case may be, together with
such title insurance policies, surveys and appraisals as the Required
Lenders may have reasonably requested; and
(iii) in any case, provide such other
documentation, including, without limitation, one or more opinions of
counsel reasonably satisfactory to the Required Lenders, articles of
incorporation, by-laws and resolutions, which in the reasonable opinion of
the Required Lenders is necessary or advisable in connection with such
Permitted Acquisition or formation of such new Subsidiary.
Section 18 FURTHER ASSISTANCE. In connection with any
exercise by the Administrative Agent or any Lender of its rights and remedies
under the Collateral Documents, it may be necessary to obtain the prior consent
or approval of certain Persons, including but not limited to the FCC and other
public utility regulatory agencies and governmental authorities. Upon the
exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to any Collateral Document, applicable law or
otherwise which requires any consent, approval, registration, qualification or
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authorization of any Person, the Company will, upon request by the
Administrative Agent, execute and deliver, or will cause the execution and
delivery of, all applications, certificates, instruments, and other documents
and papers that the Administrative Agent or such Lender determines may be
required to obtain for such consent, approval, registration, qualification or
authorization. Without limiting the generality of the foregoing, the Company
will use its best efforts to obtain from the appropriate Persons the necessary
consents and approvals, if any: (1) for the transfer of control, if required
for the effectuation of clause (2) below, to the Administrative Agent, the
Lenders or their respective nominees or transferees upon the occurrence of a
Default, of any permit, license or authorization in respect of the operation of
any Radio Station; (2) for the effectuation of any sale or sales of Pledged
Stock (as defined in the Parent Pledge Agreement, the Company Pledge Agreement
and/or the Subsidiary Pledge Agreements) upon the occurrence of a Default; and
(3) for the exercise of any other right or remedy of the Administrative Agent or
any Lender under any Collateral Document, applicable law or otherwise. The
Administrative Agent and the Lenders will cooperate with the Company in
preparing the filing with the FCC and any other Persons of all requisite
applications required to be obtained by the Company under this Section 2.18.
Section 19 USE OF PROCEEDS. The Company shall use the
proceeds of the Loans for the following purposes: (i) to fund a portion of the
acquisition of Citicasters, (ii) to repay Citicasters Existing Debt of
Citicasters Co., (iii) to redeem (if necessary) the Citicasters Subordinated
Debt and (iv) to fund the consummation of the Noble Transactions. In addition,
the Revolving Loans may be used for working capital and other general corporate
purposes, and for Permitted Acquisitions made after the Closing Date.
Section 20 ISSUANCE OF LETTERS OF CREDIT, ETC. (a)
Subject to the terms and conditions hereof, at any time and from time to time
from the Closing Date through the day prior to the Revolving Loan Termination
Date, each Issuing Bank shall issue such Letters of Credit as the Company may
request by an L/C Application; PROVIDED that, after giving effect to such Letter
of Credit, (x) the SUM of the aggregate L/C Obligations then outstanding PLUS
the then outstanding aggregate principal amount of the Revolving Loans shall not
exceed the Aggregate Revolving Loan Commitment MINUS any Revolver Reserve and
any Non- broadcast Revolver Reserve in effect at such time, and (y) the
aggregate L/C Obligations then outstanding shall not exceed the L/C Commitment.
Unless all the Lenders with a Revolving Loan Commitment and the applicable
Issuing Bank otherwise consent in writing, the term of any Letter of Credit
shall not exceed 12 months. No Letter of Credit shall expire by its terms after
the Revolving Loan Termination Date. No Letter of Credit shall be issued except
in the ordinary course of business of the Company or any of its Subsidiaries or
in connection with Permitted Acquisitions.
(b) The Company shall submit the L/C Application for
the Issuance of any Letter of Credit to the applicable Issuing Bank at least
three Business Days prior to the date when required. Upon Issuance of a Letter
of Credit, the applicable Issuing Bank shall promptly notify the Lenders of the
amount and terms thereof.
(c) Upon the Issuance of a Letter of Credit, each
Lender that has made a Revolving Loan Commitment shall be deemed to have
purchased a pro rata participation, from the applicable Issuing Bank in an
amount equal to that Lender's Pro Rata Share, in such Letter of Credit. Without
limiting the scope and nature of each Lender's participation in any Letter of
Credit, to the extent that the applicable Issuing Bank has not been reimbursed
by the Company for any payment required to be made by such Issuing Bank under
any Letter of Credit, each Lender shall, pro rata according to its Pro Rata
Share, reimburse such Issuing Bank promptly upon demand for the amount of such
payment. The obligation of each Lender to so reimburse such Issuing Bank shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Unmatured Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Company to reimburse the applicable Issuing Bank for the amount of any
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payment made by such Issuing Bank under any Letter of Credit together with
interest as hereinafter provided.
(d) Upon the making of any payment with respect to any
Letter of Credit by the applicable Issuing Bank, the Company shall be deemed to
have submitted a Borrowing Notice for a Revolving Loan consisting of a Floating
Rate Loan in the amount of such payment, and the Administrative Agent shall
without notice to or the consent of the Company cause Revolving Loans to be made
by the Lenders in an aggregate amount equal to the amount paid by such Issuing
Bank on that Letter of Credit, but not exceeding the Aggregate Revolving Loan
Commitment MINUS the then aggregate outstanding principal amount of Revolving
Loans and MINUS any Revolver Reserve and any Non-broadcast Revolver Reserve, and
for this purpose, the conditions precedent set forth in Section 4 shall not
apply. The proceeds of such Revolving Loans shall be paid to the applicable
Issuing Bank to reimburse it for the payment made by it under such Letter of
Credit. Promptly following any Revolving Loans made under this Section 2.20,
the Administrative Agent shall notify the Company thereof. Each Lender that has
reimbursed an Issuing Bank pursuant to Section 2.20(c) for its Pro Rata Share of
any payment made by such Issuing Bank under a Letter of Credit shall thereupon
acquire a pro rata participation, to the extent of such reimbursement, in the
claim of such Issuing Bank against the Company under this Section 2.20.
(e) To the extent that any Loans made pursuant to
Section 2.20(d) are insufficient to reimburse the applicable Issuing Bank in
full, the Company agrees to pay to such Issuing Bank with respect to each Letter
of Credit, within one Business Day after demand therefor, a principal amount
equal to such unreimbursed portion of any payment made by such Issuing Bank
under that Letter of Credit, together with interest on such amount from the date
of any payment made by such Issuing Bank through the date of payment by the
Company at the Default Rate. The principal amount of any such payment made by
the Company to any Issuing Bank shall be used to reimburse such Issuing Bank for
the payment made by it under the related Letter of Credit.
(f) The Issuance of any supplement, modification,
amendment, renewal or extension to or of any Letter of Credit shall be treated
in all respects the same as the Issuance of a new Letter of Credit.
Section 21 LETTER OF CREDIT FEES. The Company shall pay
(i) a letter of credit fee to the Administrative Agent equal to the product of
(A) the Applicable Margin with respect to Eurodollar Loans for the Revolving
Loans minus 0.125%, multiplied by (B) the stated amount of each Letter of Credit
per annum for the term of each Letter of Credit, payable in advance, for the
account of the Lenders who have made Revolving Loan Commitments, according to
their respective Pro Rata Shares and (ii) an issuance fee to the Administrative
Agent of 0.125% of the stated amount of each Letter of Credit, payable in
advance for the account of the applicable Issuing Bank. Upon (A) the issuance
of each Letter of Credit, the Company shall also pay to the Administrative Agent
for the account of the applicable Issuing Bank an amount equal to the greater of
(i) $500 or (ii) the issuance fees; (B) the amendment of each Letter of Credit,
the Company shall pay to the Administrative Agent for the account of the
applicable Issuing Bank the amendment fees, in each case, as the applicable
Issuing Bank normally charges in connection with a Letter of Credit and activity
pursuant thereto, in either case which fees shall be solely for the account of
the applicable Issuing Bank; and (C) the incurrence of any reasonable
out-of-pocket costs and expenses in connection with the maintenance of any
Letter of Credit, the Company shall pay to the Administrative Agent for the
account of the applicable Issuing Bank the amount of such out-of-pocket costs
and expenses so incurred.
Section 22 OBLIGATION OF THE COMPANY ABSOLUTE, ETC. (a)
The obligation of the Company to pay to the applicable Issuing Bank the amount
of any payment made by such Issuing Bank under any Letter of Credit shall be
absolute, unconditional and irrevocable. Without limiting the foregoing, such
obligation of the Company shall not be affected by any of the following
circumstances:
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(1) any lack of validity or enforceability of any
Letter of Credit, this Agreement or any other agreement or instrument
relating thereto;
(2) any amendment or waiver of or any consent to
departure from any Letter of Credit, this Agreement or any other agreement
or instrument relating thereto;
(3) the existence of any claim, setoff, defense
or other rights which the Company may have at any time against any Issuing
Bank, any Lender, the Administrative Agent, any beneficiary of any Letter
of Credit (or any Persons for whom any such beneficiary may be acting) or
any other Person, whether in connection with any Letter of Credit, this
Agreement or any other agreement or instrument relating thereto, or any
unrelated transactions;
(4) any demand, statement or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever so long as any such document
appeared to comply with the terms of such Letter of Credit;
(5) payment by any Issuing Bank in good faith
under any Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the terms of such
Letter of Credit;
(6) the solvency or financial responsibility of
any party issuing any documents in connection with a Letter of Credit;
(7) any error in the transmission of any message
relating to a Letter of Credit not caused by the applicable Issuing Bank,
or any delay or interruption in any such message;
(8) any error, neglect or default of any
correspondent of any Issuing Bank in connection with a Letter of Credit;
(9) any consequence arising from acts of God,
war, insurrection, disturbances, labor disputes, emergency conditions or
other causes beyond the control of any Issuing Bank;
(10) the form, accuracy, genuineness or legal
effect of any contract or document referred to in any document submitted to
the applicable Issuing Bank in connection with a Letter of Credit; and
(11) any other circumstances whatsoever.
(b) Each Issuing Bank shall be entitled to the
protection accorded to the Agents pursuant to Section 10, MUTATIS MUTANDIS.
Section 23 CASH COLLATERAL. Notwithstanding anything to
the contrary herein or in any L/C Application, after the occurrence and during
the continuance of Default, the Company shall, upon the Administrative Agent's
demand, deliver to the Administrative Agent for the benefit of the Lenders cash,
or other collateral of a type satisfactory to the Required Lenders, having a
value (if other than cash), as determined by such Lenders, equal to the
aggregate outstanding L/C Obligations.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 1 YIELD PROTECTION. If any law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any regulatory interpretation thereof, or compliance by any
Lender with such (which has been adopted or changed after the date hereof),
(i) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or any applicable Lending Office (other than
reserves and assessments taken into account in determining the interest
rate applicable to any Eurodollar Loan), or
(ii) imposes any other condition the result of
which is to increase the cost to any Lender or any applicable Lending
Office of making, funding or maintaining any Eurodollar Loan or reduces any
amount receivable by any Lender or any applicable Lending Office in
connection with any Eurodollar Loan, or requires any Lender or any
applicable Lending Office to make any payment calculated by reference to
the amount of any Eurodollar Loan made or interest received by it, by an
amount deemed material by such Lender, or
(iii) affects the amount of capital required or
expected to be maintained by any Lender or Lending Office or any
corporation controlling any Lender and such Lender determines the amount of
capital required is increased by or based upon the existence of this
Agreement, the Loans, any Letters of Credit or commitments of this type,
then, within 15 days of demand by such Lender made together with the
presentation to the Company of a certificate of such Lender complying with
Section 3.5 hereof, the Company shall pay such Lender that portion of such
increased expense incurred (including, in the case of Section 3.1(iii), any
reduction in the rate of return on capital to an amount below that which it or
its controlling corporation could have achieved but for such change in
regulation after taking into account such Lender's or its controlling
corporation's policies as to capital adequacy) or reduction in an amount
received which such Lender reasonably determines is attributable to making,
funding and maintaining its Obligations and Commitments.
Section 3.2. TAXES.
(a) Except as required by law, all payments made by
the Company under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future taxes, levies, imposts,
duties, charges, fees, deductions, or withholdings, imposed, levied, collected,
withheld or assessed by any Governmental Authority after the Closing Date as a
result of the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of such Governmental Authority, BUT EXCLUDING (i) net
income, franchise and branch profits taxes imposed on the Administrative Agent
or a Lender by (x) the United States of America or any taxing authority thereof
or therein, (y) the jurisdiction under the laws of which the Administrative
Agent or such Lender is organized or in which it has its principal office or is
managed and controlled or any political subdivision or taxing authority thereof
or therein, or (z) any jurisdiction in which the Lending Office of any Lender
making and maintaining Loans to the Company, is located or any political
subdivision or taxing authority thereof or therein, and (ii) any taxes, levies,
imposts, duties, charges, fees, deductions or withholdings arising after the
date of this Agreement, solely as the immediate result of such Lender (x)
changing its designated Lending Office as of the Closing Date to a Lending
Office located in any other jurisdiction or (y)
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designating an additional Lending Office located in any other jurisdiction (such
non-excluded taxes, levies, imposts, duties, charges, fees, deduction and
withholdings being called "Taxes"). If any Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under the Notes, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Taxes, including Taxes attributable
to such increase, and free and clear of all liability, including, without
limitation, interest and penalties, in respect of such Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement and the Notes. Whenever any Taxes are payable by the Company, as
promptly as possible thereafter, the Company shall pay such Taxes. If the
Company fails to pay Taxes when due to the appropriate taxing authority the
Company shall indemnify the Administrative Agent and any Lender for any
incremental Taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure together with
any expenses payable by the Administrative Agent or any such Lender in
connection therewith. If the Company is required to make any additional payment
to the Administrative Agent or any Lender pursuant to this Section 3.2, and any
such Lender receives, or is entitled to receive, a credit against or relief or
remission for, or repayment of, any tax paid or payable by it in respect of, or
calculated with reference to, the Taxes giving rise to such payment, such Lender
shall, within a reasonable time of the earlier of the date that it receives or
is entitled to receive such credit, relief, remission or repayment, use its
reasonable efforts to reimburse the Company the amount of any such credit,
relief, remission or repayment to the extent not inconsistent with such Lender's
internal policies. If any Taxes constituting a withholding tax of the United
States of America or any other Governmental Authority shall be or become
applicable, after the Closing Date, to such payments by the Company to a Lender,
such Lender shall to the extent not inconsistent with such Lender's internal
policies use its reasonable efforts to make, fund and maintain its Loans through
a Lending Office of such Lender located in another jurisdiction so as to reduce
the Company's liability hereunder, and if, as determined by such Lender, in its
sole discretion, the making, funding or maintenance of such Loans through such
other Lending Office does not otherwise materially adversely affect such Loans
or such Lender.
(b) Prior to or at the Closing Date, each Lender that
is not incorporated under the laws of the United States of America or a state
thereof shall deliver to the Administrative Agent (and the Administrative Agent
agrees that it will deliver to the Company) in the case of a Lender that is a
"bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code
two duly completed copies of the United States Internal Revenue Service Form
1001 or 4224 or successor applicable form, as the case may be, certifying in
each case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) each Lender will deliver to the Administrative Agent (and the
Administrative Agent will deliver to the Company) an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding tax. In the case of any
Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, such Lender shall deliver (i) a representation letter to
the Administrative Agent (for the benefit of the Administrative Agent and the
Company) stating that such Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code and (ii) two (2) accurate and complete
original signed copies of Internal Revenue Service Form W-8, certifying that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. Each Lender
that is a "bank" within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code which delivers to the Company and the Administrative Agent a Form
1001 or 4224 and Form W-8 or W-9 pursuant to the preceding sentence further
undertakes, if requested by the Company, to deliver to the Company and the
Administrative Agent two further copies of said statement or Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such statement
or form expires or becomes obsolete or after the
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occurrence of any event requiring a change in the most recent statement or form
previously delivered by it to the Company, and such extension or renewals
thereof as may reasonably be requested by the Company, certifying in the case of
a Form 1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless in any such case any change in treaty, law or regulation has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent a
Lender or the Administrative Agent from duly completing and delivering any such
statement or form with respect to it and such Lender or Administrative Agent
advises the Company that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax and, in the case of
a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax. Each Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code will (for the benefit of the
Administrative Agent and the Company), to the extent legally entitled to do so,
and if requested by the Company, provide to the Company two further copies of
Internal Revenue Service Form W-8 and an updated representation letter stating
that such Lender is not a "bank" under Section 881(c)(3)(A) of the Internal
Revenue Code and such other forms as may be required in order to establish the
legal entitlement of such Lender to an exemption from withholding tax with
respect to payments under this Agreement. The Company shall not be required to
pay any increased amount on account of Taxes pursuant to this Section 3.2 to any
Lender, Transferee or Administrative Agent that fails to furnish any form or
statement that it was required to furnish in accordance with this Section 3.2 or
Section 12.3.3, and, to the extent required by law, the Company shall be
entitled to deduct Taxes from the payments owed to such Lender, Transferee or
Administrative Agent.
Section 3.3. AVAILABILITY OF RATE OPTIONS. If any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending Office
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or determines that (i) deposits of a type and maturity
appropriate to match fund any Eurodollar Loan are not available or (ii) the
Eurodollar Rate does not accurately reflect the cost of making or maintaining
any Eurodollar Loan, then (unless such unavailability or inaccuracy results
solely from a deterioration in the creditworthiness of such Lender subsequent to
the date hereof) the Administrative Agent shall suspend the availability of
Eurodollar Loans from such Lender and require the interest rate applicable to
any Eurodollar Loan by such Lender then outstanding to be changed to the
Floating Rate and each such Lender's Pro Rata Share shall be adjusted as
applicable in accordance therewith.
Section 3.4. FUNDING INDEMNIFICATION. If any payment or
conversion in respect of any Eurodollar Loan occurs on a date which is not the
last day of the applicable Eurodollar Interest Period, whether because of
acceleration, prepayment or otherwise, or if an Advance related to, or
conversion from or into or in continuation of, Eurodollar Loans does not occur
on a date specified therefor in a Borrowing Notice or a Conversion/Continuation
Notice, the Company will indemnify each Lender for any loss or cost incurred by
it resulting therefrom upon request by such Lender accompanied by a certificate
complying with Section 3.5 below.
Section 3.5. LENDER CERTIFICATES; SURVIVAL OF INDEMNITY.
To the extent reasonably possible, so long as the Company has any liquidated
liability to any Lender under Section 3.1, such Lender shall designate an
alternate Lending Office with respect to its Eurodollar Loans to reduce any such
liability, so long as such designation is not disadvantageous to such Lender. A
certificate of a Lender as to the amount due under Section 3.1 or 3.4 (which
certificate shall, if so requested by the Company, include an explanation of the
basis used by such Lender in calculating such amount) shall be delivered within
120 days after a responsible account officer of the Lender obtains actual
knowledge of the event giving rise thereto and shall be final, conclusive and
binding on the Company in the absence of manifest error. Determination of
amounts payable under such Sections in connection with any Lender's Eurodollar
Loans shall be calculated as though each Lender funded its Pro Rata
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Share of any Eurodollar Advance through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Eurodollar Loan, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in the
certificate shall be payable on demand after receipt by the Company of the
certificate. The obligations of the Company under Sections 3.1 and 3.4 shall
survive payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 1 CONDITIONS PRECEDENT TO INITIAL LOANS. The
obligations of the Lenders to make their initial Loans hereunder and of the
Issuing Bank to Issue any Letter of Credit on the Closing Date are subject to
the satisfaction on the Closing Date of the following conditions precedent:
(a) LOAN DOCUMENTS.
(i) CREDIT AGREEMENT. The Company shall have
duly executed and delivered this Agreement to the Administrative Agent.
(ii) NOTES. The Company shall have duly executed
and delivered to each of the Lenders the appropriate Revolving Note, Term
A Note and Term B Note in the amount, maturity and as otherwise provided
herein.
(iii) COMPANY SECURITY AGREEMENT. The Company
shall have duly executed and delivered to the Administrative Agent the
Company Security Agreement.
(iv) COMPANY PLEDGE AGREEMENT. The Company shall
have duly executed and delivered to the Administrative Agent the Company
Pledge Agreement.
(v) COMPANY TRADEMARK AGREEMENT. The Company
shall have duly executed and delivered to the Administrative Agent the
Company Trademark Agreement.
(vi) COMPANY MORTGAGES. The Company shall have
duly executed and delivered to the Administrative Agent the Company
Mortgages with respect to each interest in real property owned by the
Company, if any, after giving effect to the consummation of the
Transactions which are closed on or prior to the Closing Date.
(vii) PARENT GUARANTY. The Parent shall have
duly executed and delivered to the Administrative Agent the Parent
Guaranty.
(viii) PARENT PLEDGE AGREEMENT. The Parent shall
have duly executed and delivered to the Administrative Agent the Parent
Pledge Agreement.
(ix) SUBSIDIARY GUARANTY. Each Subsidiary of the
Company (other than the Excluded Subsidiaries) shall have duly executed and
delivered to the Administrative Agent the Subsidiary Guaranty.
(x) SUBSIDIARY SECURITY AGREEMENT. Each
Subsidiary of the Company (other than the Excluded Subsidiaries) shall have
duly executed and delivered to the Administrative Agent the Subsidiary
Security Agreement.
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(xi) SUBSIDIARY PLEDGE AGREEMENTS. Each of Jacor
Broadcasting of Atlanta, Inc. and each of the other Subsidiaries of the
Company (other than the Excluded Subsidiaries) that own any Equity
Interests as of the Closing Date shall have duly executed and delivered to
the Administrative Agent a Subsidiary Pledge Agreement.
(xii) SUBSIDIARY TRADEMARK AGREEMENT. Jacor
Broadcasting of Tampa Bay, Inc. and each of the other Subsidiaries of the
Company (other than the Excluded Subsidiaries) that own any material
trademarks as of the Closing Date shall have duly executed and delivered to
the Administrative Agent the Subsidiary Trademark Agreement.
(xiii) SUBSIDIARY MORTGAGES. Each of the
Subsidiaries of the Company (other than the Excluded Subsidiaries) that own
any real property interest (other than any such property deemed immaterial
by the Agents) as of the Closing Date shall have duly executed and
delivered to the Administrative Agent a Subsidiary Mortgage.
(xiv) INTERCOMPANY NOTES. Each of the
Subsidiaries of the Company (other than the Excluded Subsidiaries) shall
have duly executed and delivered to the Company the appropriate
Intercompany Demand Note and the Intercompany Acquisition Note (if
applicable) to which it is a party, and the Company shall have delivered
each such Intercompany Demand Note and Intercompany Acquisition Note, duly
endorsed in blank, to the Administrative Agent pursuant to the terms of the
Company Pledge Agreement.
(xv) PARENT CONTRIBUTION. The Company shall have
delivered evidence satisfactory to the Agents that the Parent and the
Company have completed the Parent Contribution, in compliance with all
laws, rules and regulations and that title to such assets transferred
pursuant to the Parent Contribution has been transferred to the Company
under applicable state law. The Administrative Agent shall have received
copies of all Parent Contribution Documents, certified as of the Closing
Date by Authorized Officers of the Parent and the Company to be true,
correct and complete copies of each such document and all of the terms
of all such documents shall have been approved by the Agents.
(xvi) INTERCOMPANY SECURITY AGREEMENT. Each of
the Subsidiaries of the Company (other than the Excluded Subsidiaries)
shall have duly executed and delivered to the Company the Intercompany
Security Agreement.
(xvii) FEE LETTER. The Company and the Parent
shall have duly executed and delivered to the appropriate Agents the Fee
Letters in form and substance satisfactory to the appropriate Agents.
(xviii) NOBLE DOCUMENT ASSIGNMENT. The Company
and any applicable Subsidiaries of the Company shall have duly executed and
delivered to the Administrative Agent, and the Parent and the Company shall
have used their best efforts to cause Noble to have duly acknowledged, the
Noble Document Assignment.
(xix) MEXICAN ASSIGNMENT AGREEMENT. The Company
and each applicable Subsidiary of the Company shall have duly executed and
delivered the Mexican Assignment Agreement to the Administrative Agent, and
the Parent and the Company shall have used their best efforts to cause the
other parties to each document assigned pursuant thereto to have duly
acknowledged and delivered the Mexican Assignment Agreement to the
Administrative Agent.
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(xx) TIME BROKERAGE ASSIGNMENT. The Time
Brokerage Assignment shall have been duly executed and delivered by the
Company and each applicable Subsidiary of the Company to the Administrative
Agent and the Parent and the Company shall have used their best efforts to
cause the other parties to each Local Marketing Agreement and each Joint
Sales Agreement assigned pursuant thereto to have duly acknowledged and
delivered the Time Brokerage Assignment to the Administrative Agent.
(xxi) COLLATERAL ASSIGNMENT. The Company and
its appropriate Subsidiaries shall have executed and delivered to the
Administrative Agent, with respect to each Local Marketing Agreement and
each Joint Sales Agreement to which the Company and/or any of its
Subsidiaries is a party, a Collateral Assignment and the Company and its
Subsidiaries shall have used their respective best efforts to have all of
the other parties to each such Local Marketing Agreement and Joint Sales
Agreement duly acknowledge and deliver each such Collateral Assignment to
the Administrative Agent.
(xxii) PARENT ACCOUNT ASSIGNMENT. The Parent and
each other party thereto shall have duly executed and delivered to the
Administrative Agent an assignment agreement in form and substance
satisfactory to the Agents pursuant to which the Parent will, among other
things, grant a security interest to the Administrative Agent for the
benefit of the Agents and the Lenders in a deposit account of the Parent
maintained by the Parent in the State of Illinois (or such other state as
agreed to by the Agents) (the "Parent Account") into which the Annual
Management Fee paid by the Company pursuant to Section 6.21 shall be
deposited (the "Parent Account Assignment").
(b) OPINIONS OF COUNSEL.
(i) The Administrative Agent and each Lender
shall have received a legal opinion, each dated the Closing Date, from
Graydon, Head and Ritchey, from Rosenberg & Liebentritt, from Weil, Gotshal
& Manges LLP and from Maguire, Voorhis & Wells, P.A., each counsel to the
Parent, the Company and its Subsidiaries, each in form and substance
acceptable to the Agents.
(ii) The Administrative Agent and each Lender
shall have received a legal opinion, dated the Closing Date, from FCC
counsel to the Parent, the Company and its Subsidiaries, from FCC counsel
for Citicasters and Noble (if applicable) and from Mexican communications
counsel, each in form and substance reasonably acceptable to the Agents.
(iii) The Administrative Agent and each Lender
shall have received legal opinions, each dated the Closing Date, from
counsel to the Company and/or its Subsidiaries in the States of Georgia,
Florida, Tennessee, Colorado and California and all other states in which
real property subject to a Mortgage is located, each in form and substance
reasonably acceptable to the Agents.
(iv) The Administrative Agent and each Lender
shall have received a legal opinion, dated the Closing Date, from local
counsel to the Company and the Parent with respect to the Parent
Contribution Documents, including, without limitation, with respect to
transfer of title to the Company with respect to the assets transferred, in
form and substance reasonably acceptable to the Agents.
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(v) The Administrative Agent and each Lender
shall have received a legal opinion, dated the Closing Date, from Juan
Gonzalez, Mexican counsel to the Company, in form and substance reasonably
acceptable to the Agents.
(vi) The Administrative Agent and each Lender
shall have received legal opinions (A) issued by the Company's counsel
issued in connection with the Transactions, each of which opinions shall
either provide that it may be relied upon by the Agents and the Lenders or
shall be accompanied by a letter to such effect addressed to the Agents and
the Lenders by the counsel issuing such opinions, (B) issued by the
Company's counsel to the effect that the execution and delivery by each of
the Parent, the Company and each of its Subsidiaries of, and the
performance of its respective obligations under, the Transaction Documents
to which it is or will be a party, including consummation of the
Transactions, do not conflict with the Citicasters Subordinated Debt
Indenture, the Senior Subordinated Note Documents or the Liquid Yield
Option Note Documents, and (C) required to be delivered pursuant to the
Citicasters Subordinated Debt Indenture in connection with consummation of
the Transactions, each in form and substance acceptable to the Agents.
(c) NOBLE DOCUMENTS AND MEXICAN DOCUMENTS. The
Administrative Agent and each Lender shall have received a certificate from an
Authorized Officer of the Company, dated the Closing Date, certifying the
accuracy and completeness of the attached duly executed copies of each of the
Noble Documents, each of the Mexican Documents and each of the Employment
Agreements.
(d) CORPORATE DOCUMENTS AND CORPORATE STRUCTURE. The
Administrative Agent and each Lender shall have received copies of the
certificate of incorporation of the Parent, the Company and each of its
Subsidiaries (other than the Excluded Subsidiaries), each as amended, modified
or supplemented to the Closing Date, certified to be true, correct and complete
by the appropriate Secretary of State as of a date not more than 90 days prior
to the Closing Date (or, in the case of the Parent and the Company, 15 days),
together with a copy of a good standing certificate from each such Secretary of
State and a good standing certificate from the Secretary of State (or the
equivalent thereof) of each other State in which each of them is required to be
qualified to transact business, each to be dated a date not more than 90 days
prior to the Closing Date (or, in the case of the Parent and the Company, 15
days). The Administrative Agent shall have received a corporate structure chart
with respect to the Company and all of its Subsidiaries (such corporate
structure chart to be certified by a duly Authorized Officer of the Company)
after giving effect to the Noble Transactions, the Citicasters Transactions and
the Parent Contribution and such corporate structure of the Company and its
Subsidiaries shall be satisfactory to the Lenders.
(e) CERTIFIED RESOLUTIONS, ETC. The Administrative Agent
and each Lender shall have received a certificate of the Secretary or Assistant
Secretary of each of the Parent, the Company and each of its Subsidiaries (other
than the Excluded Subsidiaries) dated the Closing Date certifying (i) the names
and true signatures of the incumbent officers of such Person authorized to sign
the applicable Loan Documents, (ii) the bylaws of such Person as in effect on
the Closing Date, (iii) the resolutions of such Person's board of directors
approving and authorizing the execution, delivery and performance of all
Transaction Documents executed by such Person and (iv) that there have been no
changes in the certificate of incorporation of such Person since the date of the
most recent certification thereof by the appropriate Secretary of State.
(f) GOVERNMENTAL CONSENTS, APPROVALS, SHAREHOLDER CONSENTS,
ETC. Except as set forth in Schedule 4.1(f) hereto, the Administrative Agent
shall have received evidence satisfactory to the Administrative Agent and the
Lenders and their respective counsel that the Parent, the Company and all of
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its Subsidiaries shall have made all applications, filings and registrations
with, and obtained all necessary approvals, orders, authorizations, consents,
licenses, certificates and permits from, the FCC and other federal, state and
local regulatory or governmental bodies and authorities (including, without
limitation, all HSR Approvals) and all shareholder consents and consents of
other Persons that are or may be required prerequisites to consummation of the
Transactions, the validity, enforceability or nonvoidability of, each of the
Transaction Documents or the pledge of the capital stock of the Company and
Subsidiaries of the Company required to be delivered pursuant to the Parent
Pledge Agreement, the Company Pledge Agreement and the Subsidiary Pledge
Agreements (except to the extent that the exercise by the Administrative Agent
of its rights under the Collateral Documents after a Default may require the
consent of the FCC pursuant to Section 310 of the Communications Act and except
for approvals, orders, authorizations and consents necessary in connection with
the Noble Transactions which are not required to have been obtained on or prior
to the Closing Date, if the Noble Transactions have not been consummated as of
the Closing Date), and the Administrative Agent and the Lenders shall have
received copies of each such filing, registration, approval, order,
authorization, consent, license, certificate and permit and all of the foregoing
shall be in full force and effect. The Company shall have delivered to the
Administrative Agent such evidence as the Administrative Agent shall have
requested, evidencing compliance by the Parent, the Company and its Subsidiaries
with all applicable laws, rules and regulations (including, without limitation,
ERISA, environmental and health and safety laws, rules and regulations).
(g) EXISTING DEBT. The Administrative Agent shall have
received evidence satisfactory to the Administrative Agent and the Lenders and
their respective counsel that (i) the Parent, the Company and its Subsidiaries
shall have paid, or concurrently with the making of the initial Loans hereunder
will pay, in full the Existing Debt (other than Surviving Debt), (ii) all
agreements, instruments or other documents governing or evidencing the Existing
Debt (other than Surviving Debt) shall have been, or concurrently with the
making of the initial Loans hereunder will be, terminated, (iii) the Parent
shall have paid, or concurrently with the making of the initial Loans hereunder
will pay, in full the JCI Existing Debt and (iv) all Liens granted to secure the
Existing Debt and the JCI Existing Debt (other than Surviving Debt) shall have
been, or concurrently with the making of the initial Loans hereunder will be,
released. The Agents shall be satisfied that the execution and delivery of, and
the performance by each of the Parent, the Company and each of its Subsidiaries
of its respective obligations under, each Transaction Document to which it is a
party and consummation of the Transactions does not violate, conflict with or
cause a default under any document or instrument evidencing Existing Debt, other
than Existing Debt or JCI Existing Debt being repaid on the Closing Date.
(h) INSURANCE. The Administrative Agent shall have
received a certificate of insurance and binders demonstrating insurance coverage
in respect of each of the Parent, the Company and each of its Subsidiaries of
types, in amounts, with insurers and with other terms required under the Loan
Documents, which certificate shall indicate that the Administrative Agent and
the Lenders are named additional insureds as their interests may appear and
shall contain a lender's loss payee endorsement in form and substance
satisfactory to the Administrative Agent in favor of the Administrative Agent on
behalf of itself and the Lenders.
(i) LIEN SEARCH REPORTS. The Administrative Agent shall
have received satisfactory reports of UCC, tax lien, judgment and litigation
searches conducted by a search firm acceptable to the Administrative Agent and
the Lenders with respect to the Parent, the Company and each of its Subsidiaries
under each of the names and in each of the locations required by the
Administrative Agent.
(j) UCC-1 FINANCING STATEMENTS, TRADEMARK FILINGS, ETC. The
Administrative Agent shall have received originals, duly executed and delivered
by the Company and each Subsidiary party to the Subsidiary Security
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Agreement, of each UCC-1 financing statement required by the Administrative
Agent to be delivered by the Company and each such Subsidiary, in each case
listing the Company or the relevant Subsidiary as debtor and naming the
Administrative Agent as secured party for filing in the proper jurisdictions for
the locations set forth in Exhibits A and B to the Company Security Agreement or
the Subsidiary Security Agreement, as the case may be. The Administrative Agent
shall have received such amendments to the UCC financing statements filed with
respect to the Intercompany Demand Notes, the Intercompany Acquisition Notes and
the Intercompany Security Agreement as the Administrative Agent shall request.
The Administrative Agent shall have received originals, duly executed and
delivered by the Parent and the Company, of all filings required to be made in
the U.S. Patent and Trademark Office in connection with the Parent Contribution.
(k) UCC-3 TERMINATION STATEMENTS, TRADEMARK RELEASES, ETC.
The Administrative Agent shall have received originals of each UCC-3 termination
statement, trademark lien release, mortgage release and other lien release
required by the Administrative Agent in form and substance acceptable to the
Administrative Agent to be filed in connection with the termination of all Liens
securing Existing Debt, JCI Existing Debt and any other existing Liens
identified by the Administrative Agent, in each case duly executed and delivered
by the appropriate Person in favor of which such Liens were granted by the
Company or any of its Subsidiaries.
(l) PRO FORMA BALANCE SHEET, ETC. The Administrative Agent
and each Lender shall have received PRO FORMA consolidated and consolidating
balance sheets of the Parent and its Subsidiaries as of the Closing Date, giving
effect to the transactions to be effected on or prior to the Closing Date
(including, without limitation, the funding of the initial Loans, the repayment
of the Existing Debt, consummation of the Noble Transactions, consummation of
the Citicasters Transactions, consummation of the Parent Contribution, issuance
of the Senior Subordinated Notes, assumption of the Citicasters Subordinated
Debt, issuance of the Liquid Yield Option Notes and issuance of equity of the
Parent on or after the Effective Date (collectively, the "Transactions") and the
payment or accrual of all costs and expenses incurred in connection therewith,
certified, to the best of such officer's knowledge and belief, by an Authorized
Officer of the Company and a pro-forma calculation, certified by an Authorized
Officer of the Company, showing compliance with each of the financial ratios set
forth in Section 6.3 hereof after giving effect to such Transactions).
(m) SOLVENCY. The Administrative Agent and each Lender
shall have received a certificate signed by an Authorized Officer of each of the
Parent and the Company, as applicable, containing conclusions as to the Solvency
of the Parent, the Company and each of its Subsidiaries (other than the Excluded
Subsidiaries) after giving effect to the initial Loans and the Transactions.
(n) PLEDGED STOCK. The Administrative Agent shall have
received the original stock certificates evidencing the stock pledged pursuant
to the Parent Pledge Agreement, the Company Pledge Agreement and each Subsidiary
Pledge Agreement, together with undated stock powers duly executed in blank in
connection therewith.
(o) TITLE INSURANCE; SURVEY. The Administrative Agent
shall have received (i) a commitment for mortgagee title insurance with respect
to the real property encumbered by the respective Mortgages, in an amount
satisfactory to the Lenders, and issued by a title insurance company
satisfactory to the Lenders, and (ii) the most recent survey (if any) with
respect to each such property in the possession of the Parent, the Company or
any of its Subsidiaries.
(p) CITICASTERS MERGER AND CITICASTERS DOCUMENTS. The
Citicasters Merger and the other Citicasters Transactions shall have been
consummated on the terms set forth in the Citicasters Documents and all
conditions precedent set forth in, and all of the transactions to be consum-
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mated on or before the Closing Date pursuant to the terms and provisions of,
each of the Citicasters Documents, shall have been satisfied or shall have
occurred. The Administrative Agent and each Lender shall have received a
certificate from an Authorized Officer of the Company, dated the Closing Date,
certifying the accuracy and completeness of attached duly executed copies of
each of the Citicasters Documents, which agreements shall be in form and
substance satisfactory to the Administrative Agent and its counsel. All final
consents, approvals, orders, authorizations, licenses, certificates and permits
from the FCC and other federal, state and local regulatory or governmental
bodies and authorities required in connection with consummation of the
Citicasters Transactions shall have been obtained (including, without
limitation, all HSR Approvals), shall be in full force and effect and copies
thereof shall have been delivered to the Administrative Agent.
(q) ISSUANCE OF DEBT AND EQUITY OF PARENT AND SUBORDINATED
DEBT OF THE COMPANY. The Agents shall have received evidence satisfactory to
the Agents that the Parent shall (i) have received cash proceeds from (A) the
issuance of Liquid Yield Option Notes in an amount not less than $100,000,000
before deduction of commissions and other reasonable fees, costs and expenses
associated with the issuance thereof, issued on terms (including, without
limitation, maturity, redemption, amortization, interest, premium, fees,
covenants, events of default and remedies) satisfactory to the Agents, and (B)
the issuance of equity of the Parent issued on terms satisfactory to the Agents
in an amount not less than $225,000,000 (net of the amount of Existing Warrants
repurchased on the Closing Date and underwriting commissions) and (ii) have
applied such proceeds (A) as a contribution to the capital of the Company to be
used by the Company to acquire Citicasters and consummate the Citicasters
Transactions and (B) to repay the JCI Existing Debt. The Agents shall have
received evidence satisfactory to the Agents that the Company shall have
received cash proceeds from the issuance of the Senior Subordinated Notes issued
on terms (including, without limitation, maturity, redemption, amortization,
interest, premium, fees, covenants, subordination, events of default and
remedies) satisfactory to the Agents, in an aggregate amount not less than
$100,000,000 before deduction of commissions and other reasonable fees, costs
and expenses associated with the issuance thereof and that the aggregate
principal amount of Subordinated Debt of the Company (including the Senior
Subordinated Notes and the Citicasters Subordinated Debt) outstanding on the
Closing Date shall not be less than $225,000,000.
(r) FINANCIAL STATEMENTS. The Administrative Agent and
each Lender shall have received the audited financial statements of the Parent
for the fiscal years ending December 31, 1993, December 31, 1994, and December
31, 1995 and of Noble and Citicasters for the fiscal year for each of Noble and
Citicasters, ending December 31, 1995 and the unaudited financial statements of
the Parent and the Company for the fiscal period ending on the last day of the
two consecutive calendar quarters ended immediately prior to the Closing Date.
(s) ENVIRONMENTAL MATTERS. The Administrative Agent and
the Lenders shall (i) be satisfied that each of the Parent, the Company and its
Subsidiaries is in compliance with all applicable environmental, health and
safety statutes and regulations, (ii) be satisfied that neither the Parent, the
Company nor any of its Subsidiaries is subject to any present or contingent
environmental liability or the subject of any state or federal environmental
investigation that could, in either case, have a material adverse effect on the
business, properties, prospects, financial condition, profits or results of
operations of the Parent and its Subsidiaries or the Company and its
Subsidiaries and (iii) have received copies of all environmental audit reports
(if any) prepared by independent environmental consultants with respect to the
properties and business of the Parent, the Company and each of its Subsidiaries.
(t) FUNDS FLOW INSTRUCTIONS. The Administrative Agent and
the Lenders shall have received detailed instructions satisfactory to them
describing the funds flow in connection with the funding of the initial Loans
and the consummation of the other Transactions.
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(u) FEES AND EXPENSES. The Administrative Agent shall have
received, for its account and for the account of each Lender, as applicable, all
fees payable on the Closing Date pursuant to the terms of the Fee Letters and
all expenses due and payable hereunder on or before the Closing Date, including,
without limitation, the reasonable fees and expenses accrued through the Closing
Date of Skadden, Arps, Slate, Meagher & Flom and any other counsel retained by
any Agent.
(v) Z/C EQUITY INVESTMENT. The Administrative Agent and the
Lenders shall have received evidence satisfactory to them that Z/C owns at least
40% of the common stock of the Parent on the Closing Date.
(w) PROJECTIONS. The Administrative Agent and the Lenders
shall have received projections prepared by the Company demonstrating the
projected consolidated financial condition and results of operations of the
Company and its Subsidiaries after giving effect to the Transactions, for the
period commencing on the Closing Date and ending on the Term B Loan Maturity
Date, which projections shall be in form and substance satisfactory to the
Administrative Agent and the Lenders, shall indicate that the financial
condition and assets of the Company shall be sufficient (in the opinion of the
Administrative Agent and the Lenders) to provide the Company with adequate
working capital to profitably operate its consolidated businesses and shall be
accompanied by a written statement of the assumptions underlying such
projections.
(x) PROCESS AGENT. Each of the Parent, the Company and
each of its Subsidiaries (other than the Excluded Subsidiaries) shall have
appointed in writing CT Corporation System as agent for service of process in
connection with any action or proceeding arising under or relating to the Loan
Documents, and such agent shall have accepted such appointment in writing.
(y) NOBLE FCC PREPARED FILINGS AND MEXICAN FILINGS. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent and the Lenders and their respective counsel that the
Parent and the Company have filed (i) all applications, filings, consent
requests and registrations with the FCC necessary for the Company's acquisition
of the capital stock and assets of Noble under the Noble Documents and (ii) all
applications, filings, consent requests and registrations with the Mexican
Secretaria de Comunicaciones y Transportes necessary for the acquisition by
Xetra Comunicaciones, S.A. de C.V. of the capital stock and assets of XETRA-AM
and XETRA-FM, and the Mexican Concession relating thereto, all as contemplated
by the Mexican Documents.
(z) LITIGATION. The Lenders shall have determined that
there exists no material pending or threatened litigation or other proceedings
involving the Parent, the Company or any of its Subsidiaries except for such
material litigation or proceedings disclosed on Schedule 5.7 and with respect to
which the Parent or the Company has established full reserves in its financial
statements and projections delivered to the Administrative Agent and the Lenders
pursuant to Sections 4.1(r) and (w).
(aa) ERISA MATTERS. The Company shall have provided to the
Administrative Agent evidence satisfactory to the Administrative Agent and the
Lenders that the Parent, the Company and each of its Subsidiaries are in
compliance with ERISA and all of the regulations promulgated thereunder.
(bb) OFFICER'S CERTIFICATE. The Administrative Agent and
each Lender shall have received a certificate executed by an Authorized Officer
of the Company dated the Closing Date (i) stating that (A) all of the
representations and warranties of the Company and its Subsidiaries contained in
the Loan Documents are true and correct (other than representations and
warranties that expressly speak only as of a different date), (B) after giving
effect to the execution and delivery of the Transaction Documents by the Parent,
the Company and its Subsidiaries, the funding of the initial Loans and the
consummation of the other Transactions that have been consummated on or
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before the Closing Date, no Default or Unmatured Default shall have occurred and
be continuing and (ii) demonstrating that the Company is in compliance with all
financial covenants set forth in Section 6.3 hereof (each determined on a PRO
FORMA consolidated basis after giving effect to the Transactions for the four
consecutive fiscal quarters ended immediately prior to the Closing Date). The
Administrative Agent and each Lender shall have received a certificate executed
by an Authorized Officer of the Parent dated the Closing Date stating that all
of the representations and warranties of the Parent contained in the Loan
Documents to which it is a party are true and correct (other than
representations and warranties that expressly speak only as of a different
date).
(cc) FCC LICENSES. The Administrative Agent shall have
received copies of all of the principal FCC licenses for the operation of the
Radio Stations and Television Stations (whether pursuant to a Joint Sales
Agreement, a Local Marketing Agreement, or otherwise) certified by the Secretary
or Assistant Secretary of the Company.
(dd) CERTAIN FINANCIAL RATIOS AS OF THE CLOSING DATE. For
the 12 month period ended June 30, 1996, the Leverage Ratio (on a PRO FORMA
consolidated basis after giving effect to the Transactions) is less than or
equal to 6.5 to 1.00 and the Senior Leverage Ratio (on a PRO FORMA consolidated
basis after giving effect to the Transactions) is less than or equal to 5.0 to
1.00.
(ee) TERMINATION OF CITICASTERS L/C DOCUMENTS. The
Administrative Agent shall have received evidence satisfactory to the Agents and
the Lenders and their respective counsel that the Citicasters L/C Documents have
been surrendered to the L/C Provider for cancellation and that the Parent has
been released from all obligations under the Citicasters L/C Documents.
(ff) SENIOR SUBORDINATED NOTES AND LIQUID YIELD OPTION
NOTES. The Administrative Agent shall have received copies of all Senior
Subordinated Note Documents, certified as of the Closing Date by an Authorized
Officer of the Company to be true, correct and complete copies of each such
document and all of the terms (including, without limitation, subordination,
redemption, amortization, interest, premiums, fees, covenants, events of default
and remedies) of all such documents entered into on or prior to the Closing Date
shall have been approved by the Agents. The Administrative Agent shall have
received copies of all Liquid Yield Option Note Documents, certified as of the
Closing Date by an Authorized Officer of the Parent to be true, correct and
complete copies of each such document and all of the terms (including, without
limitation, redemption, amortization, interest, premiums, fees, covenants,
events of default and remedies) of all such documents entered into on or prior
to the Closing Date shall have been approved by the Agents.
(gg) CLOSING DATE. The Closing Date shall have occurred on
or before December 31, 1996.
(hh) EFFECTIVE DATE. The Effective Date shall have
occurred.
(ii) ADDITIONAL MATTERS. The Administrative Agent and each
Lender shall have received such other certificates, opinions, documents and
instruments relating to the Transactions as may have been reasonably requested
by the Administrative Agent or any Lender, and all corporate and other
proceedings and all other documents (including, without limitation, all
documents referred to herein and not appearing as exhibits hereto) and all legal
matters in connection with the Transactions shall be satisfactory in form and
substance to the Administrative Agent and the Lenders.
Section 2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of
each Lender to make any Loan (including the initial Loans made on the Closing
Date) and of each Issuing Bank to Issue any Letter of Credit is subject to the
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satisfaction on the date such Loan is made or such Letter of Credit is Issued of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained herein and in the other Loan Documents (other than
representations and warranties that expressly speak only as of a different date)
shall be true and correct in all material respects on such date both before and
after giving effect to the making of such Loans or the Issuance of such Letter
of Credit.
(b) NO DEFAULT OR UNMATURED DEFAULT. No Default or
Unmatured Default shall have occurred and be continuing on such date either
before or after giving effect to the making of such Loans or the Issuance of
such Letter of Credit.
(c) NO INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall have
been issued, and no litigation shall be pending or threatened, that would
enjoin, prohibit or restrain the making or repayment of the Loans or the
Issuance of such Letter of Credit or the consummation of the Transactions which
have been or are to be consummated on or before such date.
(d) NO MATERIAL ADVERSE CHANGE. No event, act or condition
shall have occurred after December 31, 1995 that has had a material adverse
effect on the business, properties, financial condition or results of operations
of the Parent and its Subsidiaries, of the Company and its Subsidiaries, of
Noble and its Subsidiaries or of Citicasters and its Subsidiaries, as the case
may be, and if any such material adverse effect shall have occurred, the
Required Lenders shall have waived the same in writing.
(e) BORROWING NOTICE. The Administrative Agent shall have
received a duly executed Borrowing Notice or L/C Application, as appropriate, in
respect of the Loans to be made or Letters of Credit to be Issued on such date.
(f) ACQUISITION. To the extent the proceeds of the Loan
will be used for any Acquisition, the Company shall have delivered to the
Administrative Agent and the Lenders copies of all final federal, state and
local regulatory or governmental approvals, orders, authorizations, licenses,
certificates and permits necessary for the consummation of such Acquisition
("Final Orders"), including, without limitation, any consents and approvals
required by the FCC and any filings with the Federal Trade Commission and the
Antitrust Division of the Department of Justice pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (collectively,
the "HSR Approvals") (other than the HSR Approvals required in connection with
the Permitted Acquisitions contemplated by the Noble Documents).
Notwithstanding the foregoing, the Company shall be permitted to deliver to the
Administrative Agent and the Lenders copies of FCC orders which are not final
and are subject to reconsideration by the FCC or appeal to a court with respect
to any aforementioned Acquisition if and only if, (i) the Company or its
Subsidiaries (if applicable) shall have negotiated an unwind agreement with
respect to the business and assets (or related voting securities) subject to
such Acquisition which provides for the reconveyance for full value to the
seller of all such business and assets (or related voting securities) in the
event a final FCC order is not reasonably attainable with respect to such
business and assets (or related voting securities) and (ii) such business and
assets (or related voting securities) subject to such Acquisition shall be
subject to an escrow agreement whereby such business and assets (or related
voting securities) are maintained in escrow arrangements until the receipt of an
FCC final order with respect thereto, PROVIDED solely with respect to the
creation or maintenance of such escrow arrangements, the Required Lenders may
expressly agree that such escrow arrangements are not required; PROVIDED further
that such escrow arrangements shall only be required with respect to
Acquisitions to the extent the amount of Acquisitions with respect to which the
Company and/or its Subsidiaries have entered into purchase agreements but have
not yet consummated or have not yet received Final Orders, and with respect to
which
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proceeds of any Loans are to be used or have been used to pay all or a portion
of the purchase price, exceeds $15,000,000 individually for any one Acquisition
or $20,000,000 in the aggregate at any one time outstanding. The requirements
set forth in this Section 4.2(f) are in addition to any other requirements and
restrictions set forth in this Agreement which are applicable to such an
Acquisition.
The acceptance of the proceeds of each such Loan and the Issuance
of such Letter of Credit shall constitute a representation and warranty by the
Company to each of the Lenders that all of the conditions required to be
satisfied under this Article IV in connection with the making of such Loan and
the Issuance of such Letter of Credit have been satisfied.
All of the Notes, certificates, agreements, legal opinions and
other documents and papers referred to in this Article IV, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts for
each of the Lenders, and shall be satisfactory in form and substance to each
Lender in its sole discretion.
Section 3 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AGREEMENT. This Agreement shall become effective upon the satisfaction of the
following conditions precedent:
(a) LOAN DOCUMENTS.
(i) CREDIT AGREEMENT. The Company shall have duly
executed and delivered this Agreement to the Administrative Agent.
(ii) COMPANY SECURITY AGREEMENT. The Company shall
have duly executed and delivered to the Administrative Agent the Company
Security Agreement.
(iii) PARENT GUARANTY. The Parent shall have duly
executed and delivered to the Administrative Agent the Parent Guaranty.
(iv) PARENT PLEDGE AGREEMENT. The Parent shall have
duly executed and delivered to the Administrative Agent the Parent Pledge
Agreement.
(v) FEE LETTER. The Company and the Parent shall have
duly executed and delivered to the appropriate Agents the Fee Letters in
form and substance satisfactory to the appropriate Agents.
(vi) CITICASTERS DOCUMENT ASSIGNMENT. The Company and
the Parent shall have duly executed and delivered to the Administrative
Agent the Citicasters Document Assignment, and shall have used their best
efforts to cause Citicasters to duly acknowledge the Citicasters Document
Assignment.
(b) OPINIONS OF COUNSEL. The Administrative Agent and each
Lender shall have received a legal opinion, each dated the Effective Date, from
Graydon, Head and Ritchey, from Rosenberg & Liebentritt, from Weil, Gotshal &
Manges LLP and from Maguire, Voorhis & Wells, P.A., each counsel to the Parent
and the Company, each in form and substance acceptable to the Agents.
(c) CORPORATE DOCUMENTS AND CORPORATE STRUCTURE. The
Administrative Agent and each Lender shall have received copies of the
certificate of incorporation of the Parent and the Company, each as amended,
modified or supplemented to the Effective Date, certified to be true, correct
and complete by the appropriate Secretary of State as of a date not more than 10
days prior to the Effective Date, together with a copy of a good standing
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certificate from each such Secretary of State and a good standing certificate
from the Secretary of State (or the equivalent thereof) of each other State in
which each of them is required to be qualified to transact business, each to be
dated a date not more than 10 days prior to the Effective Date.
(d) CERTIFIED RESOLUTIONS, ETC. The Administrative Agent
and each Lender shall have received a certificate of the Secretary or Assistant
Secretary of each of the Parent and the Company dated the Effective Date
certifying (i) the names and true signatures of the incumbent officers of such
Person authorized to sign the applicable Loan Documents, (ii) the bylaws of such
Person as in effect on the Effective Date, (iii) the resolutions of such
Person's board of directors approving and authorizing the execution, delivery
and performance of all Loan Documents executed by such Person and (iv) that
there have been no changes in the certificate of incorporation of such Person
since the date of the most recent certification thereof by the appropriate
Secretary of State.
(e) GOVERNMENTAL CONSENTS, APPROVALS, SHAREHOLDER CONSENTS,
ETC. The Administrative Agent shall have received evidence satisfactory to the
Administrative Agent and the Lenders and their respective counsel that the
Parent and the Company shall have made all applications, filings and
registrations with, and obtained all necessary approvals, orders,
authorizations, consents, licenses, certificates and permits from, the FCC and
other federal, state and local regulatory or governmental bodies and authorities
(including, without limitation, all HSR Approvals) and all shareholder consents
and consents of other Persons that are or may be required prerequisites to the
validity, enforceability or nonvoidability of, each of the Loan Documents
executed as of the Effective Date or the pledge of the capital stock of the
Company required to be pledged pursuant to the Parent Pledge Agreement (except
to the extent that the exercise by the Administrative Agent of its rights under
the Collateral Documents after a Default may require the consent of the FCC
pursuant to Section 310 of the Communications Act), and the Administrative Agent
and the Lenders shall have received copies of each such filing, registration,
approval, order, authorization, consent, license, certificate and permit and all
of the foregoing shall be in full force and effect. The Company shall have
delivered to the Administrative Agent such evidence as the Administrative Agent
shall have requested, evidencing compliance by the Parent and the Company with
all applicable laws, rules and regulations (including, without limitation,
ERISA, environmental and health and safety laws, rules and regulations).
(f) UCC-1 FINANCING STATEMENTS. The Administrative Agent
shall have received originals, duly executed and delivered by the Company, of
each UCC-1 financing statement required by the Administrative Agent to be
delivered by the Company, in each case listing the Company as debtor and naming
the Administrative Agent as secured party for filing in the proper jurisdictions
for the locations set forth in Exhibits A and B to the Company Security
Agreement.
(g) LIEN SEARCH REPORTS. The Administrative Agent shall
have received satisfactory reports of UCC, tax lien, judgment and litigation
searches conducted by a search firm acceptable to the Administrative Agent and
the Lenders with respect to the Company under each of the names and in each of
the locations required by the Administrative Agent.
(h) PRO FORMA BALANCE SHEET, ETC. The Administrative Agent
and each Lender shall have received PRO FORMA consolidated and consolidating
balance sheets of the Parent and its Subsidiaries as of the Effective Date,
certified, to the best of such officer's knowledge and belief, by an Authorized
Officer of the Company.
(i) SOLVENCY. The Administrative Agent and each Lender
shall have received a certificate signed by an Authorized Officer of each of the
Parent and the Company, as applicable, containing conclusions as to the Solvency
of the Parent and the Company.
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(j) PLEDGED STOCK. Notice shall have been delivered to and
acknowledged by the Agent under the Existing Credit Facility with respect to the
stock pledged pursuant to the Parent Pledge Agreement.
(k) FINANCIAL STATEMENTS. The Administrative Agent and
each Lender shall have received the audited financial statements of the Parent
for the fiscal years ending December 31, 1993, December 31, 1994, and December
31, 1995 and of Noble and Citicasters for the fiscal year for each of Noble and
Citicasters, ending December 31, 1995 and the unaudited financial statements of
the Parent and the Company for the fiscal period ending on the last day of the
fiscal quarter ended March 31, 1996.
(l) FEES AND EXPENSES. The Administrative Agent shall have
received, for its account and for the account of each Lender, as applicable, all
fees payable on the Effective Date pursuant to the terms of the Fee Letters and
all expenses due and payable hereunder on or before the Effective Date,
including, without limitation, the reasonable fees and expenses accrued through
the Effective Date of Skadden, Arps, Slate, Meagher & Flom.
(m) PROCESS AGENT. Each of the Parent and the Company
shall have appointed in writing CT Corporation System as agent for service of
process in connection with any action or proceeding arising under or relating to
the Loan Documents, and such agent shall have accepted such appointment in
writing.
(n) OFFICER'S CERTIFICATE. The Administrative Agent and
each Lender shall have received a certificate executed by an Authorized Officer
of the Company dated the Effective Date stating that (A) all of the
representations and warranties of the Company contained in the Loan Documents
are true and correct and (B) after giving effect to the execution and delivery
of the Loan Documents by the Parent and the Company, no Default or Unmatured
Default shall have occurred and be continuing. The Administrative Agent and
each Lender shall have received a certificate executed by an Authorized Officer
of the Parent dated the Closing Date stating that all of the representations and
warranties of the Parent contained in the Loan Documents to which it is a party
are true and correct.
(o) REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained herein and in the other Loan Documents (other than
representations and warranties that expressly speak only as of a different date)
shall be true and correct in all material respects on the Effective Date.
(p) NO DEFAULT OR UNMATURED DEFAULT. No Default or
Unmatured Default shall have occurred and be continuing on the Effective Date
(q) NO INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall have
been issued, and no litigation shall be pending or threatened, that would
enjoin, prohibit or restrain the execution and delivery of the Loan Documents by
the Company or the Parent to which it is a party or the performance of their
respective obligations thereunder or the making or repayment of the Loans or the
Issuance of any Letter of Credit or the consummation of the Transactions.
(r) NO MATERIAL ADVERSE CHANGE. No event, act or condition
shall have occurred after December 31, 1995 that has had a material adverse
effect on the business, properties, financial conditions or results of
operations of the Parent and its Subsidiaries, of the Company and its
Subsidiaries or of Noble and its Subsidiaries or of Citicasters and its
Subsidiaries, as the case may be, and if any such material adverse effect shall
have occurred, the Required Lenders shall have waived the same in writing.
(s) ADDITIONAL MATTERS. The Administrative Agent and each
Lender shall have received such other certificates, opinions, documents and
instruments relating to the Transactions as may have been reasonably requested
by the Administrative Agent or any Lender, and all corporate and other
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proceedings and all other documents (including, without limitation, all
documents referred to herein and not appearing as exhibits hereto) and all legal
matters in connection with the Transactions shall be satisfactory in form and
substance to the Administrative Agent and the Lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
Section 1 CORPORATE EXISTENCE AND STANDING. Each of the Parent,
the Company and each of its Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
Section 2 AUTHORIZATION AND VALIDITY. Each of the Parent, the
Company and each of its Subsidiaries has the corporate power and authority and
legal right to execute and deliver the Transaction Documents to which each is a
party and to perform their obligations thereunder and to consummate the
Transactions. The execution and delivery by each of the Parent, the Company and
each of its Subsidiaries of the Transaction Documents to which each is a party,
and the performance of their obligations thereunder and consummation of the
Transactions, have been duly authorized by necessary corporate proceedings, and
the Transaction Documents to which each is a party constitute legal, valid and
binding obligations of the Parent, the Company and each of its Subsidiaries
enforceable against the Parent, the Company and each of its Subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity. To the best knowledge of
the Company, each of the Citicasters Documents, the Noble Documents and the
Mexican Documents (i) constitute legal, valid and binding obligations of each
party thereto (other than the Company or the Parent) enforceable against each
such Person in accordance with its respective terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
and (ii) are in full force and effect. To the best knowledge of the Company
there are no material defaults, breaches or violations under the Citicasters
Documents or the Noble Documents or defaults, breaches or violations which
affect the enforceability of such agreements, the Noble Document Assignment or
the Mexican Document Assignment or which restrict or prohibit consummation of
the Transactions.
Section 3 NO CONFLICT; GOVERNMENT CONSENT, ETC. Except as set
forth on Schedule 5.3 hereto, neither the execution and delivery by the Parent,
the Company or any of its Subsidiaries of the Transaction Documents nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the provisions hereof or thereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Parent, the
Company or any of its Subsidiaries or the Parent's, the Company's or any of its
Subsidiaries' articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which the Parent, the Company or any of
its Subsidiaries is a party or is subject, or by which it, or its property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the property of the Parent, the
Company or any of its Subsidiaries pursuant to the terms of any such indenture,
instrument or agreement. Except as set forth on Schedule 5.3 hereto, on and
after the Effective Date, no order, consent, approval, license, authorization,
or validation of, or application, filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, or any other Person is required to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents or in
connection with consummation of the
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Transactions contemplated thereby that are consummated on or before the
Effective Date, other than (i) the filing, within the period established by
applicable law, of the Loan Documents with the FCC, (ii) the filing and/or
recording of financing statements (and/or financing statement amendments), and
(iii) orders, consents, approvals, applications and filings which have already
been made or obtained. Except as set forth on Schedule 5.3 hereto, on and after
the Closing Date, no order, consent, approval, license, authorization, or
validation of, or application, filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, or any other Person is required to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Transaction Documents
or in connection with consummation of the Transactions that are consummated on
or before the Closing Date, other than (i) the filing, within the period
established by applicable law, of the Loan Documents with the FCC, (ii) the
filing and/or recording of financing statements (and/or financing statement
amendments), the Company Mortgages and the Subsidiary Mortgages and (iii)
orders, consents, approvals, applications and filings which have already been
made or obtained.
Section 4 FINANCIAL STATEMENTS.
(a) The audited December 31, 1993, December 31, 1994, and
December 31, 1995 consolidated financial statements of the Parent and its
Subsidiaries and the unaudited consolidated financial statements of the Parent
and its Subsidiaries and of the Company and its Subsidiaries for each of the
months ending on the last day of the two consecutive months ended immediately
prior to the Closing Date heretofore delivered to the Lenders were each prepared
in accordance with Generally Accepted Accounting Principles in effect on the
dates such statements were prepared (except with respect to such unaudited
financial statements which are not adjusted to reflect (1) the carrying value of
barter receivables and barter payables in accordance with FASB No. 63 and (2)
the classification of outstanding debt between short term and long term) and
fairly present the consolidated financial condition and operations of the Parent
and its Subsidiaries, at such dates and the consolidated results of operations
of the Parent and its Subsidiaries for the periods then ended. In addition,
such unaudited statements do not include footnotes.
(b) To the best knowledge of the Parent and the Company
after due inquiry, the audited December 31, 1993, and December 31, 1994 and
December 31, 1995 consolidated financial statements of Noble and its
Subsidiaries and the unaudited consolidated financial statements of Noble and
its Subsidiaries for each of the months ending on the last day of the two
consecutive months ended immediately prior to the Closing Date heretofore
delivered to the Lenders were each prepared in accordance with Generally
Accepted Accounting Principles in effect on the dates such statements were
prepared (except with respect to such unaudited financial statements which are
not adjusted to reflect (1) the carrying value of barter receivables and barter
payables in accordance with FASB No. 63 and (2) the classification of
outstanding debt between short term and long term) and fairly present the
consolidated financial condition and operations of Noble and its Subsidiaries at
such dates and the consolidated results of operations of Noble and its
Subsidiaries for the periods then ended. In addition, such unaudited statements
do not include footnotes.
(c) To the best knowledge of the Parent and the Company
after due inquiry, the audited December 31, 1993, December 31, 1994 and December
31, 1995 consolidated financial statements of Citicasters and its Subsidiaries
and the unaudited consolidated financial statements of Citicasters and its
Subsidiaries for each of the months ending on the last day of the two
consecutive months ended immediately prior to the Closing Date heretofore
delivered to the Lenders were each prepared in accordance with Generally
Accepted Accounting Principles in effect on the dates such statements were
prepared (except with respect to such unaudited financial statements which are
not adjusted to reflect (1) the carrying value of barter receivables and barter
payables in accordance with FASB No. 63 and (2) the
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classification of outstanding debt between short term and long term) and fairly
present the consolidated financial condition and operations of Citicasters and
its Subsidiaries at such dates and the consolidated results of operations of
Citicasters and its Subsidiaries for the periods then ended. In addition, such
unaudited statements do not include footnotes.
Section 5 MATERIAL ADVERSE CHANGE. As of the Effective Date and
as of the Closing Date, no material adverse change in the business, properties,
financial condition or results of operations of the Parent and its Subsidiaries
or of the Company and its Subsidiaries or Noble or Citicasters or any of its
Subsidiaries has occurred since December 31, 1995.
Section 6 TAXES. The Parent, the Company and its Subsidiaries
have filed (or have obtained extensions for filing) all United States federal,
state and local tax returns and all other tax returns which are required to be
filed and have paid all taxes which have become due or pursuant to any
assessment received by the Parent, the Company or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been provided in accordance
with Generally Accepted Accounting Principles. No United States or state income
tax returns of the Parent, the Company or any of its Subsidiaries has been
audited by the Internal Revenue Service or any State agency. No tax liens have
been filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Parent, the Company and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.
Section 7 LITIGATION AND CONTINGENT OBLIGATIONS. Except as set
forth on Schedule 5.7 hereto, as of the Effective Date and as of the Closing
Date there is no litigation, arbitration, governmental investigation,
proceeding, inquiry or Environmental Claim pending or, to the knowledge of any
of their officers, threatened against or affecting the Parent, the Company or
any of its Subsidiaries which could reasonably be expected to have a material
adverse effect on the business, properties, financial condition or results of
operations of the Parent and its Subsidiaries, taken as a whole, or the Company
and its Subsidiaries, taken as a whole, or the ability of the Parent, the
Company or any of its Subsidiaries to perform its obligations under the
Transaction Documents or to consummate the Transactions. Other than any
liability incident to such litigation, arbitration, proceedings or Environmental
Claim, as of the Closing Date neither the Parent nor the Company nor any of its
Subsidiaries has any material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.
Section 8 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Schedule 5.8(a) hereto, there
are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that could form
the basis of any Environmental Claim against (i) the Parent, the Company or any
of its Subsidiaries or, (ii) to the Parent's, the Company's or its Subsidiaries'
knowledge against any Person whose liability for any Environmental Claim that
the Parent, the Company or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law, which could reasonably be
expected to materially adversely affect the business, properties, financial
condition or results of operations of the Parent and its Subsidiaries, taken as
a whole, or of the Company and its Subsidiaries, taken as a whole, or the
ability of the Parent, the Company or any of its Subsidiaries to perform its
obligations under the Transaction Documents or to consummate the Transactions.
(b) Except as set forth in Schedule 5.8(b), to the Parent's
or the Company's knowledge (i) there are no on-site or off-site locations where
the Parent, the Company or any of its Subsidiaries has stored, disposed of or
arranged for the disposal of Materials of Environmental Concern, (ii) there are
no underground storage tanks located on property owned or leased by
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the Parent, the Company or any of its Subsidiaries, (iii) there is no asbestos
contained in or forming part of any building, building component, structure or
office space owned or leased by the Parent, the Company or any of its
Subsidiaries, and (iv) no polychlorinated biphenyls (PCB's) are used or stored
at any property owned or leased by the Parent, the Company or any of its
Subsidiaries, which could reasonably be expected to materially adversely affect
the business, properties, financial condition or results of operations of the
Parent and its Subsidiaries, taken as a whole, or of the Company and its
Subsidiaries, taken as a whole, or the ability of the Parent, the Company or any
of its Subsidiaries to perform its obligations under the Transaction Documents
or to consummate the Transactions.
Section 9 ERISA.
(a) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date (i) there are no Unfunded Liabilities in any Plan which liabilities
in the aggregate would have a material adverse effect on the business,
properties, financial condition or results of operations of the Parent and its
Subsidiaries, taken as a whole, or of the Company and its Subsidiaries, taken as
a whole; (ii) each Parent Plan complies in all material respects with all
applicable requirements of law and regulations and no Reportable Event has
occurred with respect to any Parent Plan and, to the Company's actual knowledge,
with respect to any Plan that is not a Parent Plan; (iii) neither the Parent,
the Company nor any of its Subsidiaries nor any ERISA Affiliate has withdrawn
from any Plan or initiated steps to do so, and no steps have been taken to
terminate any Plan, in each case under circumstances which would have a material
adverse effect on the business, properties, financial condition or results of
operations of the Parent and its Subsidiaries, taken as a whole, or of the
Company and its Subsidiaries, taken as a whole; and (iv) neither the Parent, the
Company nor any of its Subsidiaries nor any ERISA Affiliate has engaged in any
prohibited transaction (as defined in Section 4975 of the Internal Revenue Code)
that would subject the Parent, the Company or any of its Subsidiaries to any
penalty which would have a material adverse effect on the business, properties,
financial condition or results of operations of the Parent and its Subsidiaries,
taken as a whole, or of the Company and its Subsidiaries, taken as a whole.
(b) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date, neither the Parent, the Company nor any of its Subsidiaries nor
any of their ERISA Affiliates has any contingent liability with respect to any
post-retirement benefit under any "welfare plan" (as defined in Section 3(1) of
ERISA) that is reasonably likely to have a material adverse effect on the
business, properties, financial condition or results of operations of the Parent
and its Subsidiaries, taken as a whole, or of the Company and its Subsidiaries,
taken as a whole, other than liability for continuation coverage under Part 6 of
Subtitle B of Title I of ERISA.
(c) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date, no lien under Section 412(n) of the Internal Revenue Code or
302(f) of ERISA or requirement to provide security under Section 401(a)(29) of
the Internal Revenue Code or Section 307 of ERISA has been or is reasonably
expected by the Parent, the Company, any of its Subsidiaries or any of their
ERISA Affiliates to be imposed on the assets of the Parent, the Company, any of
its Subsidiaries or any of their ERISA Affiliates that is reasonably likely to
have a material adverse effect on the business, properties, financial condition
or results of operations of the Parent and its Subsidiaries, taken as a whole,
or of the Company and its Subsidiaries, taken as a whole.
(d) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date, no material liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Plan, Multiemployer Plan or any
trust related thereto has been, or is expected by the Parent, the Company, any
of its Subsidiaries or, to the actual knowledge of the Company, any of their
ERISA Affiliates, to be incurred by the Parent, the Company, any of its
Subsidiaries or any of their ERISA Affiliates that is reasonably likely to have
a material adverse effect on the business, properties, financial condi-
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tion or results of operations of the Parent and its Subsidiaries, taken as a
whole, or of the Company and its Subsidiaries, taken as a whole.
Section 10 ACCURACY OF INFORMATION. No information, exhibit,
certificate, schedule or report furnished by the Parent, the Company or any of
its Subsidiaries to any Agent or to any Lender in connection with the
negotiation of the Loan Documents contains, and no information, certificate or
report which shall in the future be furnished by the Parent, the Company or any
of its Subsidiaries in connection with any of the Loan Documents will contain,
any material misstatement of fact or omit to state any material fact necessary
to make the statements contained therein not misleading.
Section 11 MARGIN REGULATIONS. No part of the proceeds of any
Loan will be used by the Parent, the Company or any of its Subsidiaries to
purchase or carry any margin stock (as defined in any Margin Regulation) or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock, if the making of any Loan or the use of the proceeds thereof or
the Issuance of any Letter of Credit would violate or be inconsistent with the
provisions of any Margin Regulation.
Section 12 MATERIALLY BURDENSOME AGREEMENTS. Except as
disclosed on Schedule 5.12 hereto or as identified in the notes to the Parent's
financial statements delivered to the Administrative Agent and the Lenders
pursuant to Section 4.1(r), neither the Parent, the Company nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any charter
or other corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise) as
currently conducted or used in connection with its business. Neither the
Parent, the Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument evidencing or governing
Indebtedness or any other agreement to which it is a party, which default might
have a material adverse effect on the business, properties, financial condition
or results of operations of the Parent and its Subsidiaries, taken as a whole,
or of the Company and its Subsidiaries, taken as a whole.
Section 13 COMPLIANCE WITH LAWS; FRANCHISES AND LICENSES.
(a) The Parent, the Company and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions (including, without limitation, all Environmental Laws and the
Communications Act) of any domestic or foreign government or any instrumentality
or agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, except where the
failure to so comply would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Parent and its
Subsidiaries, taken as a whole, or of the Company and its Subsidiaries, taken as
a whole. The Parent, the Company and its Subsidiaries have obtained all
franchises, licenses, certificates, consents, approvals and authorizations
granted or issued by any public or governmental body, agency or authority
necessary and appropriate to own and/or operate the Radio Stations and
Television Stations and all such franchises, licenses, certificates, consents,
approvals and authorizations are in full force and effect with respect to the
Radio Stations and Television Stations.
(b) Schedule 5.13(b)(i) hereto includes, as of the
Effective Date and as of the Closing Date, all FCC Broadcast Station Licenses of
the Parent, the Company and each of its Subsidiaries and all FCC Broadcast
Station Licenses to be acquired upon consummation of the Transactions by the
Company and its Subsidiaries. On and after the Closing Date, each FCC Broadcast
Station License which is materially necessary to the operation of the business
of the Parent, the Company or any of its Subsidiaries has been validly issued
and is in full force and effect. Such FCC Broadcast Station Licenses constitute
all of the FCC authorization necessary for the operation of the Parent's, the
Company's and its Subsidiaries' businesses in the same manner as it is presently
conducted. Each of the Company and its Subsidiaries
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has fulfilled and performed all of its material obligations with respect
thereto, and, on and after the Closing Date, complete and correct copies of the
FCC Broadcast Station Licenses of the Parent, the Company and each of its
Subsidiaries will have been delivered to the Administrative Agent. No event has
occurred which (a) results in, or after notice or lapse of time or both would
result in, revocation or termination of any FCC Broadcast Station License or (b)
materially and adversely affects or in the future will be reasonably likely (so
far as the Company can now reasonably foresee) to materially adversely affect
any of the rights of the Parent, the Company or any of its Subsidiaries
thereunder (other than proceedings related to the radio broadcast industry
generally). No other FCC license is necessary for the operation of the business
of the Parent, the Company or any of its Subsidiaries as now conducted. Except
as set forth on Schedule 5.13(b)(ii) hereto and as may be required under Section
310 of the Communications Act, none of the FCC Broadcast Station Licenses or
other franchises or licenses require that any present stockholder, director,
officer or employee of the Parent, the Company or any of its Subsidiaries remain
a stockholder or employee of the Parent, the Company or any of its Subsidiaries,
or that any transfer of control of the Parent, the Company or any of its
Subsidiaries must be approved by any public or governmental body other than the
FCC.
(c) Except as described on Schedule 5.13(c) hereto, to the
best of the Parent's and the Company's knowledge, on the Effective Date and on
the Closing Date, none of the Parent, the Company, any of its Subsidiaries,
Noble, any of its Subsidiaries, Citicasters or any of its Subsidiaries is a
party to any investigation, notice of violation, order or complaint issued by or
before any court or regulatory body, including the FCC, or of any other
proceedings (other than proceedings relating to the radio or television
industries generally) which could in any manner threaten or adversely affect the
validity or continued effectiveness of the FCC Broadcast Station Licenses set
forth on Schedule 5.13(b)(i) hereto. Except as described on Schedule 5.13(c),
as of the Effective Date and as of the Closing Date, neither the Parent nor the
Company has any reason to believe (other than in connection with there being no
legal assurance thereof) that the FCC Broadcast Station Licenses listed and
described on Schedule 5.13(b)(i) will not be renewed in the ordinary course.
Each of the Parent, the Company and each of its Subsidiaries, and to the best
knowledge of the Company and the Parent, Noble and each of its Subsidiaries and
Citicasters and each of its Subsidiaries, has filed all reports, applications,
documents, instruments and information required to be filed by it pursuant to
applicable rules and regulations or requests of the FCC to the extent that the
failure to file the same could threaten or adversely effect the validity or
continued effectiveness of their respective FCC Broadcast Station Licenses,
including, without limitation, those set forth on Schedule 5.13(b)(i).
Section 14 OWNERSHIP OF PROPERTIES. Except as set forth on
Schedule 5.14 hereto, the Parent, the Company and each of its Subsidiaries has
good and marketable title, free of all Liens, other than those permitted by
Section 6.17, to all of the properties and assets reflected in the financial
statements as owned by it.
Section 15 LOCATION OF PROPERTIES.
(a) Except as set forth on Schedule 5.15(a) hereto, or as
otherwise disclosed by written notice from the Company to the Administrative
Agent from time to time, neither the Parent, the Company nor any of its
Subsidiaries owns or possesses any fee or leasehold interest in real property
(other than interests in property which in the aggregate are of no material
value to the Parent, the Company or its Subsidiaries).
(b) Except as set forth on Schedule 5.15(b) hereto, or as
otherwise disclosed by written notice from the Company to the Administrative
Agent from time to time, neither the Parent, the Company nor any of its
Subsidiaries owns or possesses any interest in any tangible personal property
(including, without limitation, equipment, fixtures and inventory) of any type
whatsoever, which is not located at one of the properties listed on Schedule
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5.15(a) hereto, or as otherwise has been disclosed by written notice from the
Company to the Administrative Agent from time to time (other than property which
may be located at other properties from time to time which in the aggregate is
of no material value to the Parent, the Company or its Subsidiaries).
Section 16 INVESTMENT COMPANY ACT. Neither the Parent, the
Company nor any of its Subsidiaries nor any corporation controlling the Parent
or the Company or under common control with the Parent or the Company is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
Section 17 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the
Parent, the Company nor any of its Subsidiaries nor any corporation controlling
the Parent or the Company or under common control with the Parent or the Company
is a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 18 CAPITAL STRUCTURE.
(a) Schedule 5.18(a) hereto sets forth as of the Closing
Date, both before and after giving effect to the Transactions to be consummated
on the Closing Date, the number of authorized and issued shares of each class of
capital stock of the Parent, the Company and each of its Subsidiaries, the par
value thereof and the registered owner(s) of the capital stock of the Company
and each Subsidiary of the Company. All of such stock has been duly and validly
issued and is fully paid and non-assessable. Except as set forth in Schedule
5.18(a) hereto, as of the Closing Date, neither the Parent, the Company nor any
of its Subsidiaries has outstanding any securities convertible into or
exchangeable for its capital stock nor does the Parent, the Company or any of
its Subsidiaries have outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock. On the Closing Date, Z/C owns not
less than 40% of the issued and outstanding shares of common stock of the
Parent. The Parent owns 100% of the issued and outstanding capital stock of the
Company. As of the Effective Date, the Company has no Subsidiaries and owns no
assets.
(b) Schedule 5.18(b)(i) hereto identifies, as of the
Closing Date, all of the Indebtedness of the Company and its Subsidiaries
immediately prior to the making of the Loans and the application of the proceeds
thereof and includes, without limitation, the Citicasters Existing Debt (the
"Existing Debt"). As of the Closing Date and after the making of the Loans and
the application of the proceeds thereof and after the consummation of the other
Transactions which are to occur on or before the Closing Date, the Company and
its Subsidiaries shall have no Indebtedness to any Person other than
Indebtedness arising under the Loan Documents and the Indebtedness identified on
Schedule 5.18(b)(ii) hereto (the "Surviving Debt"). Schedule 5.18(b)(iii)
hereto identifies, as of the Closing Date, all of the Indebtedness of the Parent
immediately prior to consummation of the Transactions that will have been
consummated on or before the Closing Date (the "JCI Existing Debt"). As of the
Closing Date and after the consummation of the other Transactions which are to
occur on or before the Closing Date (including repayment of JCI Existing Debt),
the Parent shall have no Indebtedness to any Person other than Indebtedness
arising under the Collateral Documents to which it is a party and Liquid Yield
Option Notes issued on or before the Closing Date, and, if the Noble
Transactions have not been consummated on or before the Closing Date, payment
obligations under the Noble Documents in connection with consummation of the
Noble Transactions.
(c) Except as set forth on Schedule 5.18(b)(ii) hereto or
as permitted under Section 6.11, upon the making of the initial Loans and the
application of the proceeds thereof on the Closing Date (i) all claims in
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connection with the Existing Debt (other than with respect to the Surviving
Debt) shall have been satisfied and released and (ii) the Obligations shall
constitute the only outstanding secured indebtedness of the Company and its
Subsidiaries.
(d) As of the Closing Date, simultaneously with the funding
of the initial Loans, the Parent shall have contributed the assets of the Parent
to the Company pursuant to the Parent Contribution Documents, in compliance with
all laws, rules and regulations and title to such assets shall have been
transferred to the Company under applicable state law.
(e) On or prior to the Closing Date and prior to the
initial funding of the Loans, the Company has received cash proceeds of the
Senior Subordinated Notes in an aggregate principal amount not less than
$100,000,000 before deduction of commissions and other reasonable fees, costs
and expenses associated with the issuance thereof, the aggregate principal
amount of Subordinated Debt of the Company (including the Senior Subordinated
Notes and the Citicasters Subordinated Debt) outstanding on the Closing Date is
not less than $220,000,000 and the subordination provisions with respect to all
Subordinated Debt are enforceable against the holders thereof. The Obligations
constitute "Senior Indebtedness" as defined in the Citicasters Subordinated Debt
Indenture and the Obligations constitute "Senior Debt" as defined in the Senior
Subordinated Note Indenture.
(f) As of the Closing Date, the Parent shall have received
cash proceeds in an aggregate amount not less than $325,000,000 before deduction
of commissions and other reasonable fees, costs and expenses associated with the
issuance thereof which the Parent shall have received from (i) the issuance of
Liquid Yield Option Notes in an amount not less than $100,000,000 before
deduction of commissions and other reasonable fees, costs and expenses
associated with the issuance thereof, and (ii) the issuance of equity of the
Parent issued in an amount not less than $225,000,000 (net of the amount of
Existing Warrants repurchased on the Closing Date and underwriting commissions),
which aggregate proceeds shall be contributed to the capital of the Company to
permit the Company to consummate the Citicasters Transactions and shall be
applied to repay the JCI Existing Debt.
Section 19 COLLATERAL ASSIGNMENTS. Each of the Company and any
of its Subsidiaries that is party to a Joint Sales Agreement or a Local
Marketing Agreement has entered into a Collateral Assignment with respect to
each such Joint Sales Agreement or Local Marketing Agreement.
Section 20 EXCLUDED SUBSIDIARIES, ETC. None of the Excluded
Subsidiaries has any material assets. As of the Closing Date, Georgia Network
Equipment, Inc. has no material assets other than satellite dishes and related
equipment located in various locations in the State of Georgia and several other
states with a value on the Closing Date not in excess of $75,000.
Section 21 LABOR MATTERS. Except as set forth on Schedule 5.21
hereto, there is no collective bargaining agreement covering any of the
employees of the Company or any of its Subsidiaries on the Effective Date or on
the Closing Date. As of the Closing Date, no single employment contract is
necessary for the profitable operation of the Company's or any of its
Subsidiaries' business. As of the Closing Date, no attempt to organize the
employees of the Company or any of its Subsidiaries, and no labor disputes,
strikes or walkouts affecting the operations of the Company or any of its
Subsidiaries, is pending or, to the knowledge of the Company and its officers,
threatened.
Section 22 SOLVENCY. On the Effective Date and on the Closing
Date and at all times after the Closing Date and after giving effect to the
Transactions, the Parent, the Company and each of its Subsidiaries (other than
Excluded Subsidiaries) will be Solvent.
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Section 23 SECURITY INTERESTS AND LIENS.
(a) The Collateral Documents (other than the Intercompany
Security Agreement) create, as security for the Obligations, valid and
enforceable security interests in and Liens on all of the Collateral, in favor
of the Administrative Agent for the benefit of the Agents and the Lenders. Upon
the filing of the financing statements identified in Section 4.1(j) in the
filing offices contemplated therein, the filing of the Company Trademark
Agreement and the Subsidiary Trademark Agreement in the United States Patent and
Trademark Office and the filing and recordation of the Mortgages, such security
interests in and Liens on the Collateral (other than Collateral consisting of
goods of Georgia Network Equipment, Inc., fixtures on real property owned or
leased by the Company or any of its Subsidiaries which is not subject to a
Mortgage and motor vehicles) shall be superior to and prior to the rights of all
third parties (except as disclosed on Schedule 5.23 hereto), and no further
recordings or filings are or will be required in connection with the creation,
perfection or enforcement of such security interests and Liens, other than the
filing of continuation statements in accordance with applicable law.
(b) The Intercompany Security Agreement creates, as
security for the "Secured Obligations" (as defined therein), valid and
enforceable security interests in and Liens on all of the "Collateral", in favor
of the Company. Upon the filing of the financing statements identified in
Section 4.1(j) in the filing offices contemplated therein, such security
interests in and Liens on such "Collateral" (other than Collateral consisting of
goods of Georgia Network Equipment, Inc., United States registered trademarks
(to the extent that perfection of a security interest therein requires a filing
with respect thereto with the United States Patent and Trademark Office),
fixtures on real property owned or leased by the Company or any of its
Subsidiaries which is not subject to a Mortgage and motor vehicles) shall be
superior to and prior to the rights of all third parties other than the
Administrative Agent for the benefit of the Agents and the Lenders (except as
disclosed on Schedule 5.23 hereto), and no further recordings or filings are or
will be required in connection with the creation, perfection or enforcement of
such security interests and Liens, other than the filing of continuation
statements in accordance with applicable law.
Section 24 CLOSING DATE TRANSACTIONS. On the Closing Date
and immediately prior to or contemporaneously with the making of the initial
Loans hereunder, the Transactions intended to be consummated on the Closing Date
will have been, and the Transactions consummated prior to the Closing Date have
been, consummated in accordance with all applicable laws. All consents and
approvals of, and filings and registrations with, and all other actions by, any
Person required in order to make or consummate such Transactions have been
obtained, given, filed or taken and are or will be in full force and effect. No
material term or condition of any Noble Document or any Citicasters Document has
been amended, modified or waived from the terms and conditions contained in the
Noble Documents and the Citicasters Documents, respectively, delivered to the
Administrative Agent on or before the Closing Date without the prior written
consent of the Required Lenders; and the Parent, the Company and each of its
Subsidiaries have, and to the best of the Parent's and the Company's knowledge
all other parties thereto have, performed and complied in all material respects
with all of the terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such parties on or before the
Closing Date.
Section 25 CALL LETTERS; PATENTS, TRADEMARKS, ETC. As of
the Effective Date and the Closing Date, the Parent, the Company and its
Subsidiaries in the aggregate have all rights pursuant to the rules and
regulations of the FCC to use as call letters of AM broadcast radio stations the
call letters "WGST", "WLW", "WCKY", "KOA", "KTLK", "WFLA", "WBRD", "WJGR",
"WZAZ", "KEX", "WTVN", "KSLX" and "WDAF", of FM radio broadcasting station call
letters "WPCH", "KHTS", "WEBN", "WOFX", "KRFX", "KBPI", "WFLZ", "WDUV", "WQIK",
"WSOL", "WJBT", "WKRQ", WWNK", "WLVQ", "WLLD", "WHOK", "WLOH", "KYYS", "WKLS",
"KSLX" "KKRZ", "KKCW", "KSEG", "KRXQ", "WXTB" and "WTBT", television broad-
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casting call letters of "WKRC" and "WTSP" and all trademarks, service marks,
logos and tradenames material to the operations thereof, of the Georgia News
Network, Inc., of Critical Mass Media, Inc. and of the Radio Stations. After
the Closing Date, the Company and its Subsidiaries will have all rights pursuant
to the rules and regulations of the FCC to use all call letters of the Radio
Stations necessary for the operation of their respective businesses and all
trademarks, service marks, logos and tradenames material to the operation
thereof. As of the Closing Date, the Company and its Subsidiaries in the
aggregate have certain rights pursuant to Joint Sales Agreements, Local
Marketing Agreements and the Mexican Sales Agency Agreement to use AM broadcast
radio station call letters "WSAI", "WAOZ" and XETRA, and FM broadcast radio
station call letters "WGST", "WAQZ", "KTCL" and "XETRA". To the knowledge of
the Company and its officers, as of the Closing Date, and except (i) with
respect to call letters used by the Company and its Subsidiaries pursuant to
Joint Sales Agreements, Local Marketing Agreements and the Mexican Sales Agency
Agreement, or (ii) as set forth in Schedule 5.25 hereto, no Person other than
the Company and its Subsidiaries has, owns, possesses, holds or claims any
interest with respect to the use of (or has challenged the right of the Company
or any of its Subsidiaries to use) any of such call letters, trademarks, service
marks, logos or tradenames, except for claims which do not, either individually
or in the aggregate, materially affect the Company or any of its Subsidiaries.
Neither the Parent, the Company nor any of its Subsidiaries owns any United
States registered patent, trademark, service mark or copyright material to the
Company or its Subsidiaries, except for those listed on Schedule 5.25 hereto.
Section 26 NO DEFAULT. No Default or Unmatured Default has
occurred and is continuing.
Section 27 BROKERS' FEES. Except as set forth on Schedule 5.27
hereto, and except as payable to any person party to this Agreement or the Fee
Letters, neither the Parent, the Company nor any of its Subsidiaries has any
obligation to any Person in respect of any finder's, brokers, investment banking
or other similar fee in connection with any of the Transactions.
Section 28 INSURANCE. Schedule 5.28 hereto accurately sets
forth as of the Effective Date all insurance policies and programs currently in
effect with respect to the respective property and assets and business of the
Parent, the Company and its Subsidiaries, specifying for each such policy and
program, (i) the amount thereof, (ii) the risks insured against thereby, (iii)
the name of the insurer and each insured party thereunder, (iv) the policy or
other identification number thereof, (v) the expiration date thereof and (vi)
the annual premium with respect thereto. As of the Closing Date, the Parent,
the Company and its Subsidiaries will have in place insurance policies and
programs substantially equivalent to the types and amounts, and against
substantially equivalent liabilities, casualties and contingencies, as are
covered by the insurance policies and programs in effect as of the Effective
Date. The insurance policies, programs and amounts of insurance maintained by
the Parent, the Company and its Subsidiaries are adequate for the type of risks
reasonably anticipated for the lines of businesses in which the Parent, the
Company and its Subsidiaries engage.
Section 29 REPRESENTATIONS AND WARRANTIES IN NOBLE DOCUMENTS.
All of the representations made by the Parent, the Company and each of its
Subsidiaries in each Noble Document and, to the best of the Parent's and the
Company's knowledge, all representations made by each other Person in each of
the Noble Documents and the Mexican Documents are true and correct in all
material respects. None of such representations and warranties of the Parent or
the Company or any of its Subsidiaries are inconsistent in any material respect
with the representations and warranties made herein or in any other Loan
Document.
Section 30 REPRESENTATIONS AND WARRANTIES IN CITICASTERS
DOCUMENTS. All of the representations made by the Parent and the Company in
each of the Citicasters Documents and, to the best of the Parent's and the
Company's knowledge, all representations made by each other Person in each of
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the Citicasters Documents are true and correct in all material respects. None
of such representations and warranties of the Parent or the Company are
inconsistent in any material respect with the representations and warranties
made herein or in any other Loan Document.
Section 31 SUBSIDIARY AGREEMENTS. Each Subsidiary of the
Company (other than the Excluded Subsidiaries) has duly executed and delivered
to the (i) Company (A) an Intercompany Demand Note and, if required pursuant to
Section 6.11(c), an Intercompany Acquisition Note and (B) a counterpart
signature page to the Intercompany Security Agreement and (ii) Administrative
Agent, (A) a counterpart signature page to the (1) Subsidiary Guaranty and the
(2) Subsidiary Security Agreement and (B) a Subsidiary Mortgage, a Subsidiary
Pledge Agreement and a Subsidiary Trademark Agreement, if any such Subsidiary
owns any real property (other than any such property deemed immaterial by the
Administrative Agent), any stock and any trademarks, respectively.
ARTICLE VI
COVENANTS
The Company covenants and agrees that, from and after the Closing
Date until the Aggregate Commitment has been terminated, each of the Letters of
Credit has expired or been terminated and the Obligations have been indefeasibly
paid in full, unless the Required Lenders shall otherwise consent in writing:
Section 1 FINANCIAL REPORTING. The Company will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with Generally Accepted Accounting Principles, and
furnish to the Administrative Agent and the Lenders:
(a) Within 90 days after the close of each of its fiscal
years, an unqualified audit report certified by independent certified public
accountants of nationally recognized standing, acceptable to the Administrative
Agent, prepared in accordance with Generally Accepted Accounting Principles on a
consolidated basis for the Company and its Subsidiaries, including balance
sheets as of the end of such period, related profit and loss and reconciliation
of surplus statements (consolidated only), setting forth in comparative form the
figures for the previous fiscal year, and a statement of cash flows
(consolidated only), accompanied by (i) a letter from said accountants
substantially in the form of Exhibit L hereto and (ii) a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any Default
or Unmatured Default, or if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status thereof.
(b) Within 30 days after the end of each calendar month,
for the Company and its Subsidiaries, consolidated and consolidating unaudited
balance sheets and Capital Expenditure statements as at the close of each such
month and consolidated profit and loss statements for such month and for the
period from the beginning of the Company's fiscal year to the end of such month,
in each case prepared in accordance with Generally Accepted Accounting
Principles and setting forth in comparative form the corresponding figures for
the comparable periods in the preceding fiscal year, for the period from the
beginning of such fiscal year to the end of such month, and, in each case, in
comparative form the corresponding figures for the corresponding items in the
budget for such periods delivered by the Company to the Administrative Agent and
the Lenders pursuant to Section 6.1(c), all certified by the Company's Treasurer
or Chief Financial Officer and prepared in accordance with Generally Accepted
Accounting Principles, except with respect to the unaudited balance sheets which
are not adjusted to reflect (1) the carrying value of barter receivables and
barter payables in accordance with FASB No. 63 and (2) the classification of
outstanding debt between short term and long term. In addition, such statements
will not include footnotes.
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(c) As soon as available, (i) but in any event within 45
days after the beginning of each fiscal year of the Company, a copy of the
annual budget prepared on a monthly basis for the Company and each market with
respect to the Radio Stations and Television Stations for such fiscal year
reflecting cash flow requirements and results of operations and (ii) any
revisions to the budgets previously delivered.
(d) Together with the financial statements required to be
delivered under Section 6.1(a) and the financial statements required to be
delivered under Section 6.1(b) for the last month of each fiscal quarter of the
Company and, at the Required Lenders' option, the financial statements required
to be delivered under Section 6.1(b) for any other month, a duly completed
Compliance Certificate.
(e) Within 180 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Parent Plan, certified as correct
by an Authorized Officer of the Company and the Parent.
(f) As soon as possible and in any event within five
Business Days after an Authorized Officer of the Company learns (i) that any
Reportable Event has occurred with respect to any Parent Plan or (ii) that any
Reportable Event has occurred with respect to any Plan other than a Parent Plan
and, in the exercise of such officer's good faith judgment, such officer
determines that such Reportable Event is reasonably likely to result in payment
by the Company and its Subsidiaries in excess of $4,000,000, in each such case,
a statement, signed by the Chief Financial Officer of the Company, describing
said Reportable Event and the action which the Company or the ERISA Affiliate
(if applicable) proposes to take with respect thereto.
(g) Promptly upon the furnishing thereof to the
shareholders of the Parent, copies of all financial statements, reports and
proxy statements so furnished.
(h) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports
which the Parent or any of its Subsidiaries files with the Securities and
Exchange Commission or the FCC.
(i) Simultaneously with delivery to the holders of the
Senior Subordinated Notes, the Citicasters Subordinated Notes or the Liquid
Yield Option Notes, any report, financial statement, notice, certificate or
other information required to be delivered to any holder of Senior Subordinated
Notes, Citicasters Subordinated Notes or Liquid Yield Option Notes,
respectively, pursuant to any of the Senior Subordinated Note Documents, the
Citicasters Subordinated Debt Indenture or the Liquid Yield Option Note
Documents and copies of all notices of default delivered to the Company or the
Parent by any such holder, promptly upon receipt thereof by the Company or the
Parent.
(j) Prior to or within 5 days after the date on which any
License is lost as described in Section 7.14, a certificate of an Authorized
Officer of the Company setting forth calculation in reasonable detail of the
applicable Broadcast Cash Flow percentages resulting from any such loss of a
License or Licenses.
(k) Such other information (including non-financial
information) as the Administrative Agent or any Lender may from time to time
reasonably request.
Section 2 NOTICE OF DEFAULT, LITIGATION ETC. The Company will,
(a) within two (2) Business Days after an Authorized Officer of the Parent or
the Company learns of the occurrence or existence thereof, give notice in
writing to the Administrative Agent of the occurrence of any Default or
Unmatured Default and (b) within five (5) Business Days after an Authorized
Officer of the Parent or the Company learns of the occurrence or existence
thereof, give notice to the Administrative Agent in writing of (i) any
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litigation or other development (other than the issuance or adoption of any new
federal, state or local statute, regulation or ordinance or any other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect the
business, properties, financial condition or results of operations of the Parent
and its Subsidiaries, taken as a whole, or of the Company and its Subsidiaries,
taken as a whole, or which is reasonably likely to adversely affect the ability
of the Parent, the Company or any of its Subsidiaries to repay the Obligations
as and when due or perform any of their other respective obligations under the
Loan Documents, (ii) the receipt by the Parent, the Company or any of its
Subsidiaries of any notice from any federal, state or local governmental or
regulatory body or authority of the expiration without renewal, termination,
material modification or suspension of, or institution of any proceedings to
terminate, materially modify, or suspend, any license granted by the FCC or any
other license now or hereafter held by the Parent, the Company or any of its
Subsidiaries which is required to operate any of the Radio Stations or
Television Stations in compliance with all applicable laws and regulations,
(iii) any federal, state or local statute, regulation or ordinance or judicial
or administrative order limiting or controlling the broadcast operations of the
Parent, the Company or any of its Subsidiaries which has been issued or adopted
hereafter and which is of material adverse importance or effect in relation to
the operation of any of the Radio Stations or Television Stations (other than
matters affecting the radio broadcast industry generally) or (iv) the timely
filing by any party of an application to the FCC for an authorization for a new
or modified broadcasting station that is in conflict with any of the
applications of the Parent, the Company or any of its Subsidiaries for renewal
of any licenses of the Radio Stations or Television Stations.
Section 3 FINANCIAL RATIOS.
6.3.1. LEVERAGE RATIO. The Company will maintain, at all
times during the periods set forth below, a Leverage Ratio not greater than the
ratio set forth below opposite each such period:
Period Ratio
------ -----
Closing Date - 06/29/97 7.00:1
06/30/97 - 06/29/98 6.75:1
06/30/98 - 06/29/99 6.25:1
06/30/99 - 06/29/00 5.75:1
06/30/00 - 06/29/01 5.25:1
For each fiscal quarter
ending after 06/29/01 4.75:1
PROVIDED, HOWEVER, notwithstanding the foregoing, if (A)(i) any Citicasters
Subordinated Debt remains outstanding, (ii) the Citicasters Put Period has not
expired and (iii) the Company has not entered into a binding commitment with any
Person or Persons to provide Qualified Subordinated Indebtedness in an amount
sufficient to refinance all of the Citicasters Subordinated Debt then
outstanding or (B) a Senior Leverage Step-up Period exists, the Company will
maintain at all times a Leverage Ratio of not greater than 6.5 to 1.
6.3.2. SENIOR LEVERAGE RATIO. The Company will maintain,
at all times during the periods set forth below, a Senior Leverage Ratio not
greater than the ratio set forth below opposite each such period:
Period Ratio
------ -----
Closing Date - 06/29/97 5.50:1
06/30/97 - 06/29/98 5.25:1
06/30/98 - 06/29/99 4.75:1
06/30/99 - 06/29/00 4.50:1
06/30/00 - 06/29/01 4.25:1
For each fiscal quarter
ending after 06/29/01 4.00:1
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PROVIDED, HOWEVER, notwithstanding the foregoing, if (A) the Citicasters Put
Period shall not have expired and (B) a Senior Leverage Step-up Period exists,
the Company will maintain, at all times during such period, a Senior Leverage
Ratio of not greater than 6.5 to 1.
6.3.3. INTEREST COVERAGE. The Company will maintain, as at
the last day of each fiscal quarter ending during the periods set forth below, a
ratio of (a) Operating Cash Flow to (b) Cash Interest Expense, in each case
calculated for the four consecutive fiscal quarters then most recently ended for
the Company and its Subsidiaries on a consolidated basis, not less than the
ratio set forth below opposite each such period; PROVIDED, HOWEVER, (i) for the
period ending on the last day of the first fiscal quarter of the Company ended
after the Closing Date (which quarter may be less than a full fiscal quarter),
Cash Interest Expense shall be annualized based upon the number of days in such
period from the Closing Date to the last day of such first fiscal quarter ended
after the Closing Date, (ii) for the period ending on the last day of the second
fiscal quarter of the Company ended after the Closing Date, Cash Interest
Expense will be the product of (A) the sum of (x) Cash Interest Expense from
clause (b)(i) above divided by 4 PLUS (y) actual Cash Interest Expense for the
period from the first day of such second fiscal quarter to the last day of such
second fiscal quarter, MULTIPLIED BY (B) 2, (iii) for the period ending on the
last day of the third fiscal quarter of the Company ended after the Closing
Date, Cash Interest Expense will be the product of (A) the sum of (x) Cash
Interest Expense set forth in clause (b) (i) above divided by 4 PLUS actual Cash
Interest Expense for the period from the first day of such second fiscal quarter
to the last day of such third fiscal quarter, MULTIPLIED BY (B) 1.33, and (iv)
for the period ending on the last day of the fourth fiscal quarter of the
Company ended after the Closing Date, Cash Interest Expense will be the sum of
(A) an amount equal to the amount of Cash Interest Expense set forth in clause
(b)(i) above DIVIDED BY four, and (B) actual Cash Interest Expense for the
period from the first day of such second fiscal quarter to the last day of such
fourth fiscal quarter:
Period Ratio
------ -----
Closing Date - 06/29/97 1.50:1
06/30/97 - 06/29/98 1.75:1
For each fiscal quarter
ending after 06/29/98 2.00:1
6.3.4. FIXED CHARGE COVERAGE. The Company will maintain,
as at the last day of any fiscal quarter a ratio of (i) Operating Cash Flow to
(ii) Fixed Charges, in each case calculated for the four consecutive fiscal
quarters then most recently ended for the Company and its Subsidiaries on a
consolidated basis, of not less than 1.05 to 1.0; PROVIDED, HOWEVER, that for
each quarterly period ending on the last day of each of the first, second, third
and fourth fiscal quarters of the Company ended after the Closing Date, (A) the
Cash Interest Expense component of Fixed Charges shall be determined as provided
in Section 6.3.3 and (B) the components of Fixed Charges contained in clauses
(iii), (iv) and (v) of the definition of Fixed Charges shall be determined on a
consolidated historical pro forma 12 month trailing basis.
Section 4 CONDUCT OF BUSINESS; MAINTENANCE OF LICENSES. The
Company will, and will cause each of its Subsidiaries to, (a) carry on and
conduct the business of owning and operating the Radio Stations and Television
Stations in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted, provided that broadcast format and
personnel changes shall not be deemed a breach of this clause (a); (b) do all
things necessary to remain duly incorporated, validly existing and in good
standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted; and (c) do all things necessary to renew,
extend and continue in effect all permits, licenses and authorizations which may
at any time and from time to time be necessary to operate the Radio Stations and
Television Stations in compliance with all applicable laws and regulations.
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Section 5 TAXES. The Company will, and will cause each of its
Subsidiaries to, pay, before they become delinquent, all taxes, assessments and
governmental charges and levies upon it or its income, profits or property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Generally Accepted Accounting Principles.
Section 6 INSURANCE. The Company will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all their property in such amounts and covering such
risks as is consistent with sound business practice and is acceptable to the
Required Lenders, and the Company will furnish to any Lender upon request full
information as to the insurance carried and shall maintain the Administrative
Agent and the Lenders as named additional insureds as their interest may appear
on each such policy and each such policy, as appropriate, shall contain a
lender's loss payee endorsement in form and substance satisfactory to the
Administrative Agent in favor of the Administrative Agent on behalf of the
Agents and the Lenders.
Section 7 COMPLIANCE WITH LAWS AND FCC FILINGS IN CONNECTION
WITH LOAN DOCUMENTS. The Company will, and will cause each of its Subsidiaries
to, comply with all laws (including, without limitation, the Communications
Act), rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, including, without limitation, all
Environmental Laws and all rules and regulations promulgated by the FCC and all
FCC authorizations, except where the failure to so comply would not have a
material adverse effect on the business, properties, financial condition or
results of operations of the Parent and its Subsidiaries, taken as a whole, or
of the Company and its Subsidiaries, taken as a whole, and would not result in
the loss, cancellation, rescission, termination or revocation of any broadcast
license granted to the Company or any of its Subsidiaries by the FCC. Within
five days after the Closing Date, the Company shall have made all necessary
filings with the FCC in connection with the execution, delivery and performance
of the Loan Documents and the transactions contemplated thereby, including,
without limitation, the applicable FCC filings set forth in Section 4.1(y) and
on Schedule 5.3 hereto.
Section 8 MAINTENANCE OF PROPERTIES. The Company will, and will
cause each of its Subsidiaries to, do all things necessary to maintain,
preserve, protect and keep its properties in good repair, working order and
condition, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.
Section 9 INSPECTION, ETC. The Company will, and will cause
each of its Subsidiaries to, permit the Administrative Agent and any Lender, by
their respective representatives and agents, to inspect any of the properties,
corporate books and financial records of the Company and each of its
Subsidiaries, to examine and (except in the case of confidential information
relating to the Company's relationship with third parties) make copies of the
books of accounts and other financial records of the Company and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Company
and each of its Subsidiaries with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as any Lender may
designate by reasonable prior notice to the Company. The Company shall provide
to the Administrative Agent such appraisals of the Parent's, the Company's and
each of its Subsidiaries' properties as the Administrative Agent or any Lender
is required to obtain by any law or governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
interpretation thereof, including, without limitation, the provisions of Title
XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989,
and any rules promulgated to implement such provisions.
Section 10 RESTRICTED PAYMENTS. The Company will not, nor will
it permit any of its Subsidiaries to, (a) declare or pay any dividends on its
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capital stock, or return any capital to its stockholders or authorize or make
any other distribution, payment or delivery of property or cash to its
stockholders in respect of its capital stock, (b) redeem, repurchase or
otherwise acquire or retire, directly or indirectly, any of its capital stock or
the capital stock of the Parent at any time outstanding (or any options,
warrants or rights issued with respect to its capital stock) or (c) make any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Subordinated Debt (including, without
limitation, any Indebtedness under the Senior Subordinated Note Documents, the
Citicasters Subordinated Debt Indenture and the Citicasters Subordinated Notes)
or set aside any funds for any of the foregoing purposes (collectively, the
"Restricted Payments"), except: (i) so long as no Default or Unmatured Default
shall have occurred and be continuing or would result therefrom, the Company may
declare and pay dividends to the Parent for the purposes of repurchasing the
Parent's stock but only to the extent such stock repurchases constitute
Permitted Stock Repurchases by the Parent, PROVIDED, HOWEVER, prior to the
payment of any such dividend by the Company, the Parent shall have delivered to
the Administrative Agent an officer's certificate executed by an Authorized
Officer of the Parent stating that the proceeds of such dividends shall be used
by the Parent for the repurchase of Parent's stock which purchase constitutes a
Permitted Stock Repurchase; (ii) so long as no Default or Unmatured Default
shall have occurred and be continuing or would result therefrom, the Company may
declare and pay dividends during any fiscal year in an amount not to exceed 50%
of Excess Cash Flow for the immediately preceding fiscal year, PROVIDED HOWEVER,
in any fiscal year (the "Current Fiscal Year") in which the Leverage Ratio was
equal to or greater than 5.00 to 1.00 at the end of such preceding fiscal year,
the Company shall only be permitted to pay dividends to the Parent in an amount
not to exceed 25% of Excess Cash Flow during the Current Fiscal Year; (iii) any
Wholly-Owned Subsidiary may declare and pay dividends to the Company; (iv) so
long as no Default or Unmatured Event of Default shall have occurred and be
continuing or would result therefrom, the Company may declare and pay dividends
to the Parent in an amount necessary to permit the Parent to satisfy its legally
required obligations in respect of dissenter's rights for shareholders of the
Parent; (v) so long as no Default or Unmatured Default shall have occurred and
be continuing or would result therefrom, the Company may declare and pay
dividends to the Parent for the purposes of repurchasing the Existing Warrants
in an amount, when aggregated with all other dividends made by the Company
pursuant to this Section 6.10(v) on and after the Closing Date, not to exceed
the Warrant Repurchase Cap; PROVIDED, HOWEVER, that prior to the payment of any
such dividend by the Company, the Parent shall have delivered to the
Administrative Agent an officer's certificate executed by an Authorized Officer
of the Parent stating that the Parent has issued the capital stock and the
Liquid Yield Option Notes in an amount necessary to satisfy the requirements of
this Section 6.10(v), that the Parent has made a capital contribution to the
Company in such amount and that the proceeds of such dividends shall be used by
the Parent for the repurchase of the Existing Warrants and (vi) the Company may
make the scheduled periodic payments of interest under the Senior Subordinated
Notes and the Citicasters Subordinated Notes (as in effect on the Closing Date
or as amended in accordance with the terms of this Agreement) in accordance with
the terms thereof, but subject to the subordination provisions contained in the
Senior Subordinated Note Indenture and the Citicasters Subordinated Debt
Indenture. The Parent may use dividends and distributions permitted by clause
(ii) of this Section 6.10 for any corporate purpose, including the repurchase of
Parent's stock; and stock so repurchased shall not be considered to be Permitted
Stock Repurchases in calculating the limitation on Permitted Stock Repurchases.
Section 11 INDEBTEDNESS. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur or suffer to exist any
Indebtedness, except:
(a) Indebtedness under this Agreement and the other Loan
Documents, including, without limitation, Indebtedness consented to by the
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Required Lenders to the extent such Indebtedness is permitted to be incurred
pursuant to Section 8.2(d).
(b) Guarantees (excluding Guarantees of obligations of
Subsidiaries of the Company to the extent that the obligations guaranteed
thereby do not constitute Indebtedness and the obligations so guaranteed are
permitted to be incurred by such Subsidiary hereunder) in an amount not to
exceed, without duplication when aggregated with the Indebtedness permitted
under clauses (d) and (f) of this Section 6.11, $10,000,000 at any one time
outstanding.
(c) Indebtedness of (i) the Company to any Wholly-Owned
Subsidiary (other than an Excluded Subsidiary) provided that any such
Indebtedness is subordinated to the Obligations on subordination terms
satisfactory to the Administrative Agent, (ii) any Wholly-Owned Subsidiary to
any other Wholly-Owned Subsidiary (other than an Excluded Subsidiary) to the
extent, but only to the extent, that the proceeds of such Indebtedness are used
by Subsidiaries of the Company for working capital and other general corporate
purposes of such Subsidiary or (iii) any Wholly-Owned Subsidiary to the Company
(A) to the extent, but only to the extent, that the proceeds of such
Indebtedness are used by such Wholly-Owned Subsidiary for working capital and
other general corporate purposes of such Subsidiary which Indebtedness is
evidenced by Intercompany Demand Notes which have been pledged and delivered to
the Administrative Agent, duly indorsed in blank by the Company, pursuant to the
Company Pledge Agreement or (B) with respect to Intercompany Acquisition Loans,
which Indebtedness is evidenced by Intercompany Acquisition Notes which have
been pledged and delivered to the Administrative Agent, duly indorsed in blank
by the Company, pursuant to the Company Pledge Agreement.
(d) Indebtedness incurred to fund Capital Expenditures to
the extent permitted pursuant to Section 6.18 in an amount not to exceed, when
aggregated with the Indebtedness permitted under clauses (b) and (f) of this
Section 6.11, $10,000,000 at any one time outstanding.
(e) Existing Indebtedness identified on Schedule 6.11(e)
hereto.
(f) Additional Indebtedness in an amount not to exceed,
when aggregated with Indebtedness permitted under clauses (b) and (d) of this
Section 6.11, $10,000,000 at any one time outstanding.
(g) Subordinated Debt incurred by the Company; provided
that (i) such Subordinated Debt shall be issued pursuant to terms (including,
without limitation, maturity, amortization, interest, premiums, fees, covenants,
events of default and remedies) acceptable to the Required Lenders in their sole
discretion, (ii) such Subordinated Debt is subordinated in a manner and pursuant
to subordination terms acceptable to the Required Lenders in their sole
discretion, (iii) no Default or Unmatured Default shall exist at the time such
Subordinated Debt is issued or shall result from the issuance thereof, (iv) the
proceeds from the issuance of such Subordinated Debt are applied pursuant to
Section 2.8(d), (v) the Company shall be in compliance with the financial ratios
set forth in Section 6.3 on a pro forma basis after giving effect to the
incurrence of such Subordinated Debt and (vi) the Company shall have delivered
to the Administrative Agent and each Lender a certificate of an Authorized
Officer of the Company certifying compliance with clauses (iii) through (v)
above, setting forth the calculations with respect thereto.
(h) Indebtedness of the Company incurred pursuant to the
Senior Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000 and Guaranties by Subsidiaries of the Company (other than Excluded
Subsidiaries) of the Indebtedness of the Company under the Senior Subordinated
Notes; provided that (A) such Indebtedness incurred pursuant to such Senior
Subordinated Notes shall be issued pursuant to terms (including, without
limitation, maturity, redemption, amortization, interest, premiums, fees,
covenants, events of default and remedies) acceptable to the Agents and (B) such
Indebtedness incurred pursuant to such Senior Subordinated Notes
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shall be subordinated in a manner and pursuant to subordination terms acceptable
to the Agents.
(i) Indebtedness of the Company pursuant to the Citicasters
Subordinated Notes and the Citicasters Subordinated Debt Indenture in an
aggregate principal amount not to exceed $125,000,000.
Section 12 MERGER. The Company will not, nor will it permit any
of its Subsidiaries to, merge or consolidate with or into any other Person
(other than pursuant to the Citicasters Merger), except that (i) any
Wholly-Owned Subsidiary not holding an FCC Broadcast Station License may merge
into the Company or another Wholly-Owned Subsidiary and (ii) a Subsidiary of the
Company may merge with or into a Subsidiary of the Company or another Person
(other than the Company) in connection with, and for the purpose of
consummating, a Permitted Acquisition. Notwithstanding the foregoing, either a
Subsidiary of the Company which has issued a Subsidiary Guaranty shall be the
surviving corporation or the surviving corporation shall enter into a new
Subsidiary Guaranty, a Subsidiary Security Agreement, a Subsidiary Mortgage and
a Subsidiary Pledge Agreement, if applicable.
Section 13 SALE OF ASSETS. The Company will not, nor will it
permit any of its Subsidiaries to, without the prior written approval of the
Required Lenders, lease, sell, transfer or otherwise dispose of any of its
property, assets or business to any other Person (including, without limitation,
any of its rights under the Noble Documents and the Mexican Documents) (a
"Disposition") except for:
(a) Dispositions of inventory or of equipment which is no
longer useful or is obsolete, in each case in the ordinary course of business;
(b) Dispositions of those assets described in Schedule 6.13
hereto with respect to which the Company or the Parent has entered into
negotiations prior to the date hereof;
(c) Dispositions of Radio Stations or Television Stations
other than Excluded Television Station Sales so long as:
(i) during any four quarter period, the Station
Broadcast Cash Flow of the Radio Stations or Television Stations being
disposed of (other than those which are disposed of as Excluded Television
Station Sales) does not exceed, in the aggregate, 15% of Broadcast Cash
Flow during that four quarter period; and
(ii) the aggregate Station Broadcast Cash Flow of
Radio Stations or Television Stations disposed of since the Closing Date,
including the proposed disposition (but excluding Television Stations
disposed of as Excluded Television Station Sales), would not exceed 30% of
Broadcast Cash Flow for the four quarter period ended immediately prior to
the date of the then-proposed disposition. For the purposes of paragraph
(f) of this Section 6.13 and this paragraph (c), the "Station Broadcast
Cash Flow" of each Radio Station or Television Station disposed of shall
mean the Broadcast Cash Flow of such station for the four quarter period
ended immediately prior to the date such station was disposed of or is
currently proposed to be disposed of. The Station Broadcast Cash Flow so
calculated for each station shall remain the Station Broadcast Cash Flow of
such station for all future calculations of Station Broadcast Cash Flow.
The Company shall deliver a certificate of an Authorized Officer
of the Company to the Administrative Agent on or prior to the date on which the
Company or any of its Subsidiaries makes or proposes to make a Disposition
pursuant to this Section 6.13(c) setting forth calculation in reasonable detail
of the applicable Station Broadcast Cash Flow/Broadcast Cash Flow percentages
resulting from any such Disposition and certifying compliance with this Section
6.13(c);
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(d) Dispositions of Non-broadcast Assets so long as the
proceeds of such Dispositions are applied as Permitted Non-broadcast Proceeds
Applications or to repay Obligations in accordance with the terms and provisions
of Section 2.8(b);
(e) Dispositions in connections with (i) a swap of any
Television Station for one or more radio stations (including, without
limitation, any Television Station acquired as a Television Swap Acquisition
pursuant to Section 6.18(a)) or (ii) a swap of any radio stations or properties
related thereto acquired for cash after the Closing Date for a purchase price of
less than $50,000,000. Any assets received in connection with each such swap
shall have a Fair Market Value, determined in good faith by the Company, at
least equal to the assets transferred by the Company and its Subsidiaries as a
result of such swap; and
(f) Dispositions of Television Stations after the Closing
Date that have Station Broadcast Cash Flow not exceeding $15,000,000 in the
aggregate ("Excluded Television Station Sales").
Notwithstanding the foregoing, no Disposition shall be permitted
under clauses (b) through (f) above (i) if a Default shall have occurred and be
continuing or a Default or Unmatured Default shall result therefrom and (ii)
unless the board of directors of the Company determines in good faith that the
Company or such Subsidiary of the Company, as applicable, receives Fair Market
Value for such Disposition. All of the net cash proceeds of any Disposition
shall be applied as specified in Section 2.8, and all other proceeds shall be
pledged to the Administrative Agent to secure the Obligations, and when and as
such proceeds are reduced to cash, such cash shall be applied as specified in
Section 2.8; provided that, if any Cash Equivalents are received as proceeds
from any such Disposition, all such Cash Equivalents must be converted into or
reduced to cash within two Business Days after the date of any such Disposition
and such cash proceeds must immediately be applied as specified in Section
2.8(b).
The Company will not, nor will it permit any of its Subsidiaries
to, sell, discount (except to the obligor thereof in the ordinary course of
business) or otherwise dispose of any Receivables or any interest therein, with
or without recourse, other than Receivables generated by a Radio Station or a
Television Station which are sold to a purchaser of such Radio Station or such
Television Station, respectively.
Section 14 SALE AND LEASEBACK. The Company will not, nor will
it permit any of its Subsidiaries to, sell or transfer any property in order to
concurrently or subsequently lease as lessee such or similar property.
Section 15 INVESTMENTS AND ACQUISITIONS. The Company will not,
nor will it permit any of its Subsidiaries to, make or suffer to exist any
Investments (including, without limitation, loans and advances to, and other
Investments in, the Company or its Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any partnership or
joint venture, or to make any Acquisition of any interest in any Person, except
for:
(i) Permitted Acquisitions which may be consummated
without violating any of the other terms hereof, provided, that the
Administrative Agent for the benefit of the Agents and the Lenders has
received a perfected first priority security interest in the assets so
acquired or the assets and stock of the Subsidiary so acquired which shall
be used to accomplish any such Acquisition as required pursuant to Section
2.17, provided further, however, that the Lenders agree that the
Administrative Agent will not receive a security interest in either such
assets or stock if and to the extent that such security interest in favor
of the Administrative Agent would violate applicable law; and
(ii) the following Investments, so long as the
Administrative Agent for the benefit of the Agents and the Lenders has
received a per-
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fected first priority security interest in such Investments other than (1)
the Investments described in Section 6.15(c)(iv); (2) the Investments
described in Section 6.15(g) (to the extent that such investments are not
evidenced by stock certificates or other instruments); (3) to the extent
permitted with respect to the Investments described on Schedule 6.15(f)
hereto or (4) Investments described in Section 6.15(h):
(a) Short-term obligations of, or fully guaranteed by, the
United States of America.
(b) Commercial paper rated A-1 or better by Standard and
Poor's Ratings Group or P-1 or better by Moody's Investors Service, Inc. or the
Dreyfus Cash Management Fund or the American AAdvantage Money Market Fund.
(c) Demand deposit accounts maintained in the ordinary
course of business at one or more of the Lenders or pursuant to an account
agreement which shall be satisfactory to the Administrative Agent, and (i) petty
cash in an amount not to exceed, in the aggregate for all Radio Stations and
Television Stations, $300,000 plus an additional $12,000 following any
Acquisition at any time, (ii) accounts established by the Company or any of its
Subsidiaries in connection with promotions with funds and other amounts credited
thereto not to exceed $50,000 in the aggregate at any time, (iii) payroll
accounts, provided that the amount credited thereto shall not on any day exceed
the sum of all payroll checks then outstanding plus the aggregate amount of all
payroll checks to be issued on the next Business Day plus $10,000, (iv) an
account maintained by the Company to fund withdrawals from its 401(k) plan,
provided that amounts credited thereto shall not exceed the sum of all 401(k)
withdrawals then pending plus $500, (v) disbursement accounts, provided that
amounts credited thereto shall not on any day exceed the amount of checks
presented for payment on such account and which remain unpaid, and (vi) funds
held pursuant to customary lock-box arrangements, provided that such funds shall
be deposited in an account maintained at one or more of the Lenders or pursuant
to an account agreement satisfactory to the Administrative Agent not later than
one Business Day after the day on which funds are first deposited in any such
lock-box.
(d) Certificates of deposit issued by and time deposits
with commercial banks (whether domestic or foreign) having capital and surplus
in excess of $500,000,000.
(e) Loans and advances constituting Indebtedness of the
Company or a Wholly-Owned Subsidiary permitted by the terms of Section 6.11(c),
provided that, with respect to any such Indebtedness of a Wholly-Owned
Subsidiary to the Company, such Indebtedness shall be evidenced by an
Intercompany Demand Note or an Intercompany Acquisition Note which has been
pledged and delivered to the Administrative Agent (duly indorsed in blank)
pursuant to the Company Pledge Agreement and shall be secured by substantially
all of the assets of such Subsidiary pursuant to the Intercompany Security
Agreement.
(f) The Investments set forth on Schedule 6.15(f) hereto.
(g) Additional Investments not exceeding, in the aggregate
for the Company and its Subsidiaries, $30,000,000 at any one time outstanding,
provided that no Default shall have occurred and be continuing at the time any
such Investment pursuant to this Section 6.15(g) is made or would result
therefrom, provided further that no such additional Investments shall be made in
any Excluded Subsidiary or in the Parent, Z/C or any of their Affiliates (other
than Subsidiaries of the Company which are not Excluded Subsidiaries).
(h) Funds, in an amount not in excess of $30,000 maintained
in a segregated account at Society National Bank of Cleveland, in which the
Administrative Agent and the Lenders shall not have a Lien, which funds shall be
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used for the purpose of making payments in respect of cash option elections and
fractional shares and fractional warrants.
Section 16 GUARANTIES. The Company will not, nor will it permit
any of its Subsidiaries to, make or suffer to exist any Guaranty (including,
without limitation, any Guaranty of the obligations of a Subsidiary of the
Company), except (a) Guaranties arising under the Collateral Documents, (b)
those Guaranties identified on Schedule 6.11(e), (c) Guaranties of obligations
of Subsidiaries of the Company to the extent that the obligations guaranteed
thereby do not constitute Indebtedness and the obligations so guaranteed are
permitted to be incurred by such Subsidiary hereunder and (d) Guaranties
permitted under Section 6.11(b) and Section 6.11(f).
Section 17 LIENS. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on
any of the property or assets of the Company or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its property and assets if the same shall not, at the time, be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings diligently conducted and with respect
to which the Company or such Subsidiary is maintaining adequate reserves in
accordance with Generally Accepted Accounting Principles.
(b) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
are being contested in good faith and by appropriate proceedings diligently
conducted and with respect to which the Company or such Subsidiary is
maintaining adequate reserves in accordance with Generally Accepted Accounting
Principles.
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation and deposits made in the
ordinary course of business to secure obligations to public utilities and under
leases and contracts (other than contracts for Indebtedness).
(d) Utility easements, building restrictions, reservations,
encroachments, easements, exceptions, rights-of-way, covenants, conditions and
such other title exceptions, encumbrances or charges against real property as
are of a nature generally existing with respect to properties of a similar
character and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Company or its
Subsidiaries.
(e) Attachments, judgments and other similar Liens arising
in connection with court proceedings, provided, that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being contested in good faith by appropriate proceedings diligently
conducted.
(f) Liens on property of a Subsidiary of the Company,
provided that such Liens secure only obligations owing by such Subsidiary to the
Company or another Subsidiary of the Company and are assigned to the
Administrative Agent for the ratable benefit of the Lenders.
(g) Liens in favor of the Administrative Agent and the
Lenders created pursuant to the Collateral Documents.
(h) Liens granted to secure the Indebtedness permitted by
Section 6.11(d) or (f), provided that no such Lien shall extend to any property
other than the property purchased concurrently with the incurrence of such
Indebtedness.
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(i) Existing Liens identified on Schedule 6.17(i) hereto.
Section 18 CAPITAL EXPENDITURES. The Company will not, nor will
it permit any of its Subsidiaries to, make, or commit to make, without double-
counting, Capital Expenditures (other than Capital Expenditures made with
insurance proceeds to repair or replace damaged, destroyed, lost or stolen fixed
assets not in excess of $5,000,000 per fiscal year and Capital Expenditures
financed with Net Cash Proceeds from the asset sales made by the Company and its
Subsidiaries in the ordinary course of their respective businesses which are
permitted to be retained by the Company and its Subsidiaries pursuant to Section
2.8) other than the following:
(a) Permitted Acquisitions.
(b) Capital Expenditures incurred by the Company and its
Subsidiaries in connection with broadcast radio or television operations owned
or managed by the Company and its Subsidiaries on the Closing Date in an amount
not to exceed the sum of $8,500,000 PLUS the applicable New Station Capex
Increase (if any) in the aggregate during any fiscal year of the Company
(collectively "Existing Radio Expenditure Maximum").
(c) Capital Expenditures incurred by the Company and its
Subsidiaries in connection with broadcast radio or television stations (other
than those referred to in clause (b) of this Section 6.18) which are acquired by
the Company and its Subsidiaries after the Closing Date (each, a "New Station")
in an amount not to exceed $300,000 for each such New Station or multiple New
Stations using a single facility during the fiscal year in which such radio
operations are first acquired ("New Radio Expenditure Maximum").
(d) Capital Expenditures incurred by the Company and its
Subsidiaries in connection with the acquisition of a studio facility in Tampa,
Florida in an amount not to exceed $3,000,000.
Notwithstanding the foregoing, if in any fiscal year of the
Company, the Company expends or commits to expend, without double-counting, less
than the Existing Radio Expenditure Maximum or the New Radio Expenditure Maximum
for any broadcast radio station, an amount equal to the difference between the
Existing Radio Expenditure Maximum or the New Radio Expenditure Maximum for any
broadcast radio station, as the case may be, and the amount actually expended or
committed to be expended, without double-counting, in such fiscal year may be
expended in the immediately subsequent fiscal year in addition to the Existing
Radio Expenditure Maximum or the New Radio Expenditure Maximum for such
broadcast radio station, respectively, otherwise permitted to be expended in
such subsequent year.
Section 19 RENTALS. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur or suffer to exist obligations for
Rentals in excess of $10,000,000 during any one fiscal year in the aggregate for
the Company and its Subsidiaries.
Section 20 AFFILIATES. Except for transactions described in
Schedule 6.20 hereto, the Company will not, and will not permit any of its
Subsidiaries to, enter into any transaction (including, without limitation, the
purchase or sale of any property or service), with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would obtain in a comparable
arm's-length transaction and except that the Company and its Subsidiaries may
enter into tax sharing arrangements with the Parent pursuant to which the
Company and its Subsidiaries may make payments to the Parent with respect to the
Company's federal, state, or local income or franchise tax liabilities where the
Company is included in a consolidated, unitary or combined return filed by the
Parent pursuant to an agreement in form and substance acceptable to the Agents;
provided that the aggregate amount of payments made by the Company and its
Subsidiaries pursuant to any such
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agreement shall not exceed the hypothetical stand-alone liability of the Company
and its Subsidiaries for such taxes (determined as if the Company and its
Subsidiaries were a separate consolidated, unitary or combined group).
Section 21 MANAGEMENT FEES. The Company will not, nor will it
permit any of its Subsidiaries to, pay or become obligated to pay, any
management or other similar fee to Z/C, any of its Affiliates or the Parent
other than (a) to Z/C or any of its Affiliates for reasonable and customary fees
for services actually rendered by professionals, (b) to the Parent to reimburse
the Parent for actual, reasonable out-of-pocket administrative, accounting,
legal and rent expense incurred directly by the Parent on behalf of the Company
and its Subsidiaries in the ordinary course of business and pursuant to the
reasonable requirements of the Company's and its Subsidiaries' business and (c)
the Company may pay to the Parent an annual management fee ("Annual Management
Fee") payable only one time during the last ten days of each calendar year, in a
maximum amount equal to $100,000 in excess of the original issue discount on the
Liquid Yield Option Notes for such calendar year. The Annual Management Fee may
be paid in cash; provided that any payments received by Parent are subject to
the provisions of the Parent Guaranty.
Section 22 INTEREST RATE PROTECTION, ETC.
(a) At any time when the one-month Eurodollar Base Rate
equals or exceeds 8.00% per annum, the Company shall enter into (to the extent
it has not already done so) interest rate protection agreements (each, a "Rate
Hedging Agreement") with one or more financial institutions (provided that such
financial institution or financial institutions are offering terms and
conditions generally available within the applicable market at such time), which
Rate Hedging Agreements, when taken together, shall have an aggregate notional
principal amount at least equal to 50% of the aggregate principal amount of the
Loans outstanding on the date of such agreement (the "Hedged Amount") pursuant
to which the effective interest rate (inclusive of all fees and costs related to
the Rate Hedging Agreements) payable by the Company with respect to such Hedged
Amount will be fixed or capped at a rate no greater than 8.00% per annum plus
the Applicable Margin for a period ending not earlier than the third anniversary
of the first date on which such interest rate equals or exceeds 8.00% per annum.
All obligations by the Company to any Lender (or an Affiliate thereof) under any
Rate Hedging Agreement shall be secured by the Collateral, PARI PASSU, with the
Obligations under the Loan Documents and shall be guaranteed pursuant to the
Parent Guaranty and the Subsidiary Guaranty.
(b) Neither the Company nor any of its Subsidiaries shall
enter into or become liable (directly or indirectly, absolutely or contingently)
in any way under or with respect to any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
or similar agreements) or any currency swaps or similar agreements except as
required under Section 6.22(a) and except for such other interest rate
protection agreements entered into by the Company (provided that any such
agreements shall not be speculative in nature) with an aggregate notional
principal amount, when combined with the notional principal amount of any Rate
Hedging Agreements then maintained pursuant to Section 6.22(a), not in excess of
the outstanding principal amount of the Loans at such time.
Section 23 CERTAIN AGREEMENTS. The Company shall not, and shall
not permit any of its Subsidiaries to, enter into, assume or otherwise become
liable under any agreement (other than the Loan Documents) which restricts the
ability of the Company or any of its Subsidiaries to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, or (e) make any
Restricted Payment, provided that (1) Capital Leases or agreements governing
purchase money Indebtedness which contain restrictions of the types referred to
in clauses (b) or (c) with respect to the property covered thereby and contracts
entered into in the ordinary course of business which contain standard
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non-assignment clauses shall be permitted and (2) restrictions of the types
referred to in clauses (b) through (e) in the Citicasters Subordinated Debt
Indenture and in the Senior Subordinated Note Indenture shall be permitted.
Section 24 FISCAL YEAR; FISCAL QUARTER. The Company shall not,
and shall not permit any of its Subsidiaries to, change its fiscal year or any
of its fiscal quarters.
Section 25 AMENDMENT TO OTHER AGREEMENTS. The Company shall
not, and shall cause its Subsidiaries not to, amend, modify or waive any
provision of the Intercompany Security Agreement, any Intercompany Demand Notes
or any Intercompany Acquisition Notes without the prior written consent of the
Administrative Agent on behalf of the Required Lenders. The Company shall not,
and shall cause its Subsidiaries not to, amend, restate or otherwise modify or
waive any provision of any of the Senior Subordinated Note Documents, the
Citicasters Subordinated Notes, the Citicasters Subordinated Debt Indenture or
the Parent Contribution Documents without the prior written consent of the
Administrative Agent and the Required Lenders.
Section 26 SUBSIDIARY OPERATIONS. The Company will not, nor
will it permit any of its Subsidiaries to, activate, make any further Investment
in or contribute any assets to an Excluded Subsidiary and the Company will not
permit any Excluded Subsidiary to incur any Indebtedness or other obligations
other than Indebtedness to the Company existing on the Closing Date. The
Company will not, nor will it permit any of its Subsidiaries to, make any
further Investment in or contribute any assets to Georgia Network Equipment,
Inc. or permit Georgia Network Equipment, Inc. to change its business as
operated on the Closing Date or to incur any Indebtedness or other obligations
or to purchase any other assets except for purchases of satellite dishes and
related equipment in an aggregate amount not to exceed $100,000.
Section 27 FCC LICENSES. The Company shall not obtain or hold,
or be licensee under, any FCC Broadcast Station License.
Section 28 DEPOSIT ACCOUNTS. The Company shall not, and shall
not permit any of its Subsidiaries to, open any new deposit accounts with any
bank or other financial institution (other than petty cash and promotional
accounts to the extent the same are permitted under Section 6.15) without the
prior written consent of the Administrative Agent.
Section 29 AMENDMENTS AND WAIVERS TO CITICASTERS DOCUMENTS,
NOBLE DOCUMENTS, THE MEXICAN DOCUMENTS AND THE EMPLOYMENT AGREEMENTS. Without
the prior written consent of the Administrative Agent and the Required Lenders,
the Company shall not, and shall not permit any of its Subsidiaries to, enter
into any material amendment to, or grant any material waiver, release or consent
with respect to, any of the terms and conditions of any of the Citicasters
Documents, the Noble Documents, the Mexican Documents or the Employment
Agreements, PROVIDED THAT in any event, no such amendment, waiver or consent
shall have any effect on the enforceability of any of the Citicasters Documents,
the Noble Documents, the Mexican Documents or the Employment Agreements, or on
the ability of the Parent, the Company or any of its Subsidiaries party thereto
or the Administrative Agent, on behalf of the Lenders, to enforce such
agreements pursuant to any of the terms and conditions thereof or pursuant to
the Collateral Documents or otherwise.
Section 30 COLLATERAL ASSIGNMENTS. The Company shall, and shall
cause each of its Subsidiaries to, enter into and deliver to the Administrative
Agent a Collateral Assignment for each Joint Sales Agreement and each Local
Marketing Agreement to which the Company or any of its Subsidiaries is a party
upon or prior to entering into any such Joint Sales Agreement or Local Marketing
Agreement, respectively, duly acknowledged by the other party or parties
thereto; provided that with respect to any such Joint Sales Agreement or Local
Marketing Agreement entered into by the Parent, the Company or any of its
Subsidiaries prior to the Closing Date, the Company and its Subsidiaries shall
have used their best efforts to obtain the acknowledge-
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ment to such Collateral Assignment of the other party or parties to such Local
Marketing Agreement or Joint Sales Agreement.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
Section 1 BREACH OF REPRESENTATION OR WARRANTY. Any
representation or warranty made or deemed made by or on behalf of the Parent,
the Company or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any other Loan Document, or
any certificate or information delivered in connection with this Agreement or
any other Loan Document shall be materially false or misleading on the date as
of which made or deemed made.
Section 2 FAILURE TO MAKE PAYMENTS. (a) Nonpayment of
principal of any Loan when due.
(b) Nonpayment of interest upon any Loan or of any fees or
other obligations under any of the Loan Documents within three (3) Business Days
after the same becomes due.
(c) Failure of any "Guarantor" (as defined in the Mexican
Guaranty) to make any payment when due or perform any obligation pursuant to the
terms and provisions of the Mexican Guaranty, which failure continues unremedied
for a period of thirty (30) days after the occurrence of any such failure.
Section 3 BREACH OF CERTAIN COVENANTS. The Company shall
default in the due performance or observance of any term, covenant or agreement
contained in (a) Section 6.2 (other than Section 6.2(a)) and such default shall
continue unremedied for a period of fifteen (15) days or (b) Section 6.1, 6.4,
6.5, 6.6, 6.7 or 6.8 or the last sentence of Section 6.9 and such default shall
continue unremedied for a period of thirty (30) days.
Section 4 OTHER DEFAULTS. The breach by the Company (other than
a breach which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of
the terms or provisions of this Agreement.
Section 5 DEFAULT UNDER OTHER AGREEMENTS. Failure of the
Parent, the Company or any of its Subsidiaries to pay any Indebtedness (other
than the Obligations) in excess of $2,000,000 in the aggregate when due; or the
default by the Parent, the Company or any of its Subsidiaries in the performance
of any term, provision or condition contained in any agreement under which any
such Indebtedness (other than the Obligations) was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity (other than any mandatory redemption of the Citicasters Subordinated
Notes pursuant to the Citicasters Change of Control Put); or any such
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled or contractually provided for payment
(other than pursuant to an acceleration or similar clause)) prior to the stated
maturity thereof.
Section 6 BANKRUPTCY, ETC. The Parent, the Company or any of
its Subsidiaries shall (a) have an order for relief entered with respect to it
under the Federal Bankruptcy Code, (b) not pay, or admit in writing its
inability to pay, its debts generally as they come due, (c) make an assignment
for the benefit of creditors, (d) apply for, seek, consent to, or acquiesce in,
the appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any substantial part of its property, (e) institute
any proceeding seeking an order for relief under the Federal Bankruptcy Code
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or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (f)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6 or (g) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
Section 7 APPOINTMENT OF RECEIVER. Without the application,
approval or consent of the Company or any of its Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Parent, the Company or any of its Subsidiaries or any substantial part of its
property, or a proceeding described in Section 7.6(e) shall be instituted
against the Parent, the Company or any of its Subsidiaries and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 60 consecutive days.
Section 8 CONDEMNATION, ETC. Any court, government or
governmental agency shall condemn, seize or otherwise appropriate, or take
custody or control of all or any substantial portion of the assets of the
Parent, the Company or any of its Subsidiaries. For purposes of this Section
7.8, "substantial portion" means assets (valued at the higher of book or fair
market value) having a value in excess of 10% of the consolidated assets of the
Company and its Subsidiaries.
Section 9 JUDGMENTS. The Parent, the Company or any of its
Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge any
judgment or order for the payment of money in excess of $2,000,000, which is not
stayed on appeal or otherwise being appropriately and diligently contested in
good faith by appropriate proceedings, unless the payment of all such amounts in
excess of $2,000,000 is fully insured by a financially responsible insurance
company.
Section 10 ERISA. (a) With respect to any Parent Plan, a
Reportable Event shall have occurred which is reasonably likely to result in the
Parent, the Company or any of its Subsidiaries incurring a liability or
obligation to such Plan in excess of $4,000,000; or
(b) With respect to any Plan (other than a Parent Plan), a
Reportable Event shall have occurred which is reasonably likely to result in the
Parent, the Company and/or its Subsidiaries being obligated to make a payment in
excess of $4,000,000; or
(c) The PBGC, the Company, any Subsidiary of the Company,
any ERISA Affiliate of the Parent, the Company or any Subsidiary of the Company
or any other Person shall have initiated steps to terminate a Plan, or to have a
trustee appointed for a Plan under Section 4042 of ERISA, if as the result of
such appointment or termination, the Parent, the Company or any of its
Subsidiaries is reasonably likely to be required to make a contribution to such
Plan, or to incur liability or obligation to such Plan, or the PBGC, in excess
of $4,000,000; or
(d) The Parent, the Company, any of its Subsidiaries or any
of their ERISA Affiliates shall have terminated, reorganized or withdrawn from a
Multiemployer Plan, if as the result of such withdrawal, termination or
reorganization the Parent, the Company or any of its Subsidiaries incurs a
liability to such Multiemployer Plan in excess of $4,000,000, which liability is
not paid when required by applicable law (unless it is being appropriately and
diligently contested in good faith by appropriate proceedings); or
(e) The Parent, the Company or any of its Subsidiaries
shall have received any notice from the PBGC (and such notice shall either
demand payment from the Parent, the Company or any of its Subsidiaries or shall
suggest or indicate that the PBGC may initiate an administrative or judicial
action against the Parent, the Company or any of its Subsidiaries)
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with respect to Unfunded Liabilities in excess of $4,000,000 of any Plan, or the
PBGC shall have initiated an administrative or judicial action with respect to
Unfunded Liabilities in excess of $4,000,000 of any Plan.
Section 11 DEFAULT UNDER LOAN DOCUMENTS. The occurrence of any
"default", as defined in any Loan Document (other than this Agreement or the
Notes), or the breach of any of the terms or provisions of any Loan Document
(other than this Agreement or the Notes), which default or breach continues
beyond any period of grace therein provided.
Section 12 GUARANTEES. Any obligation of any Subsidiary of the
Company under the Subsidiary Guaranty shall fail to remain in full force and
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any obligation of any Subsidiary of the Company under the
Subsidiary Guaranty, or any Subsidiary of the Company denies that it has any
further liability under any Subsidiary Guaranty to which it is a party, or gives
notice to such effect. Any obligation of the Parent under the Parent Guaranty
shall fail to remain in full force and effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any obligation of
the Parent under the Parent Guaranty, or the Parent denies that it has any
further liability under the Parent Guaranty, or gives notice to such effect.
Section 13 COLLATERAL DOCUMENTS. Any Collateral Document shall
for any reason fail to create a valid and perfected first priority security
interest in any Collateral purported to be covered thereby, except as permitted
by the terms hereof or of such Collateral Document, or shall fail to remain in
full force and effect, or any action shall be taken to discontinue or to assert
the invalidity or unenforceability of any Collateral Document.
Section 14 LICENSES. (a) Any license, authorization, consent
or permit necessary for the ownership or essential for the operation of any of
the Radio Stations or Television Stations by the Company or any of its
Subsidiaries (a "License") shall expire, and on or prior to such expiration, the
same shall not have been or be in the process of being renewed or replaced by
another license, authorization, consent or permit authorizing substantially the
same operations of the Radio Stations or Television Stations by the Company or
any of its Subsidiaries; or
(b) (i) any License (A) shall be cancelled, revoked,
terminated, rescinded, annulled, suspended or modified in a materially adverse
respect, or (B) shall no longer be in full force and effect and shall not be in
the process of renewal or replacement or (ii) the grant or the effectiveness of
any such License shall have been stayed, vacated, reversed or set aside, and, in
each case, such action shall be no longer subject to further administrative or
judicial review; or
(c) in any renewal or revocation proceeding involving any
license necessary for the ownership or essential for the operation of any of the
Radio Stations or Television Stations, any administrative law judge of the FCC
(or successor to the functions of an administrative law judge of the FCC) shall
have issued an initial decision to the effect that the Company or any of its
Subsidiaries lacks the qualifications to hold any FCC broadcast license, and
such initial decision shall not have been timely appealed or shall otherwise
have become an order that is final and no longer subject to further
administrative or judicial review or such administrative law judge shall issue a
favorable determination on such matters, which determination shall subsequently
be reversed on appeal;
PROVIDED, HOWEVER, that none of the foregoing events described in this Section
7.14 shall constitute a Default if, assuming the final non-appealable loss by
the Company or any of its Subsidiaries of any such License at the conclusion of
all legal proceedings incident thereto, such loss would, individually or in the
aggregate with any such other losses after the Closing Date, not result in the
loss of a License or Licenses for Radio Stations or Television Stations which
generate in the aggregate in excess of 10% of the Broadcast Cash Flow of
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the Company and its Subsidiaries on a consolidated basis, provided that such
percentage shall be calculated for the four quarter period ended immediately
prior to the date on which any such loss of a License or Licenses occurs and
each such quarterly calculation shall be aggregated with all such other
percentage calculations with respect to any other Licenses lost from and after
the Closing Date.
Section 15 LIENS. Any Person shall take any action to enforce,
foreclose upon or take similar action with respect to any Lien (whether or not
permitted by the terms of this Agreement) on any material item or amount of
Collateral.
Section 16 CHANGE OF CONTROL. If (a) the Parent shall cease to
own, free and clear of all Liens except as contemplated by the Parent Pledge
Agreement, 100% of the issued and outstanding capital stock of the Company, (b)
so long as any Citicasters Subordinated Debt remains outstanding, any event or
condition exists or arises which constitutes a "Change of Control" as such term
is defined in the Citicasters Subordinated Debt Indenture as in effect on the
Closing Date (other than any such Change of Control occurring as a result of the
Citicasters Merger), (c) so long as any Liquid Yield Option Notes remain
outstanding and the Citicasters Subordinated Debt has been repaid in full, any
event or condition exists or arises which constitutes a "Change of Control" as
defined in the Liquid Yield Option Notes Indenture as in effect on the Closing
Date, (d) so long as any Senior Subordinated Notes remain outstanding, any event
or condition exists or arises which constitutes a "Change of Control" as such
term is defined in the Senior Subordinated Note Indenture as in effect on the
Closing Date or (e) Z/C shall at any time fail to have its designees constitute
at least 30% in number of the members of the Parent's board of directors.
Section 17 PREPAYMENT OR REDEMPTION WITH RESPECT TO CERTAIN
INDEBTEDNESS. If (a) the Parent shall become obligated to make an offer or
otherwise makes an offer to purchase or to redeem any Liquid Yield Option Notes
or any portion thereof in cash prior to the maturity thereof (except for
obligations in connection with any cash payments due with respect to any
fractional shares of Common Stock of the Parent) for any reason or (b) the
Company shall become obligated to make an offer to purchase or to redeem any
Senior Subordinated Notes, any Citicasters Subordinated Notes or any other
Subordinated Debt (other than any redemption of the Citicasters Subordinated
Notes required as a result of the Change of Control with respect to the
Citicasters Merger) or any portion thereof prior to the maturity thereof or the
Parent or any Subsidiary of the Company shall become obligated with respect
thereto.
Section 18 NOBLE DOCUMENTS AND MEXICAN DOCUMENTS. Any of the
following events shall occur with respect to any of the following Noble
Documents or Mexican Documents:
(a) The Stock Closing shall not occur on the Stock Closing
Date (as each such term is defined in the Noble Stock Purchase and Warrant
Redemption Agreement) in accordance with the provisions of the Noble Stock
Purchase and Warrant Redemption Agreement, in each case, as in effect on the
Closing Date or as amended in accordance with Section 6.29.
(b) Within 20 Business Days of the receipt of the Mexican
Approval, the Mexican Concession of R.D.P. shall not have been transferred to
XETRA Communicaciones, S.A. de C.V. in accordance with the Mexican Documents.
(c) An Event of Default under (and as defined in) the
Noble- Company Credit Agreement (as in effect on the Closing Date) (i) arising
pursuant to either Section 7.1 or 7.2 thereof shall have occurred and be
continuing (after giving effect to any applicable grace periods set forth in the
Noble- Company Credit Agreement) and such Event of Default shall remain
unremedied for a period of 90 days after the occurrence thereof, or (ii) arising
pursuant to any other Section of the Noble-Company Credit Agreement if, with
respect to clause (ii) of this Section 7.17(c), such breach would be
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reasonably expected to have a material adverse effect on the business,
operations or condition (financial or otherwise) of the Parent and its
Subsidiaries, taken as a whole, or of the Company and its Subsidiaries, taken as
a whole.
(d) The Parent or any of its Affiliates shall take any
action to discontinue or to assert the invalidity or unenforceability of any
obligation of any such Person (including, without limitation, the Parent or any
such Affiliates) under any of the Noble Documents or any of the Mexican
Documents, or the Parent or any of its Affiliates denies that it is obligated to
perform any of its obligations under the terms of any Noble Document or any
Mexican Document, or gives notice to such effect.
(e) (i) Any Person party to any of the Noble Documents or
any of the Mexican Documents shall fail to perform any term or condition of the
Noble Documents or the Mexican Documents, as the case may be, in accordance with
the respective terms thereof, or (ii) any obligation of any Person under any of
the Noble Documents or any of the Mexican Documents shall fail to remain in full
force or effect, and in the case of subclauses (i) or (ii) of this Section
7.17(e), such failure would be reasonably expected to have a material adverse
effect on the business, operations or condition (financial or otherwise) of the
Parent and its Subsidiaries, taken as a whole, or of the Company and its
Subsidiaries, taken as a whole.
(f) The Parent, the Company or any of its Subsidiaries
shall fail to actively pursue, on a best efforts basis, any of its material
rights or remedies under any of the Noble Documents or any the Mexican
Documents.
Section 19 PARENT CONTRIBUTION DOCUMENTS. The Parent shall fail
to make any payment to the Company when due pursuant to any Parent Contribution
Document, or any obligation of the Parent under any Parent Contribution Document
shall fail to remain in full force and effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any obligation of
the Parent under any Parent Contribution Document, or the Parent denies that it
has any further liability under any Parent Contribution Document, or gives
notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 1 ACCELERATION. If any Default described in Section 7.6
or 7.7 shall occur with respect to the Company or the Parent, the Aggregate
Commitment and the obligation of the Lenders to make Loans hereunder shall
automatically and immediately terminate and the unpaid principal amount of the
Loans and all of the other Obligations shall automatically and immediately
become due and payable without any election or action on the part of the
Administrative Agent or any Lender and without presentment, demand, protest or
notice or any other requirement of any kind, all of which the Company hereby
expressly waives. If any other Default shall occur and be continuing, upon the
direction of the Required Lenders the Administrative Agent shall, (i) declare
that the Aggregate Commitment is terminated, whereupon the Aggregate Commitment
and the obligation of the Lenders to make Loans hereunder shall be immediately
terminated and (ii) declare the unpaid principal amount of the Loans and the
other Obligations to be due and payable, whereupon the same shall immediately be
and become due and payable, without presentment, demand, protest or notice or
any other requirement of any kind, all of which the Company hereby expressly
waives. If any Default shall occur and be continuing, upon direction of the
Required Lenders, the Administrative Agent shall require the Company to Cash
Collateralize the Letters of Credit in an amount equal to the maximum aggregate
amount that is, or at any time thereafter may become, available for drawing
under any outstanding Letters of Credit (whether or not any beneficiary shall
have presented, or shall be entitled at
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such time to present, the drafts or other documents required to draw under such
Letters of Credit)
Section 2 AMENDMENTS. Subject to the provisions of this Article
VIII and except as otherwise provided in any Loan Document, amendments or
agreements supplemental hereto (and thereto, with respect to the relevant
Subsidiary of the Company in the case of the Subsidiary Guaranty, the Subsidiary
Security Agreement, a Subsidiary Pledge Agreement, a Subsidiary Trademark
Agreement or a Subsidiary Mortgage and the Parent in the case of the Parent
Guaranty or the Parent Pledge Agreement) may be entered into for the purpose of
adding or modifying any provisions of this Agreement or any of the other Loan
Documents or changing in any manner the rights of the Lenders or the Parent, the
Company or any of its Subsidiaries hereunder or thereunder or waiving any
Default hereunder or thereunder ("Amendments"), under the terms and in the
manner set forth below:
(a) Except as provided in clauses (d) below, with respect
to Amendments that forgive or reduce principal or interest or reduce the
interest rate payable with respect to any Loan or Obligation or postpone any
date fixed for any regularly-scheduled payment (other than with respect to
prepayments under clauses (b) through (g) of Section 2.8) of principal of, or
interest on, any such Loan or Obligation, postpone any Revolving Loan Commitment
Reduction Date or any Term Loan Payment Date, increase the amount of the
Aggregate Commitment, the Aggregate Revolving Loan Commitment, the Aggregate
Term A Loan Commitment, the Aggregate Term B Loan Commitment, the Revolving Loan
Commitment, the Term A Loan Commitment or the Term B Loan Commitment, postpone
the Revolving Loan Termination Date, the Term A Loan Maturity Date, the Term B
Loan Maturity Date, reduce any Revolving Loan Commitment Reduction Amount,
change the definition of Leverage Ratio (to the extent that the same would
affect the Applicable Margin) or amend or waive Section 2.4 (or amend the
definition of any of the terms used in such Section to the extent that the same
would affect the Applicable Margin), amend or waive Section 12.1 hereof or waive
the payment of or reduce or defer any fees payable to the Lenders hereunder,
consent to or permit the assignment or transfer by the Parent, the Company or
any of its Subsidiaries of any of its rights or obligations under any of the
Loan Documents, amend or waive this Section 8.2, change the definition of
"Amendment," reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement or any other Loan Document to act on specified
matters or release any guarantor or release all or any substantial portion of
the Collateral from the Liens created by the Collateral Documents (except as may
be expressly contemplated in the Loan Documents), all of the Lenders must
approve such Amendments in writing; PROVIDED, that nothing contained in this
Section 8.2(a) shall restrict the ability of the Required Lenders to make
determinations provided in the definition of Operating Cash Flow;
(b) With respect to Amendments that delay or reduce the
amount of any mandatory prepayment or Revolving Loan Commitment Reduction Amount
pursuant to any mandatory prepayment hereunder (other than as set forth in
Section 8.2(a)), Lenders whose Pro Rata Shares in the aggregate are at least 85%
must approve such Amendment in writing;
(c) With respect to Amendments that (i) (A) modify the pro
rata nature of prepayment requirements with respect to any of the Lenders under
this Agreement, (B) modify the ratable sharing of prepayments or (C) modify the
ratable sharing of proceeds from the Collateral among any of the Lenders under
this Agreement and (ii) adversely affect Lenders holding any class of Loans,
Lenders holding such class of Loans representing not less than 66-2/3% of the
aggregate amount of such class of Loans must approve such Amendments in writing;
(d) With respect to any Amendment requested by the Company
which would increase the Aggregate Revolving Loan Commitment under this
Agreement (the "Revolving Commitment Increase"), Lenders constituting the
Required Lenders must approve any such Amendment provided that the following
conditions
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are met with respect to such Amendment: (i) the aggregate principal amount of
the Revolving Commitment Increase permitted pursuant to such Amendment shall not
exceed $75,000,000 in the aggregate, (ii) the Company shall make an offer to
each of the Lenders party to this Agreement on the date such request is sent to
the Lenders, simultaneously to each Lender in writing to participate in the
Aggregate Revolving Loan Commitment to the extent of the Revolving Commitment
Increase in an amount based on each Lender's Pro Rata Share on the date of such
notice by delivering a notice to the Administrative Agent which notice shall be
distributed to each Lender and shall specify: (A) the date on which the
Aggregate Revolving Loan Commitment is to be increased and Revolving Loans are
to be available for borrowing thereunder (which date shall be not less than 30
days and not more than 60 days after the delivery of such notice to the
Administrative Agent) and (B) the amount of such requested Revolving Commitment
Increase, (iii) the Company shall not offer any other Person an opportunity to
participate in the Aggregate Revolving Loan Commitment until 60 days after the
Lenders have received the offer sent by the Company as set forth in clause (ii)
above (the "Offer Expiration Date") and the Company must accept all acceptances
by such Lenders received by the Company by such date in response to the
Company's offer if the Company accepts any such offers (it being agreed that no
Lender shall have any obligation to participate in the Revolving Commitment
Increase and any decision by any Lender to accept or not accept such offer shall
be in each Lender's sole discretion, and any failure to respond by any Lender by
the end of the Offer Expiration Date shall be deemed to be a rejection by such
Lender), (iv) the Aggregate Revolving Loan Commitment shall only be increased
one time pursuant to this Section 8.2(d) (all other increases being subject to
Section 8.2(a)), (v) the Company shall, and shall cause each of its Subsidiaries
to, execute and deliver to the Administrative Agent any financing statements and
other documents and take such further actions from time to time reasonably
requested by the Administrative Agent in order to maintain a first priority
perfected security interest in the Collateral as contemplated by the Collateral
Documents and deliver to the Administrative Agent and the Lenders any legal
opinions reasonably requested by the Administrative Agent or the Required
Lenders and (vi) the Administrative Agent shall have received satisfactory
reports of Uniform Commercial Code filings, tax lien, judgment and litigation
searches requested by the Administrative Agent conducted by a search firm
acceptable to the Administrative Agent.
(e) With respect to any other Amendment, the Lenders then
constituting the Required Lenders must approve such Amendments in writing.
No amendment of any provision of this Agreement or any other Loan
Document relating to any Agent shall be effective without the written consent of
such Agent including, without limitation, any provision of Article X.
Section 3 PRESERVATION OF RIGHTS. No delay or omission of the
Lenders or the Agents to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or the inability of the Company to satisfy the conditions precedent to
such Loan shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude any other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Company, the Parent,
its Subsidiary(ies) party thereto and the Agents and by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agents and the
Lenders until the Obligations have been paid in full.
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ARTICLE IX
GENERAL PROVISIONS
Section 1 SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Company contained in this Agreement shall survive delivery of
this Agreement and the Notes and shall continue in full force and effect until
the Obligations have been paid in full.
Section 2 GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Company in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Section 3 TAXES. Any stamp, documentary and similar taxes and
taxes in connection with the execution, delivery, filing or recordation of any
of the Loan Documents shall be paid by the Company.
Section 4 HEADINGS. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of the Loan Documents.
Section 5 ENTIRE AGREEMENT. The Loan Documents embody the
entire agreement and understanding among the Company, its Subsidiaries, the
Parent, the Agents and the Lenders and supersede all prior agreements and
understandings among the Company, its Subsidiaries, the Parent, the Agents and
the Lenders relating to the subject matter thereof.
Section 6 SEVERAL OBLIGATIONS. The respective obligations of
the Lenders hereunder are several and not joint and no Lender shall be the
partner or agent of any other (except to the extent to which the Agents are
authorized to act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
Section 7 EXPENSES; INDEMNIFICATION. The Company shall
reimburse (i) each Agent for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for such Agent, which attorneys may be employees of such Agent) paid or incurred
by such Agent in connection with the negotiation, documentation, preparation,
review, execution, delivery, amendment, modification and administration of this
Agreement and the other Loan Documents (including without limitation, reasonable
costs and out-of- pocket expenses incurred in connection with post-closing UCC
searches and the analysis thereof) or any other documents reasonably required to
be reviewed or prepared in connection herewith or therewith and all
out-of-pocket expenses incurred by such Agent in connection with the taking and
perfection of Liens on the Collateral (including, without limitation, title and
lien searches, surveys, title commitment and insurance costs, filing fees and
documentary, stamp, filing and similar taxes and corporate search fees), (ii)
each Agent and each of the Lenders for any reasonable costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for each Agent and the Lenders, which attorneys may be employees of
any Agent or any Lender) paid or incurred by any Agent or any Lender in
connection with the collection and enforcement or amendment or modification of
the Transaction Documents or any restructuring in respect of the Obligations and
(iii) any Agent or any Lender for any cost and expense of obtaining any
appraisals in respect of the assets of the Company or any of its Subsidiaries,
to the extent any Lender determines that such appraisals are required by any law
or any governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and any rules promulgated to implement
such provisions. The Company further agrees to indemnify each Agent and each
Lender, and their respective directors, offi-
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cers, attorneys, agents, and employees, for, and hold each of them harmless
against, all losses, claims (including, without limitation, all Environmental
Claims), damages, penalties, judgments, liabilities, actions, proceedings, costs
and expenses (including, without limitation, all attorney's fees and legal
expenses incurred by any of them and other expenses of litigation or preparation
therefor whether or not any suit or proceeding is brought or, if so, whether or
not any Agent or any Lender is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Transaction
Documents, the transactions contemplated hereby or thereby or any act, event or
omission related hereto or thereto or the direct or indirect application or
proposed application of any Letter of Credit or the proceeds of any Loan
hereunder; PROVIDED, HOWEVER, that no such Agent, Lender, director, officer,
attorney, agent or employee shall have a right to be indemnified or held
harmless hereunder for its own gross negligence or willful misconduct as finally
determined in a judgment of a court of competent jurisdiction. The obligations
of the Company under this Section shall survive the repayment of the Obligations
and the termination of this Agreement.
Section 8 NUMBERS OF DOCUMENTS. All statements, notices,
closing documents, and requests hereunder shall be furnished to the
Administrative Agent with sufficient counterparts so that the Administrative
Agent may furnish one to each of the Lenders.
Section 9 ACCOUNTING. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Company and all of its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Parent's
audited financial statements. In the event that Generally Accepted Accounting
Principles change after the Closing Date in any manner that would cause the
result of the calculation of any financial ratio under Agreement Accounting
Principles pursuant to Section 6.3 to be materially different than the result
that would have been obtained had Generally Accepted Accounting Principles been
applied in such calculation, the Company, the Agents and the Lenders hereby
agree to negotiate in good faith to amend this Agreement to accommodate the
Company's desire not to maintain two sets of financial records.
Section 10 SEVERABILITY OF PROVISIONS. Any provision in any
Loan Document that is held to be inoperative, unenforceable or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
Section 11 NON-LIABILITY OF LENDER. The relationship between
the Company and the Lenders and the Agents shall be solely that of borrower and
lender. Neither any Agent nor any Lender shall have any fiduciary
responsibilities to the Company. Neither any Agent nor any Lender undertakes
any responsibility to the Company to review or inform the Company of any matter
in connection with any phase of the Company's business or operations.
Section 12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Section 13 CONSENT TO JURISDICTION. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE COMPANY
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
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INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION. THE COMPANY WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND,
AS ADDITIONAL SECURITY FOR THE OBLIGATIONS, IRREVOCABLY APPOINTS CT CORPORATION
SYSTEM, WHOSE ADDRESS IS 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS AGENT
FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY COURT.
Section 14 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be effective when it has been
executed by the Company, the Agents and the Lenders and the Company, each Agent
and each Lender have delivered to the Administrative Agent executed counterpart
signature pages hereto or a facsimile of such executed counterpart signature
page.
Section 15 LIMITATION OF RIGHTS. Notwithstanding any other
provision of this Agreement, any foreclosure on, sale, transfer or other
disposition of, or the exercise of any right to vote or consent with respect to,
any of the collateral purported to be covered by any Collateral Document as
provided herein or in any Collateral Document or any other action taken or
proposed to be taken by any Agent or any Lender hereunder or thereunder which
would affect the operational, voting, or other control of the Parent, the
Company or any of its Subsidiaries, shall be pursuant to Section 310 of the
Communications Act and to the applicable rules and regulations thereunder and,
if and to the extent required thereby, subject to the prior consent of the FCC.
Section 16 LIMITATION OF LIABILITY. No claim may be made by the
Parent, the Company, any of its Subsidiaries or any other Person against any
Agent or any Lender or the Affiliates, directors, officers, employees, attorneys
or agent of any of them for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or any other Transactions, or any act, omission or event occurring in
connection therewith; and the Company (for itself and each of its Subsidiaries)
hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor and the Company (for itself, the Parent, and each of its
Subsidiaries) agrees to notify each Agent and each Lender, as applicable, of any
such claim promptly upon learning of any such claim.
ARTICLE X
THE AGENTS
Section 1 APPOINTMENT. Chemical Bank is hereby appointed as
Administrative Agent hereunder and under the other Loan Documents, and each of
the Lenders and each of the other Agents authorizes the Administrative Agent to
act as the agent of such Lender and such Agents. Banque Paribas is hereby
appointed as Documentation Agent hereunder and under the other Loan Documents,
and each of the Lenders and each of the other Agents authorizes the
Documentation Agent to act as the documentation agent of such Lender and such
Agents. Bank of America is hereby appointed as Syndication Agent hereunder and
under the other Loan Documents, and each of the Lenders and each of the other
Agents authorizes the Syndication Agent to act as the syndication agent of such
Lender and such Agents. Each Agent agrees to act as such upon the express
conditions contained in this Article X and the other Loan Documents. Each of
the Lenders authorizes the Administrative Agent to execute each of the
Collateral Documents and the financing statements and other documents and
instruments related thereto on behalf of such Lender (the terms of which shall
be binding on such Lender). No Agent shall have a fiduciary relationship in
respect of any Lender by reason of this Agreement or any other Loan Document.
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Section 2 POWERS. Each Agent shall have and may exercise such
powers hereunder and under the other Loan Documents as are specifically
delegated to such Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. No Agent shall have any implied
duties to the Lenders, or any obligation to the Lenders to take any action
hereunder or under any other Loan Document except any action specifically
provided by this Agreement or such other Loan Document to be taken by such
Agent.
Section 3 GENERAL IMMUNITY. Neither any Agent nor any of their
respective directors, officers, agents, attorneys or employees shall be liable
to the Lenders or any Lender for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct as
finally determined in a judgment of a court of competent jurisdiction.
Section 4 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. No Agent
shall be responsible to the Lenders for any recitals, reports, statements,
warranties or representations herein or in any other Loan Document or be bound
to ascertain or inquire as to the performance or observance of any of the terms
of this Agreement or any other Loan Document.
Section 5 ACTION ON INSTRUCTIONS OF LENDERS. Each Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and under the other Loan Documents in accordance with written
instructions signed by the Required Lenders, or, if applicable, the Lenders
required pursuant to Article VIII hereof, and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all holders of the Notes.
Section 6 EMPLOYMENT OF AGENTS AND COUNSEL. Each Agent may
execute any of its duties as the applicable Agent hereunder or under the other
Loan Documents by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders for the default or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable care. Each Agent
shall be entitled to advice of counsel concerning all matters pertaining to the
agency created hereby and by the other Loan Documents and its duties hereunder
and thereunder.
Section 7 RELIANCE ON DOCUMENTS; COUNSEL. Each Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and, in respect
of legal matters, upon the advice or opinion of counsel selected by such Agent
which counsel may be employees of such Agent.
Section 8 AGENT'S REIMBURSEMENT AND INDEMNIFICATION. Each
Lender agrees to reimburse and indemnify each Agent for its Pro Rata Share (i)
of any amounts not reimbursed by the Company or any of its Subsidiaries for
which such Agent is entitled to reimbursement by the Company or any of its
Subsidiaries under the Loan Documents, (ii) of any other expenses incurred by
such Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents and
(iii) of any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of this Agreement, any other Loan Document
or any other document delivered in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby or thereby by the
enforcement of any of the terms hereof or of any other Loan Document or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of any Agent as finally determined in a final judgment of a court of
competent jurisdiction.
Section 9 RIGHTS AS A LENDER. With respect to the Loans made by
it and the other Obligations owing to it, each Agent shall have the same
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rights and powers hereunder as any Lender and may exercise the same as though it
were not such Agent and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include each Agent in its individual capacity. Each Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking or trust business with, the Parent, the Company or any of its
Subsidiaries as if it were not an Agent.
Section 10 LENDER DECISIONS. Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and
based on the financial statements prepared by the Company and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Loan
Documents.
Section 11 SUCCESSOR AGENT. Any Agent may resign at any time by
giving ten (10) days' prior written notice thereof to the Lenders and the
Company, effective upon the expiration of such ten (10) days, and any Agent may
be removed at any time with or without cause by written notice received by such
Agent from the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint on behalf of the Lenders a
successor Agent which successor Agent shall, absent the occurrence and
continuance of a Default or Unmatured Default, be consented to by the Company
(which consent shall not be unreasonably withheld). If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within ten (10) days after the retiring Agent's giving notice of
resignation, then the retiring Agent may appoint on behalf of the Lenders a
successor Agent which successor Agent shall, absent the occurrence and
continuance of a Default or Unmatured Default, be acceptable to the Company.
Such successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from any
further duties and obligations hereunder and under the other Loan Documents.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article X shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents.
Section 12 COLLATERAL RELEASES. Provided that no Default or
Unmatured Default shall exist, the Company and its Subsidiaries may from time to
time sell or otherwise dispose of certain of the Collateral as permitted by the
terms of Section 6.13 (subject to compliance by the Company and its Subsidiaries
with Section 2.8) and, upon the written request of the Company, the
Administrative Agent shall at the Company's expense release the security
interest of the Administrative Agent in the Collateral which is to be sold or
otherwise disposed of by the Company or any such Subsidiary in accordance with
the terms of Section 6.13. The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to the Company or any of its
Subsidiaries any such agreements, documents or instruments as shall be necessary
or appropriate to effect any such release and any other releases of Collateral
which shall have been approved by the Lenders in writing, in accordance with
Section 8.2.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
Section 1 SETOFF. In addition to, and without limitation of,
any rights of the Lenders under applicable law, if the Company becomes
insolvent, however evidenced, or any Default shall occur and be continuing, any
indebt-
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edness from any Lender to the Company (including all account balances, whether
provisional or final and whether or not collected or available) may be offset
and applied toward the payment of the Obligations owing to such Lender, whether
or not the Obligations, or any part thereof, shall then be due.
Section 2 RATABLE PAYMENTS. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a participation in the Loans held by the other Lenders so that after
such purchase each Lender will hold its ratable proportion of Loans. If any
Lender, whether in connection with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its Obligations
or such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action as shall be necessary such that all Lenders
share in the benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 1 SUCCESSORS AND ASSIGNS. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of the Company
and the Lenders and their respective successors and assigns, except that the
Parent, the Company and its Subsidiaries shall not have the right to assign its
rights or delegate its duties or obligations under the Loan Documents, and any
assignment by any Lender must be made in compliance with Section 12.3. The
Administrative Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, and any
assignee or transferee of a Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
Section 2 PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in
the ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan made by such Lender or any other interest of
such Lender under the Loan Documents, provided that any such Participant shall
agree in writing to be bound by Sections 12.4 and 12.5. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, and the Company and the Agents shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents, provided that such Lender shall
provide notice to the Company of such sale to a Participant which is not an
Affiliate of such selling Lender, a Lender or an Affiliate thereof following any
such sale and such Lender shall comply with Sections 12.4 and 12.5 with respect
to confidential information.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan or Obligation in
which such Participant has an interest which postpones any date fixed for any
regularly- scheduled payment of principal (including a Revolving Loan Commitment
Reduction Date) or postpones the final maturity of any of the Loans,
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forgives principal or interest or reduces the interest rate payable with respect
to any such Loan or Obligation, releases any guarantor of any such Loan or
Obligation or releases all or substantially all of the Collateral securing any
such Loan or Obligation.
12.2.3. BENEFIT OF SETOFF AND INDEMNITIES. The Company
agrees that each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right of setoff provided
in Section 11.1 with respect to the amount of participating interests sold to
each Participant, except to the extent such Participant has exercised its right
of setoff. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1, agrees
to share with each Lender, any amount received pursuant to the exercise of its
right of setoff, in accordance with Section 11.2 as if each Participant were a
Lender. The Company also agrees that each Participant shall be entitled to the
benefits of Sections 3.1 and 3.2 with respect to its participation; provided,
that no Participant shall be entitled to receive any greater amount pursuant to
such Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
Section 3 ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time, assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents; PROVIDED that any
partial assignment of any Lender's rights and obligation hereunder shall be
either for all of such Lender's rights and obligations under the Loan Documents
or shall be in a minimum principal amount of $5,000,000 of such Lender's Loans
and/or Commitments and such Lender shall comply with Sections 12.4 and 12.5 with
respect to confidential information. Such assignment (other than an assignment
to the Federal Reserve Bank) shall be substantially in the form of Exhibit M
hereto. The consent of the Administrative Agent and, unless a Default has
occurred and is continuing, the consent of the Company (such consent of the
Administrative Agent and the Company not to be unreasonably withheld), shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender, an Affiliate thereof or a Federal Reserve Bank. Such
consents shall be substantially in the form attached as Schedule I to Exhibit M
(a "Notice of Assignment") hereto and shall not be unreasonably withheld or
delayed.
12.3.2. EFFECT; EFFECTIVE DATE. After delivery to the
Administrative Agent of a Notice of Assignment with a copy to the Company,
together with any consents required by Section 12.3.1, and payment of a $3,500
fee to the Administrative Agent for processing such assignment, such assignment
shall become effective on the effective date specified in such Notice of
Assignment. On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and the other Loan
Documents and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party hereto, and
no further consent or action by the Company, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect to the
percentage of the Obligations assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Administrative Agent and the Company shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Loans, as adjusted pursuant
to such assignment.
12.3.3. TAX TREATMENT. If any interest in any Loan
Document is transferred to any Transferee (other than a then-existing Lender)
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<PAGE>
which is organized under the laws of any jurisdiction other than the United
States or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to represent to the
transferor Lender (for the benefit of the transferor Lender, the Agents and the
Company) that under applicable law and treaties no taxes will be required to be
withheld by the Administrative Agent, the Company or the transferor Lender with
respect to any payments to be made to such Transferee in respect of the Loans,
(ii) to furnish to the transferor Lender, the Administrative Agent and the
Company either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and an Internal Revenue Service Form W-8 or W-9 or successor appropriate forms
(wherein such Transferee claims exemption from United States back-up withholding
tax) and (iii) to agree (for the benefit of the transferor Lender, the
Administrative Agent and the Company) to provide the transferor Lender, the
Administrative Agent and the Company a new Form 4224 or Form 1001 or Form W-8 or
W-9 upon the obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding and back-up withholding tax exemptions.
Section 4 DISSEMINATION OF INFORMATION. The Company authorizes
each Lender to disclose to any Participant, Purchaser, Interest Rate Hedge
Provider, institution party to an agreement in respect of the transfer of
economic risk of any Lender's obligations to the Company through the use of
credit swaps or other such instruments or any other Person acquiring an interest
in the Obligations, any portion thereof or the Loan Documents by operation of
law (each "Transferee"), and any prospective Transferee, any and all information
in such Lender's possession concerning the creditworthiness of the Parent or the
Company; PROVIDED that each Transferee and prospective Transferee agrees to be
bound by Section 12.5; and PROVIDED FURTHER, that each Lender agrees to provide
to the Company notice of the identity of such Transferee or prospective
Transferee (other than a Transferee which is an Affiliate of a selling Lender, a
Lender or an Affiliate of a Lender) at least four days prior to the delivery of
an agreement with respect to confidentiality required by Section 12.5 to any
Transferee or prospective Transferee.
Section 5 CONFIDENTIALITY. Each Lender agrees to hold any
information designated as confidential which it may receive from the Company
pursuant to this Agreement in confidence, except for disclosure: (i) to other
Lenders, (ii) to legal counsel, accountants, and other professional advisors to
such Lender, (iii) to regulatory officials, (iv) as required by law, regulation,
legal process, or in connection with any legal proceeding, (v) information which
has previously been made public and (vi) in connection with an actual or
proposed sale, assignment, participation or other disposition or proposed
disposition of such Lender's interests hereunder not prohibited by this
Agreement (including, without limitation, a transfer of economic risk of any
Lender's obligations to the Company through the use of credit swaps or other
such instruments) provided that the assignee, proposed assignee, participant,
proposed participant or other Transferee or proposed Transferee shall have
agreed in a writing delivered by such Lender to the Company to be bound by this
Section 12.5.
ARTICLE XIII
NOTICES
Section 1 GIVING NOTICE. Any notice required or permitted to be
given under this Agreement may be, and shall be deemed, given, if mailed, three
days after the date when deposited in the United States mail, postage prepaid,
or if by telegraph, when delivered to the appropriate office for transmission,
charges prepaid, or if by personal delivery or by facsimile, when received,
addressed to the Company (with copies to Sheli Z. Rosenberg,
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<PAGE>
Rosenberg & Liebentritt, 2 North Riverside Plaza, Suite 600, Chicago, Illinois
60606, provided, however, that the failure to provide any such copies shall not
affect the validity or sufficiency of any such notice), the Lenders or the
Agents at the addresses indicated below their signatures to this Agreement
(with, in the case of any notice to the Administrative Agent, a copy thereof to
Agent Bank Services Group, 29th floor, 140 East 45th Street, New York, New York
10017, Attention: Jesus Sang (fax: 212-622-0002)).
Section 2 CHANGE OF ADDRESS. The Company, any Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
WAIVER OF JURY TRIAL
THE COMPANY, EACH AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
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IN WITNESS WHEREOF, the Company, the Lenders and the Agents have
executed this Agreement as of the date first above written.
JCAC, INC., A FLORIDA CORPORATION
By: /s/ R.Christopher Weber
-------------------------------------
Title: Senior Vice President
-----------------------------
By: /s/ John M. Berry
-------------------------------------
Title: Senior Vice President
-----------------------------
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-6087
Attention: R. Christopher Weber
CHEMICAL BANK,
Individually and as Administrative
Agent
By: /s/ C.C. Wardell
-------------------------------------
Title: Managing Director
-----------------------------
By: /s/ C.C. Wardell
-------------------------------------
Title: Managing Director
-----------------------------
Chemical Bank
Administrative Agent
270 Park Avenue
New York, New York 10017
BANQUE PARIBAS,
Individually and as Documentation Agent
By: /s/ SM Heinen
-------------------------------------
Title: Vice President
-----------------------------
By: /s/ Gerald E. O'Keefe
-------------------------------------
Title: Vice President
-----------------------------
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Facsimile: (312) 853-6020
Attention: Steve Heinen
Mark Radzik
Banque Paribas, Media Group
Equitable Tower
787 7th Avenue
32nd Floor
New York, New York 10019
Facsimile: (212) 841-2369
Attention: Eileen Burke
Salo Aizenberg
<PAGE>
BANK OF AMERICA ILLINOIS,
Individually and as Syndication Agent
By: /s/ Kevin P. Morrison
-------------------------------------
Title: Vice President
-----------------------------
231 South LaSalle Street
14th Floor
Chicago, Illinois 60697
Facsimile: (312) 974-8014
Attention: Mary Rose Gage
ABN AMRO BANK N.V.
By: /s/ James J. Johnston
-------------------------------------
Title: Vice President
-----------------------------
By: /s/ Mary L. Janovksky
-------------------------------------
Title: Vice President
-----------------------------
135 South LaSalle Street, Suite 425
Chicago, Illinois 60674-9135
Facsimile: (312) 606-8425
Attention: Joanna Riopelle and
James Johnston
THE BANK OF NEW YORK
By: /s/ Brenda Nedzi
-------------------------------------
Title: Vice President
-----------------------------
One Wall Street, 16th Floor
New York, New York 10286
Facsimile: (212) 635-8593
Attention: Brendan Nedzi
THE BANK OF NOVA SCOTIA
By: /s/ Margo C. Bright
-------------------------------------
Title:
-----------------------------
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-5091
Attention: Margot C. Bright
<PAGE>
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ Dean Balice
-------------------------------------
Title: Senior Vice President
-----------------------------
55 East Monroe Street
Chicago, Illinois 60603-5702
Facsimile: (312) 372-2830
Attention: Leslie McMillan
C.I.B.C., INC.
By: /s/ P.C. Smith
-------------------------------------
Title: Authorized Signor
-----------------------------
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 856-3558
Attention: Peter Smith
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Stephen C. Levi
-------------------------------------
Title: Vice President
-----------------------------
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 261-3318
Attention: Stephen Levi
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ William E. Lambert
-------------------------------------
Title: Assistant Vice President
-----------------------------
By: /s/ Jane A Majeski
-------------------------------------
Title: Vice President
-----------------------------
75 Wall Street, 29th Floor
New York, New York 10005-2889
Facsimile: (212) 429-2129
Attention: Jane Majeski
<PAGE>
FIRST BANK NATIONAL ASSOCIATION
By: /s/ John E. Besse
-------------------------------------
Title: Senior Vice President
-----------------------------
First Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402
Facsimile: (612) 973-0824
Attention: Robert Miller, MPFP0905
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Robert Milordi
-------------------------------------
Title: Managing Director
-----------------------------
100 Federal Street
Boston, Massachusetts 02110
Facsimile: (617) 434-3401
Attention: Rob Milordi
ING CAPITAL ADVISORS, INC.
By: /s/ Michael P. McAdams
-------------------------------------
Title: Managing Director
-----------------------------
333 South Grand Avenue, Suite 400
Los Angeles, California 90071
Facsimile: (213) 626-6552
Attention: Mike Hatley
MELLON BANK, N.A.
By: /s/ Lisa Pellow
-------------------------------------
Title: First Vice President
-----------------------------
One Mellon Bank Center, Room 4440
Pittsburgh, Pennsylvania 15258
Facsimile: (412) 234-6375
Attention: Lisa Pellow
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: /s/ Anthony R. Clemente
-------------------------------------
Title: Authorized Signor
-----------------------------
800 Scudders Mills Road
Plainsboro, New Jersey 08536
Facsimile: (609) 282-2756
Attention: Anthony R. Clemente
<PAGE>
MORGAN GUARANTY TRUST COMPANY
By: /s/ Sandra Kurek
-------------------------------------
Title: Associate
-----------------------------
60 Wall Street, 22nd Floor
New York, New York 10260-0060
Facsimile: (212) 648-5018
Attention: Sandra Kurek
NATIONSBANK OF TEXAS, N.A.
By: /s/ Greg Meador
-------------------------------------
Title: Vice President
-----------------------------
901 Main Street, 64th Floor
Dallas, Texas 75202
Facsimile: (214) 508-9390
Attention: Greg Meador
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Howard Tiffen
-------------------------------------
Title: Vice President
-----------------------------
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4424
Facsimile: (602) 417-8327
Attention: Howard Tiffen
PRIME INCOME TRUST
By: /s/ Rafael Scolari
-------------------------------------
Title:
-----------------------------
Dean Witter Intercapital
c/o Prime Income Trust
Two World Trade Center
New York, New York 10048
Facsimile: (212) 392-5345
Attention: Rafael Scolari
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ Mark Okada
-------------------------------------
Title: Principal
-----------------------------
13455 Noel Road
2 Galleria Tower, Suite 1150
Dallas, Texas 75240
Facsimile: (214) 233-4343
Attention: Mark Okada
<PAGE>
SOCIETY NATIONAL BANK
By: /s/ Michael Stark
-------------------------------------
Title: Assistant Vice President
-----------------------------
127 Public Square, OH-01-27-0602
Cleveland, Ohio 44114-1306
Facsimile: (216) 689-4666
Attention: Michael Stark
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Kevin Sampson
-------------------------------------
Title: Assistant Vice President
-----------------------------
445 South Figueroa Street, 7th Floor
Los Angeles, California 90071
Facsimile: (213) 236-5747
Attention: Kevin Sampson
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ Jeffrey W. Maillet
-------------------------------------
Title: Senior Vice President
-----------------------------
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Facsimile: (708) 684-6741
Attention: Jeffrey Maillet
<PAGE>
The undersigned, as successor by merger to JCAC, Inc., hereby
assumes and agrees to perform as the "Company" each and every of the covenants,
duties, obligations, promises and liabilities of the Company in the foregoing
Agreement and each other Loan Document and hereby confirms and restates each and
every of the representations and warranties of the Company therein.
CITICASTERS INC.
By:
-------------------------------------
Title:
----------------------------------
<PAGE>
EXHIBIT E-1
COMPANY SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement") is executed as of
June 12, 1996 by and between JCAC, Inc. (the "Company") and Chemical Bank, as
administrative agent (the "Administrative Agent") for the Agents, the Lenders
and any Interest Rate Hedge Providers (each as defined in the Credit Agreement
referred to hereafter).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is entering into that certain Credit Agreement
dated as of the date hereof with the Lenders and the Agents (as modified,
supplemented, amended, extended, supplanted or restated from time to time, the
"Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Hedge Providers;
WHEREAS, the execution and delivery of this Security Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
NOW, THEREFORE, in order to induce the Agents and the Lenders to enter
into the Credit Agreement and to induce any Interest Rate Hedge Providers to
enter into Rate Hedging Agreements and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS.
As used in this Security Agreement:
"Accounts" means "accounts" as defined in Section 9-106 of the UCC.
<PAGE>
"Chattel Paper" means "chattel paper" as defined in Section 9-105 of
the UCC.
"Collateral" means all tangible and intangible property, wherever
located, whether now owned or hereafter existing, in which the Company now has
or hereafter acquires any right or interest, and the Proceeds (including
insurance proceeds), products, substitutions and replacements thereof and
additions and accessions thereto and all cash and cash equivalents, bank
accounts, special collateral accounts, and all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, including, without limitation, the
following property: all Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment, Fixtures, General Intangibles, Instruments, Inventory, Investment
Property, Stock Rights and Proceeds, products, additions and accessions thereto
or thereof; PROVIDED, HOWEVER, that Collateral shall not include (i) licenses
and permits issued by the FCC to the extent it is unlawful to grant a security
interest in any such license or permit or to the extent that the grant of any
such security interest in any such license or permit would result in the
forfeiture of any such license or permit or a default under any such license or
permit, (ii) assets and stock of newly formed subsidiaries of the Company, to
the extent that the Administrative Agent is not to receive a security interest
therein, as provided in clause (i) of the lead in paragraph of Section 6.15 of
the Credit Agreement, (iii) collateral pledged to the Administrative Agent
pursuant to the Company Pledge Agreement and (iv) the funds and segregated
account at Society National Bank of Cleveland described in Section 6.15(h) of
the Credit Agreement.
"Deposit Accounts" means "deposit accounts" as defined in Section
9-105 of the UCC.
"Documents" means "documents" as defined in Section 9-105 of the UCC.
"Equipment" means "equipment" as defined in Section 9-109(2) of the
UCC.
"Fixtures" means "fixtures" as defined in Section 9-313 of the UCC.
2
<PAGE>
"General Intangibles" means "general intangibles" as defined in
Section 9-106 of the UCC, including, without limitation, all contract rights,
rights to receive payments of money, choses in action, judgments, tax refunds
and tax refund claims, patents, trademarks, trade names, copyrights, licenses
(including, without limitation, those issued by the FCC except to the extent
that it is unlawful to grant a security interest in any such license or that the
grant of any such security interest therein would result in a default under any
such license), franchises, leasehold interests in real or personal property,
rights to receive rentals of real or personal property, and guarantee claims.
"Instruments" means "instruments" as defined in Section 9-105 of the
UCC, including, without limitation, all checks, drafts, notes, bonds,
debentures, government securities, certificates of deposit, letters of credit,
preferred and common stocks, options and warrants.
"Inventory" means "inventory" as defined in Section 9-109 of the UCC,
including, without limitation, all inventory, raw materials, work in process,
finished goods, returned or repossessed goods, goods held for sale or lease or
furnished or to be furnished under contracts of service and goods released to
the Company or to third parties under trust receipts or similar documents.
"Investment Property" means "investment property" as defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
Illinois.
"Proceeds" means "proceeds" as defined in Section 9-306 of the UCC.
"Receivables" means the Accounts, Chattel Paper, Documents, General
Intangibles and Instruments.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Security Agreement" means this Security Agreement, as it may be
amended or modified and in effect from time to time.
3
<PAGE>
"Stock Rights" means any stock, any dividend or other distribution and
any other right or property which the Company shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any shares of stock constituting Collateral and any
stock, any right to receive stock and any right to receive earnings, in which
the Company now has or hereafter acquires any right.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Capitalized terms used herein
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.
2. GRANT OF SECURITY INTEREST.
In order to secure the full and complete payment and performance by
the Company of the Obligations when due, the Company hereby pledges and grants
to the Administrative Agent for the benefit of the Agents, the Lenders and any
Interest Rate Hedge Providers, equally and ratably in proportion to the total
Obligations owing at any time to the Agents, the Lenders and any Interest Rate
Hedge Providers, a continuing lien and security interest in the Collateral.
3. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to each Agent, each Lender and
each Interest Rate Hedge Provider that:
3.1 EXISTENCE AND STANDING. The Company is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
3.2 AUTHORIZATION, VALIDITY AND ENFORCEABILITY. The execution and
delivery by the Company of this Security Agreement has been duly authorized by
proper corporate proceedings, and this Security Agreement constitutes a legal,
valid and binding obligation of the
4
<PAGE>
Company and creates a security interest which is enforceable against the Company
in accordance with its terms in respect of all now owned and hereafter acquired
Collateral, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
3.3 CONFLICTING LAWS AND CONTRACTS. Except as provided in Section
5.3 of the Credit Agreement, neither the execution and delivery by the Company
of this Security Agreement, nor the creation and perfection of the security
interest in the Collateral granted hereunder, nor compliance with the provisions
hereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Company or the Company's certificate
of incorporation or by-laws or the provisions of any indenture, instrument or
agreement to which the Company is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the property of
the Company pursuant to the terms of any such indenture, instrument or
agreement, except any violation, default or Lien which would not have a material
adverse effect on the business, financial condition or operations of the
Company. No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, the execution, delivery and performance of,
or the legality, validity, binding effect or enforceability of, this Security
Agreement or the grant of the security interest in the Collateral pursuant
hereto, other than the filing, within the period established by applicable law,
of this Security Agreement with the FCC and as otherwise provided in Section 5.3
of the Credit Agreement.
3.4 PRINCIPAL LOCATION. The Company's mailing address and the
location of its chief executive office and the books and records relating to the
Receivables are disclosed in Exhibit "A" hereto; the Company has no other places
of business except those set forth in Exhibit "A" hereto.
5
<PAGE>
3.5 PROPERTY LOCATIONS. The Inventory and Equipment and Fixtures are
located solely at the locations described in Exhibit "A" hereto and have not,
within the four months preceding the date of this Security Agreement, been
located at any other locations. None of said locations are leased by the
Company as lessee except those designated in Part B of Exhibit "A" hereto.
3.6 NO OTHER NAMES. The Company has not conducted business under any
name except JCAC, Inc. and the name in which it has executed this Security
Agreement. As of the Closing Date, the Company will not have conducted business
under any name except JCAC, Inc. and Citicasters Inc.
3.7 NO DEFAULT. No Default or Unmatured Default exists as of the
date hereof.
3.8 RECEIVABLES. The names of the obligors, amounts owing, due dates
and other information with respect to the Receivables are and will be correctly
stated in all material respects in all records of the Company relating thereto
and in all invoices and reports with respect thereto furnished to the
Administrative Agent by the Company from time to time upon a request therefor.
3.9 FILING REQUIREMENTS. None of the Equipment (other than vehicles)
is covered by any certificate of title. No security interests or liens have
been filed in respect of any of the Collateral under any federal statute (other
than filings with the United States Patent and Trademark Office with respect to
federally registered patents and trademarks). The legal description and street
address of those properties designated by the Administrative Agent on which any
Fixtures are located are set forth in Exhibit "B" hereto together with the name
and address of the record owner of each such property. Upon (a) filing
financing statements naming the Company as "debtor" and the Administrative Agent
as "secured party" and describing the Collateral in the filing offices set forth
on Exhibit "E" hereto and (b) the Instruments listed on Exhibit "D" which
constitute Collateral having been delivered to the Administrative Agent, the
security interests in the Collateral (other than (i) motor vehicles, (ii)
Deposit Accounts, (iii) federally registered patents and trademarks to the
extent
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a filing with the United States Patent and Trademark Office is required to
perfect a security interest therein and (iv) fixtures on real property owned or
leased by the Company or any Subsidiary which is not subject to a Mortgage
granted to the Administrative Agent hereunder) will constitute perfected
security interests therein superior and prior to all Liens (other than Liens
permitted by Section 6.17 of the Credit Agreement).
3.10 NO FINANCING STATEMENTS. No financing statement describing all
or any portion of the Collateral which has not lapsed or been terminated naming
the Company as debtor has been filed in any jurisdiction except financing
statements (a) naming the Administrative Agent as secured party, (b) covering
Liens permitted by Section 6.17 of the Credit Agreement and (c) as described in
Exhibit "C" hereto.
3.11 PLEDGED SECURITIES. Exhibit "D" hereto sets forth a complete and
accurate list of the Instruments if any, delivered to the Administrative Agent
for the benefit of the Agents, the Lenders and any Interest Rate Hedge
Providers. The Company is the direct and beneficial owner of each share of
stock, if any, listed on Exhibit "D" annexed hereto as being owned by it. The
Company further represents and warrants that all of such shares of stock have
been duly and validly issued, are fully paid and non-assessable and are owned by
the Company free and clear of any Liens, except for the security interest
granted to the Administrative Agent hereunder and Liens permitted by Section
6.17 of the Credit Agreement.
3.12 NO LIENS. Except for the Lien granted to the Administrative
Agent for the benefit of the Agents and the Lenders hereunder, the Company owns
and, as to all Collateral whether now existing or hereafter acquired will
continue to own, each item of the Collateral free and clear of any and all
Liens, rights or claims of all other Persons other than as permitted by Section
6.17 of the Credit Agreement, and the Company shall defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Administrative Agent or any Lender.
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4. COVENANTS.
From the date of this Security Agreement and thereafter until this
Security Agreement is terminated:
4.1 GENERAL.
4.1.1 INSPECTION. The Company will permit any Agent or any
Lender, by its or their representatives and agents, to inspect the Collateral
without materially interfering with the Company's normal operations, to examine
and (except in the case of confidential information relating to the Company's
relationship with third parties) make copies of the records of the Company
relating thereto, and to discuss the Collateral and the records of the Company
with respect thereto with, and to be advised as to the same by, the Company's
officers and employees and, after the occurrence and during the continuance of
any Default or Unmatured Default, with any person or entity which is or may be
obligated on any Receivable, all at such reasonable times and intervals as any
Agent or any Lender may determine, all at the Company's expense.
4.1.2 TAXES. The Company will pay, before they become
delinquent, all taxes, assessments and governmental charges and levies upon the
Collateral, except those which are being contested in good faith by appropriate
proceedings and with respect to which no Lien exists other than Liens permitted
by Section 6.17 of the Credit Agreement.
4.1.3 RECORDS AND REPORTS. The Company will maintain
complete and accurate books and records with respect to the Collateral, and
furnish to the Administrative Agent, with sufficient copies for each of the
Agents, the Lenders and any Interest Rate Hedge Providers, such reports relating
to the Collateral as the Administrative Agent shall from time to time reasonably
request.
4.1.4 NOTICE OF DEFAULT. The Company will give prompt notice
in writing to the Agents, the Lenders and any Interest Rate Hedge Providers of
the occurrence of any Default or Unmatured Default and of any other development
(other than the issuance or adoption of any new federal, state or local statute,
regulation or
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ordinance or any other development affecting the broadcasting industry
generally), financial or otherwise, which is reasonably likely to materially
adversely affect a substantial portion of the Collateral or the ability of the
Company to pay the Obligations.
4.1.5 FINANCING STATEMENTS AND OTHER ACTIONS. The Company
will execute and deliver to the Administrative Agent all financing statements
and other documents (and, if so requested by any Agent or any Lender, use its
best efforts to obtain landlord waivers) and take such further actions from time
to time reasonably requested by any Agent or any Lender in order to establish
and maintain a first perfected security interest in the Collateral or to
otherwise obtain the full benefits of this Security Agreement. In addition,
without limiting the generality of the foregoing, the Company will:
(a) mark conspicuously each and every writing which individually
or which when taken with one or more other writings constitutes Chattel Paper
included in the Collateral with a legend, in form and substance satisfactory to
the Administrative Agent, indicating the interest of the Administrative Agent
therein;
(b) after the occurrence and during the continuance of a
Default, mark conspicuously each document included in the Receivables and, at
the request of the Administrative Agent, each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory to the
Administrative Agent, indicating that such document or Collateral is subject to
the security interest granted hereby; and
(c) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as the Administrative Agent may request, in order to
perfect and preserve the security interest and other rights granted or purported
to be granted to the Administrative Agent hereby.
4.1.6 DISPOSITION OF COLLATERAL. The Company will not sell,
lease or otherwise dispose of the Collateral, except as permitted by Section
6.13 of the Credit Agreement.
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4.1.7 LIENS. The Company will not create, incur, or suffer
to exist any Lien except the security interest created by this Security
Agreement and Liens permitted by Section 6.17 of the Credit Agreement. The
Company agrees to warrant and defend title to and ownership of the Collateral
and the lien created by this Security Agreement against the claims of all
Persons and maintain and preserve such lien at all times during the term of this
Security Agreement.
4.1.8 CHANGE IN LOCATION OR NAME. The Company will not (i)
have any Inventory, Equipment or Fixtures or proceeds or products thereof (other
than Collateral disposed of as permitted by Section 4.1.6) at a location other
than a location specified in Exhibit "A" hereto or any jurisdiction in the
United States in which a financing statement or similar evidence of a security
interest under applicable law has been filed against the Company, as debtor, by
the Administrative Agent, as secured party, (ii) maintain records relating to
the Receivables at a location other than at the location specified on Exhibit
"A", (iii) maintain a place of business at a location other than a location
specified on Exhibit "A" hereto, (iv) change its name, or (v) change its mailing
address, unless, in the case of each of clauses (i) through (v) above, the
Company shall have given the Administrative Agent not less than 30 days' prior
written notice thereof.
4.1.9 OTHER FINANCING STATEMENTS. The Company will not sign
or authorize the signing on its behalf of any financing statement naming it as
debtor covering all or any portion of the Collateral, except financing
statements (a) naming the Administrative Agent as secured party, (b) covering
Liens permitted by Section 6.17 of the Credit Agreement and (c) as described in
Exhibit "C" hereto.
4.2 RECEIVABLES.
4.2.1 CERTAIN AGREEMENTS ON RECEIVABLES. The Company will
not make or agree to make any discount, credit, rebate or other reduction in the
original amount owing on a Receivable or accept in satisfaction of a Receivable
less than the original amount thereof, except that, so long as no Default has
occurred and is continu
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ing, the Company may reduce the amount of Accounts in accordance with its
present policies and in the ordinary course of business.
4.2.2 COLLECTION OF RECEIVABLES. Except as otherwise
provided in this Security Agreement or the Credit Agreement, the Company will
collect and enforce, at the Company's sole expense, all amounts due or hereafter
due to the Company under the Receivables.
4.2.3 DELIVERY OF INVOICES. The Company will deliver to the
Administrative Agent immediately upon its request while a Default exists
duplicate invoices with respect to each Account bearing such language of
assignment as the Administrative Agent shall specify.
4.2.4 DISCLOSURE OF COUNTERCLAIM ON RECEIVABLES. If any
discount, credit or agreement to make a rebate or to otherwise reduce the amount
owing on a Receivable in excess of $50,000 exists or if, to the knowledge of the
Company, any dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened with respect to any such Receivable, the Company will
disclose such fact to the Administrative Agent in writing in connection with the
inspection by the Administrative Agent of any record of the Company relating to
such Receivable and in connection with any invoice or report furnished by the
Company to the Administrative Agent relating to such Receivable.
4.3 INVENTORY AND EQUIPMENT.
4.3.1 MAINTENANCE OF GOODS. The Company will do all things
necessary to maintain, preserve, protect and keep the Inventory and the
Equipment in good repair and working and saleable condition, except for obsolete
Equipment no longer used or useful in the Company's business.
4.3.2 INSURANCE. The Company will (i) maintain fire and
extended coverage insurance on the Inventory and Equipment containing a lender's
loss payable clause in favor of the Administrative Agent (or, upon request
therefor, designating the Administrative Agent as an additional insured) and
providing that said insurance will not be terminated except after at least 30
days' written notice from the insurance company to the
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Administrative Agent and that the Administrative Agent shall have the right but
not the obligation to pay any insurance premiums, (ii) maintain such other
insurance on the Inventory and the Equipment for the benefit of the Agents, the
Lenders and any Interest Rate Hedge Providers as is consistent with sound
practice in the broadcasting industry and (iii) furnish to the Administrative
Agent upon the request of the Administrative Agent from time to time the
originals of all policies of insurance on the Inventory and the Equipment and
certificates with respect to such insurance.
4.4 INSTRUMENTS; DELIVERY OF PLEDGED COLLATERAL. The Company will
(i) deliver to the Administrative Agent immediately upon the execution of this
Security Agreement, the originals of all Instruments included in the Collateral
(other than, so long as no Default has occurred and is continuing, proceeds of
Inventory and Receivables collected in the ordinary course of business),
endorsed in blank, marked with such legends and assigned as the Administrative
Agent shall specify, and (ii) hold in trust for the Agents, the Lenders and any
Interest Rate Hedge Providers upon receipt and immediately thereafter deliver to
the Administrative Agent any Instrument evidencing or constituting Collateral
(except, so long as no Default has occurred and is continuing, ordinary cash
dividends paid with respect to the Instruments which are stock and the Stock
Rights related thereto and proceeds of Inventory and Receivables collected in
the ordinary course of business).
4.5 UNCERTIFICATED SECURITIES. The Company will, upon request of the
Administrative Agent, from time to time, cause the appropriate issuers of
uncertificated securities constituting Instruments to mark their books and
records with the numbers and face amounts of all uncertificated securities
constituting Instruments and all rollovers and replacements therefor to reflect
the Lien of the Agents, the Lenders and any Interest Rate Hedge Providers
granted pursuant to this Security Agreement.
4.6 STOCK.
4.6.1 CHANGES IN CAPITAL STRUCTURE OF ISSUERS. Except as
otherwise permitted by Section 6.12 of the Credit Agreement, the Company will
not (i) permit
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or suffer any issuer of corporate securities constituting Collateral which
issuer is controlled by the Company to dissolve, liquidate, retire any of its
capital stock, reduce its capital or merge or consolidate with any other entity,
or (ii) vote any of the Instruments in favor of any of the foregoing.
4.6.2 STOCK RIGHTS. The Company will deliver to the
Administrative Agent, promptly upon receipt, all Stock Rights (other than, so
long as no Default has occurred and is continuing, ordinary cash dividends
received with respect to the Instruments which are stock) and agrees that such
Stock Rights shall be held in trust by the Company for the Agents, the Lenders
and any Interest Rate Hedge Providers until delivery thereof to the
Administrative Agent.
4.6.3 REGISTRATION OF INSTRUMENTS. The Company will permit
any registrable Collateral to be registered in the name of the Administrative
Agent or its nominee at any time a Default exists at the option of the Required
Lenders.
4.6.4 EXERCISE OF RIGHTS IN INSTRUMENTS. The Company will
permit the Administrative Agent or its nominee at any time a Default exists,
without notice but subject to compliance with applicable law and subject to
Section 8.18 hereof, to exercise all voting and corporate rights relating to the
Collateral, including, without limitation, exchange, subscription or any other
rights, privileges or options pertaining to any shares of the stock pledged as
Collateral and the Stock Rights as if it were the absolute owner thereof.
4.7 FEDERAL CLAIMS; NOTICE TO ADMINISTRATIVE AGENT. If at any time
from time to time the Administrative Agent directs the Company to begin doing
so, the Company will promptly notify the Administrative Agent of any Collateral
which constitutes a claim against the United States government or any
instrumentality or agency thereof, the assignment of which claim is restricted
by federal law.
4.8 INTERCOMPANY SECURITY AGREEMENT. So long as any Obligations
remain outstanding, the Company covenants and agrees with the Agents, the
Lenders and any Interest Rate Hedge Providers that the Company will not
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and will not permit the Subsidiaries to amend or terminate the Intercompany
Security Agreement (as defined in the Credit Agreement).
5. DEFAULT.
5.1 Default shall mean "Default" as defined in the Credit Agreement.
5.2 ACCELERATION AND REMEDIES. If any Default described in Sections
7.6 or 7.7 of the Credit Agreement shall occur and be continuing with respect to
the Company or the Parent, the Obligations shall immediately become due and
payable without any election or action on the part of any Agent, any Lender or
any Interest Rate Hedge Providers. If any other Default shall occur and be
continuing, the Required Lenders may direct the Administrative Agent to declare
the Obligations to be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Company hereby expressly waives.
In such event, the Administrative Agent on behalf of the Agents, the
Lenders and any Interest Rate Hedge Providers may, subject to Section 8.18:
5.2.1 OBLIGATIONS THAT MAY BE ACCELERATED. Exercise any or
all of the rights and remedies provided (i) in this Security Agreement, (ii) to
a secured party when a debtor is in default under a security agreement by the
Uniform Commercial Code as enacted in the State of New York or other applicable
jurisdiction, as amended and as in effect from time to time, and (iii) by any
other applicable law including, without limitation, any law governing the
exercise of a bank's right of setoff or bankers' lien.
5.2.2 CONTINGENT OBLIGATIONS. With respect to Obligations
which are contingent and cannot be accelerated by their nature, the
Administrative Agent may require the Company to deposit cash or other acceptable
collateral in an amount sufficient to cover principal and interest which will
have accrued by the maturity date on said Obligations to be held as security for
said Obligations in the special collateral account referred to in Section 7.
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5.3 COMPANY'S OBLIGATIONS UPON DEFAULT. Upon the request of the
Administrative Agent after the occurrence and during the continuance of a
Default, the Company will, subject to Section 8.18:
5.3.1 ASSEMBLY OF COLLATERAL. Assemble and make available to
the Administrative Agent the Collateral and all records relating thereto at any
place or places reasonably specified by the Administrative Agent.
5.3.2 ADMINISTRATIVE AGENT ACCESS. Permit the Administrative
Agent, by the Administrative Agent's representatives and agents, to enter any
premises where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all or any part of
the Collateral and to remove all or any part of the Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of any Agent, any Lender or any Interest Rate
Hedge Providers to exercise any right or remedy granted under this Security
Agreement shall impair such right or remedy or be construed to be a waiver of
any Default or an acquiescence therein, and any single or partial exercise of
any such right or remedy shall not preclude other or further exercise thereof or
the exercise of any other right or remedy, and no waiver, amendment or other
variation of the terms, conditions or provisions of this Security Agreement
whatsoever shall be valid unless in writing signed by the Administrative Agent
and the Required Lenders, and then only to the extent in such writing
specifically set forth; PROVIDED, HOWEVER, that any amendment purporting to
release all or any substantial portion of the Collateral shall be valid only if
approved in accordance with Section 8.2 of the Credit Agreement. All rights and
remedies contained in this Security Agreement or by law afforded shall be
cumulative and all shall be available to the Agents, the Lenders and any
Interest Rate Hedge Providers until the Obligations to the Agents, the Lenders
and any Interest Rate Hedge Providers have been paid in full and the Commitments
have been terminated.
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7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 COLLECTION OF RECEIVABLES. The Administrative Agent may at any
time after the occurrence and during the continuance of a Default, by giving the
Company written notice, elect to require that any or all of the Receivables be
paid directly to the Administrative Agent for the benefit of the Agents, the
Lenders and any Interest Rate Hedge Providers. In such event, the Company
shall, and shall permit the Administrative Agent to, promptly notify the account
debtors or obligors under the Receivables of the Agents', the Lenders' and any
Interest Rate Hedge Provider's interest therein and direct such account debtors
or obligors to make payment of all amounts then or thereafter due under the
Receivables directly to the Administrative Agent. Upon receipt of any such
notice from the Administrative Agent, the Company shall thereafter hold in trust
for the Agents, the Lenders and any Interest Rate Hedge Providers all amounts
and proceeds received by it with respect to the Receivables and other Collateral
and immediately and at all times thereafter deliver to the Administrative Agent
all such amounts and proceeds in the same form as so received, whether by cash,
check, draft or otherwise, with any necessary endorsements. The Administrative
Agent shall hold and apply funds so received as provided by the terms of
Sections 7.3 and 7.4.
7.2 LOCKBOXES. Upon request of the Administrative Agent at any time
after the occurrence and during the continuance of a Default, the Company shall
execute and deliver to the Administrative Agent the Administrative Agent's
standard form irrevocable lockbox agreements.
7.3 SPECIAL COLLATERAL ACCOUNT. The Administrative Agent may at any
time after the occurrence and during the continuance of a Default require all
cash proceeds of the Collateral received by the Administrative Agent to be
deposited in a special non-interest-bearing cash collateral account with the
Administrative Agent and held there as security for the Obligations. The
Company shall have no control whatsoever over said cash collateral account. The
Administrative Agent may from time to time (a) deposit the collected balances in
said cash collateral account into the Company's general operating account with
the Administrative Agent or (b) apply the
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collected balances in said cash collateral account to the payment of the
Obligations whether or not the Obligations shall then be due.
7.4 APPLICATION OF PROCEEDS. The proceeds of the Collateral shall be
applied by the Administrative Agent to payment of the Obligations in the
following order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of
each Agent incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Security
Agreement;
(b) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other than
principal), pro rata amongst each Lender and each Agent in accordance with the
proportion which the accrued interest, fees and other amounts (other than
principal) constituting Obligations owing to each such Lender or Agent bears to
the aggregate amount of accrued interest, fees and other amounts (other than
principal) constituting Obligations owing to all of the Lenders and the Agents;
(c) THIRD, to payment of the principal of the Obligations owing
to any Lender or any Interest Rate Hedge Provider, pro rata amongst each of the
Lenders and each of the Interest Rate Hedge Providers in accordance with the
proportion that the principal of the Obligations owing to each such Lender or
Interest Rate Hedge Provider bears to the aggregate amount of principal of the
Obligations owing to all of the Lenders and any Interest Rate Hedge Providers;
and
(d) FOURTH, the balance, if any, after all of the Obligations
have been satisfied, shall be deposited by the Administrative Agent into the
Company's general operating account.
8. GENERAL PROVISIONS.
8.1 NOTICE OF DISPOSITION OF COLLATERAL, ETC. The Company hereby
waives notice of the time and place of any public sale or the time after which
any private sale
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or other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall
be deemed reasonable if sent to the Company, addressed as set forth in Section
9, at least ten days prior to any such public sale or the time after which any
such private sale or other disposition may be made. In addition, the Company
waives, to the extent permitted by applicable law, (i) any right to require
either any Agent, any Lender or any Interest Rate Hedge Provider to proceed
against any other person, to exhaust their rights in any other collateral, or to
pursue any other right which either any Agent, any Lender or any Interest Rate
Hedge Provider may have, (ii) with respect to the Obligations, presentment and
demand for payment, protest, notice of protest and non-payment, and notice of
the intention to accelerate, and (iii) all rights of marshalling in respect of
any and all of the Collateral.
8.2 COMPROMISES AND COLLECTION OF COLLATERAL. The Company, the
Lenders, the Agents and any Interest Rate Hedge Providers recognize that
setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Receivables, that certain of the Receivables may
be or become uncollectible in whole or in part and that the expense and
probability of success in litigating a disputed Receivable may exceed the amount
that reasonably may be expected to be recovered with respect to a Receivable.
In view of the foregoing, the Company agrees that the Administrative Agent may
at any time and from time to time, if a Default has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any
Receivable such amount as the Administrative Agent in its reasonable discretion
shall determine or terminate or abandon any Receivable, and any such action by
the Administrative Agent shall be commercially reasonable so long as the
Administrative Agent acts in good faith based on information known to it at the
time it takes any such action.
8.3 SECURED PARTY PERFORMANCE OF COMPANY OBLIGATIONS. Without having
any obligation to do so, the Administrative Agent may perform or pay any
obligation in this Security Agreement which the Company has agreed to perform or
pay but which it has failed to so perform or pay in a timely manner after a
request therefor from the
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Administrative Agent and the Company shall reimburse the Administrative Agent
for any amounts paid by the Administrative Agent pursuant to this Section 8.3,
together with interest thereon at a rate per annum equal to 2% above the Base
Rate. The Company's obligation to reimburse the Administrative Agent pursuant
to the preceding sentence shall be an Obligation payable on demand.
8.4 AUTHORIZATION FOR SECURED PARTY TO TAKE CERTAIN ACTION. The
Company irrevocably authorizes the Administrative Agent at any time and from to
time in the sole discretion of the Administrative Agent and irrevocably appoints
the Administrative Agent as its attorney in fact to act on behalf of the Company
(i) at any time (if the Company has failed to do so promptly upon a request
therefor) (a) to execute on behalf of the Company as debtor and to file
financing statements necessary or desirable in the Administrative Agent's sole
discretion to perfect and to maintain the perfection and priority of the
Administrative Agent's security interest in the Collateral, and (b) to file a
carbon, photographic or other reproduction of this Security Agreement or any
financing statement with respect to the Collateral as a financing statement in
such offices as the Administrative Agent in its sole discretion deems necessary
or desirable to perfect and to maintain the perfection and priority of the
Administrative Agent's security interest in the Collateral and (ii) at any time
after the occurrence and during the continuance of a Default (a) to endorse and
collect any cash proceeds of the Collateral, (b) subject to the terms of Section
4.1.6., to enforce payment of the Receivables in the name of the Administrative
Agent or the Company, and (c) to apply the proceeds of any Collateral received
by the Administrative Agent to the Obligations as provided in Section 7. The
Company hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
8.5 SPECIFIC PERFORMANCE OF CERTAIN COVENANTS. The Company
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.6, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the Agents,
the Lenders and any Interest Rate Hedge Providers, that the Agents, the Lenders
and any Interest Rate Hedge Providers have no adequate remedy at law in respect
of such breaches and therefore agrees, without limiting the right of
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the Agents, the Lenders or any Interest Rate Hedge Providers to seek and obtain
specific performance of other obligations of the Company contained in this
Security Agreement, that the covenants of the Company contained in the Sections
referred to in this Section 8.5 shall be specifically enforceable against the
Company.
8.6 USE AND POSSESSION OF CERTAIN PREMISES. Subject to the
provisions of Section 8.18, upon the occurrence and during the continuance of a
Default, the Administrative Agent shall be entitled to occupy and use any
premises owned or leased by the Company where any of the Collateral or any
records relating to the Collateral are located until the Obligations are paid or
the Collateral is removed therefrom, whichever first occurs, without any
obligation to pay the Company for such use and occupancy.
8.7 DISPOSITIONS NOT AUTHORIZED. The Company is not authorized to
sell or otherwise dispose of the Collateral except as set forth in Section 4.1.6
and notwithstanding any course of dealing between the Company and the
Administrative Agent and other conduct of the Administrative Agent, no
authorization to sell or otherwise dispose of the Collateral (except as set
forth in Section 4.1.6) shall be binding upon the Agents, the Lenders or any
Interest Rate Hedge Providers unless such authorization is in writing signed by
the Administrative Agent with the consent of the Required Lenders.
8.8 DEFINITION OF CERTAIN TERMS. Terms defined in the New York
Uniform Commercial Code which are not otherwise defined in this Security
Agreement are used in this Security Agreement as defined in the New York Uniform
Commercial Code as in effect on the date hereof.
8.9 BENEFIT OF AGREEMENT. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Company, the
Agents, the Lenders and any Interest Rate Hedge Providers and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights under this Security Agreement or any interest herein, without
the prior written consent of the Administrative Agent.
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8.10 SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Company contained in this Security Agreement shall survive the execution
and delivery of this Security Agreement.
8.11 TAXES AND EXPENSES. Any Taxes payable or ruled payable by
Federal or State authority in respect of this Security Agreement shall be paid
by the Company, together with interest and penalties, if any, other than Taxes
expressly excluded under Section 3.2(a)(i) and 3.2(a)(ii) of the Credit
Agreement. The Company shall reimburse the Administrative Agent for any and all
reasonable out-of-pocket expenses and internal charges customarily charged by
the Administrative Agent (including reasonable attorneys', auditors' and
accountants' fees and reasonable time charges of attorneys, paralegals, auditors
and accountants who may be employees of the Administrative Agent) paid or
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, collection and enforcement of this Security
Agreement and in the audit, analysis, administration, collection, preservation
or sale of the Collateral (including the expenses and charges associated with
any periodic or special audit of the Collateral).
8.12 HEADINGS. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
8.13 TERMINATION. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations or
commitments therefor outstanding) until (i) the Administrative Agent has
received written notice of its termination from the Company or its agents or the
Liens in favor of the Administrative Agent have been released, (ii) no
Obligations to the Agents, the Lenders or any Interest Rate Hedge Providers
shall be outstanding and (iii) the Commitments shall have been terminated. At
such time, at the reasonable request and sole expense of the Company, the
Administrative Agent shall execute and deliver such documents and instruments as
may be necessary to evidence such termination and release.
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8.14 ENTIRE AGREEMENT. This Security Agreement embodies the entire
agreement and understanding between the Company and the Administrative Agent
relating to the Collateral and supersedes all prior agreements and
understandings between the Company and the Administrative Agent relating to the
Collateral.
8.15 CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
8.16 DISTRIBUTION OF REPORTS. The Company authorizes the
Administrative Agent, as the Administrative Agent may elect in its sole
discretion, to discuss with and furnish to the Agents, the Lenders, any Interest
Rate Hedge Providers or to any other person or entity having an interest in the
Obligations (whether as a guarantor, pledgor of collateral, participant or
otherwise) all financial statements, audit reports and other information
pertaining to the Company whether such information was provided by the Company
or prepared or obtained by the Administrative Agent provided that such other
person or entity agrees to hold such information in confidence except for
disclosure (i) to legal counsel, accountants and other professional advisors to
such purchaser, (ii) to regulatory officials, (iii) as required by law,
regulation or legal process, or (iv) in connection with any legal proceeding to
which such person or entity is a party. Neither the Administrative Agent nor
any of its employees, officers, directors or agents makes any representation or
warranty regarding any audit reports or other analyses of the Company's
condition which the Administrative Agent may in its sole discretion prepare and
elect to distribute, nor shall the Administrative Agent or any of its employees,
officers, directors or agents be liable to any person or entity receiving a copy
of such reports or analyses for any inaccuracy or omission contained in or
relating thereto.
8.17 INDEMNITY. The Company hereby agrees to assume liability for,
and does hereby agree to indemnify and keep harmless the Agents, the Lenders and
any Interest Rate Hedge Providers, and their respective successors, assigns,
agents and employees, from and against any and all liabilities, damages,
penalties, suits, costs, and expenses of any kind and nature, imposed on,
incurred by or asserted against the Agents, the Lenders or any
22
<PAGE>
Interest Rate Hedge Providers, or their respective successors, assigns, agents
and employees, in any way relating to or arising out of this Security Agreement,
or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Agents, the Lenders or any Interest Rate Hedge Providers
or the Company, and any claim for patent, trademark or copyright infringement),
excluding any such losses, claims, damages, penalties, judgments, liabilities,
costs and expenses which result from the gross negligence or willful misconduct
of any Agent, any Lender or any Interest Rate Hedge Provider.
8.18 CONTROL; LIMITATION OF RIGHTS.
(a) Notwithstanding anything herein to the contrary, this
Security Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby (i) do not and will not constitute, create, or have the
effect of constituting or creating, directly or indirectly, actual or practical
ownership of the Company by the Agents, the Lenders or any Interest Rate Hedge
Providers, or control, affirmative or negative, direct or indirect, by the
Agents, the Lenders or any Interest Rate Hedge Providers over the management or
any other aspect of the operation of the Company, which ownership and control
remains exclusively and at all times in the shareholders of the Company and the
Company, and (ii) except for the grant of a security interest hereunder to the
extent permitted by law, do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily, directly
or indirectly, of any license at any time issued by the FCC to the Company
("License"), or the transfer of control of the Company within the meaning of
Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this Security
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by the
Agents, the Lenders and any Interest Rate Hedge Providers hereunder which would
affect the operational, voting or other control of the
23
<PAGE>
Company, shall be pursuant to Section 310 of the Communications Act of 1934, as
amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 8.18(e), if a Default shall have occurred
and be continuing, the Company shall take any action which the Administrative
Agent, on behalf of the Agents, the Lenders and any Interest Rate Hedge
Providers, may reasonably request in order to transfer and assign to the
Administrative Agent, or to such one or more third parties as the Administrative
Agent may designate, or to a combination of the foregoing, each License. To
enforce the provisions of this Section 8.18 the Administrative Agent is
empowered to request the appointment of a receiver from any court of competent
jurisdiction. Such receiver shall be instructed to seek from the FCC an
involuntary transfer of control of each such License for the purpose of seeking
a bona fide purchaser to whom control will ultimately be transferred. The
Company hereby agrees to authorize such an involuntary transfer of control upon
the request of the receiver so appointed and, if the Company shall refuse to
authorize the transfer, the Company's approval may be required by the court.
Upon the occurrence and continuance of a Default, the Company shall further use
its best efforts to assist in obtaining approval of the FCC, if required, for
any action or transactions contemplated by this Security Agreement including,
without limitation, the preparation, execution and filing with the FCC of the
assignor's or transferor's portion of any application or applications for
consent to the assignment of any License or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of the transfer
or assignment of any portion of the Collateral, together with any License.
(d) The Company acknowledges that the assignment or transfer of
each License is integral to the Agents', the Lenders' and any Interest Rate
Hedge Provider's realization of the value of the Collateral, that there is no
adequate remedy at law for failure by the Company to comply with the provisions
of this Section 8.18 and that such failure would not be adequately compensable
in damages, and therefore agrees that the agree-
24
<PAGE>
ments contained in this Section 8.18 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Security Agreement or in any other Loan Document, neither any Agent, any Lender
nor any Interest Rate Hedge Provider shall, without first obtaining the approval
of the FCC, take any action pursuant to this Security Agreement which would
constitute or result in any assignment of a License or any change of control of
any License or the Company if such assignment or change in control would
require, under then existing law (including the written rules and regulations
promulgated by the FCC), the prior approval of the FCC.
8.19 INSURANCE PROCEEDS. Subject to the provisions set forth in
Section 6.18 of the Credit Agreement, so long as no Default or Unmatured Default
has occurred and is continuing or is reasonably anticipated to occur, insurance
proceeds received in respect of Inventory, Equipment and Fixtures shall be
remitted to the Company by the Administrative Agent, provided that such proceeds
are used to rebuild, repair or restore such Inventory, Equipment or Fixtures to
a condition at least as good as its former condition or to replace such
Inventory, Equipment or Fixture with like property of at least equal value.
8.20 COMPANY REMAINS LIABLE. Anything herein to the contrary
notwithstanding,
(a) the Company shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein and shall
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Security Agreement had not been executed,
(b) the exercise by the Administrative Agent of any of its
rights hereunder shall not release the Company from any of its duties or
obligations under any such contracts or agreements included in the Collateral,
and
(c) neither any Agent, any Lender nor any Interest Rate Hedge
Provider shall have any obligation or liability under any such contracts or
agreements included
25
<PAGE>
in the Collateral by reason of this Security Agreement, nor shall any Agent, any
Lender or any Interest Rate Hedge Provider be obligated to perform any of the
obligations or collect or enforce any claim for payment assigned hereunder.
9. NOTICES; COUNTERPARTS; ETC.
9.1 SENDING NOTICES. Any notice required or permitted to be given
under this Security Agreement shall be in writing and may be, and shall be
deemed, given, if mailed, three days after the date when deposited in the United
States mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to the Company at the address set forth
on Exhibit "A" hereto as its chief executive office (with copies to Sheli Z.
Rosenberg, Esq., Rosenberg & Liebentritt, L.P., 2 North Riverside Plaza, Suite
600, Chicago, Illinois 60606, provided, however, that the failure to provide any
such copy shall not affect the validity or sufficiency of any such notice), to
the Administrative Agent at the address indicated below its signature hereto, to
the other Agents and the Lenders at the addresses indicated below their
respective signatures to the Credit Agreement and to any Interest Rate Hedge
Providers at the addresses provided to the Company and the Administrative Agent
in writing by such Interest Rate Hedge Providers.
9.2 CHANGE IN ADDRESS FOR NOTICES. Each of the Company, the Agents,
the Lenders and any Interest Rate Hedge Providers may change the address for
service of notice upon it by a notice in writing to the other parties.
9.3 COUNTERPARTS. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when
it has been executed by the Company and the Administrative Agent.
9.4 LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein)
26
<PAGE>
be construed, administered and applied in accordance with the terms and
provisions thereof.
10. THE ADMINISTRATIVE AGENT.
Chemical Bank has been appointed Administrative Agent of the Agents,
the Lenders and any Interest Rate Hedge Providers hereunder pursuant to Article
X of the Credit Agreement, and the Administrative Agent has agreed to act (and
any successor Administrative Agent shall act) as such hereunder only on the
express conditions contained in such Article X. Any successor Administrative
Agent appointed pursuant to Article X of the Credit Agreement shall be entitled
to all the rights, interests and benefits of the Administrative Agent
hereunder.
27
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Security
Agreement as of the date first above written.
JCAC, INC.
By:/s/ R. Christopher Weber
-------------------------------------
Title:Sr. Vice President
----------------------------------
By:/s/ Jon M. Berry
-------------------------------------
Title:Sr. Vice President
----------------------------------
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
CHEMICAL BANK, as Administrative Agent
By:/s/ C.C. Wardell
-------------------------------------
Title:Managing Director
----------------------------------
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
<PAGE>
EXHIBIT "A"
(See Sections 3.4 and 3.5 of Security Agreement)
Chief Executive Office and Mailing Address:
JCAC, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
Location(s) of Receivables Records (if different from Chief Executive Office
above):
Locations of Inventory and Equipment and Fixtures:
A. PROPERTIES OWNED BY THE COMPANY:
None
B. PROPERTIES LEASED BY THE COMPANY (Include Landlord's Name):
None
<PAGE>
EXHIBIT "B"
Legal Description and Street Address of Property on which Fixtures are located:
(See Section 3.9 of Security Agreement)
None
Name and Address of Record Owner:
---------------------------------
---------------------------------
---------------------------------
<PAGE>
EXHIBIT "C"
(See Section 3.10 of Security Agreement)
EXISTING LIENS ON THE COLLATERAL
Secured Party Collateral Principal Balance Maturity
- ------------- ---------- ----------------- --------
Banque Pari- all assets Up to 12/31/03
bas, as Agent, $300,000,000
granted pursuant
to the Subsidiary
Security Agree-
ment dated as of
February 20, 1996
<PAGE>
EXHIBIT "D"
(See Section 3.11 of Security Agreement)
LIST OF PLEDGED SECURITIES
A. STOCKS: None
B. BONDS:
Issuer Number Face Amount Coupon Rate Maturity
- ------ ------ ----------- ----------- --------
None
C. GOVERNMENT SECURITIES:
Issuer Number Face Amount Coupon Rate Maturity
- ------ ------ ----------- ----------- --------
None
<PAGE>
PARENT GUARANTY
THIS PARENT GUARANTY (the "Parent Guaranty"), dated as of June 12,
1996, is made by Jacor Communications, Inc., an Ohio corporation (the "Parent
Guarantor"), in favor of and for the benefit of Chemical Bank, as administrative
agent (the "Administrative Agent") for the Agents, the Lenders and any Interest
Rate Hedge Providers (each as defined in the Credit Agreement referred to
hereafter). All capitalized terms used herein but not defined herein shall have
the meanings attributed to such terms in the Credit Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, JCAC, Inc. (the "Company"), the Agents and the Lenders have
entered into that certain Credit Agreement, dated as of the date hereof (as
modified, supplemented, amended, extended, supplanted or restated from time to
time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Hedge Providers;
WHEREAS, the Company is a wholly-owned direct Subsidiary of the Parent
Guarantor and each expects to realize substantial direct and indirect benefits
as a result of the Company entering into the Credit Agreement and the Rate
Hedging Agreements; and
WHEREAS, the execution and delivery of this Parent Guaranty is a
condition precedent to the availability of credit under the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing, to induce each
Agent and each Lender and each Interest Rate Hedge Provider to enter into the
Credit Agreement and Rate Hedging Agreements, respectively, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parent Guarantor hereby agrees as follows:
<PAGE>
1. GUARANTY. The Parent Guarantor irrevocably and unconditionally
guarantees the full and prompt payment when due (whether at stated maturity,
upon acceleration or otherwise) of all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all other
Obligations of the Company to the Lenders or to any Lender, any Agent or any
Interest Rate Hedge Provider (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the Federal
Bankruptcy Code, 11 U.S.C. Section 362(a)), and the operation of Sections 502(b)
and 506(b) of the Federal Bankruptcy Code, 11 U.S.C. Section 502(b) and Section
506(b)) now existing or hereafter incurred under, arising out of or in
connection with the Loan Documents, including, without limitation, any
amendments to such Loan Documents which may increase the obligations of the
Parent Guarantor guaranteed hereunder (all such principal, interest, fees,
obligations and liabilities being collectively referred to herein as the
"Guaranteed Debt"). At any time after the occurrence and during the continuance
of a Default, the Parent Guarantor shall pay to the Administrative Agent for the
benefit of the Agents, the Lenders and any Interest Rate Hedge Providers on
demand and in immediately available funds, the full amount of the Guaranteed
Debt (including any portion thereof which is not yet due and payable). This
Parent Guaranty constitutes a guaranty of payment when due and not of
collection, and the Parent Guarantor specifically agrees that it shall not be
necessary or required that any Agent, any Lender or any Interest Rate Hedge
Provider exercise any right, assert any claim or demand or enforce any remedy
whatsoever against the Company (or any other Person) before or as a condition to
the obligations of the Parent Guarantor hereunder.
2. WAIVER. The Parent Guarantor waives notice of the acceptance of
this Parent Guaranty and of the extension or continuation of the Guaranteed Debt
or any part thereof. The Parent Guarantor further waives presentment, protest,
notice, demand, or action on delinquency in respect of the Guaranteed Debt or
any part thereof, including any right to require any Agent, any Lender or any
Interest Rate Hedge Provider to sue the Company, any other guarantor under any
Subsidiary Guaranty, or any other guarantor or other Person obligated with
respect to the Guaranteed Debt or any part thereof, or
2
<PAGE>
otherwise to enforce payment thereof against any collateral securing the
Guaranteed Debt or any part thereof.
3. CERTAIN RIGHTS OF AGENTS, LENDERS AND INTEREST RATE HEDGE
PROVIDERS. The validity and enforceability of this Parent Guaranty shall not be
impaired or affected by any of the following, whether occurring before or after
receipt by any Agent, any Lender or any Interest Rate Hedge Provider of any
notice of termination of this Parent Guaranty and the Parent Guarantor hereby
expressly waives any and all defenses now or hereafter arising or asserted by
reason of: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Debt or any part thereof or any
agreement relating thereto (other than any agreement between the Agents or the
Lenders and the Parent Guarantor specifically modifying or amending the terms of
this Parent Guaranty) at any time; (b) any failure or omission to enforce any
right, power or remedy with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto, or any collateral securing the Guaranteed
Debt or any part thereof; (c) any waiver of any right, power or remedy or of any
default with respect to the Guaranteed Debt or any part thereof or any agreement
relating thereto or with respect to any collateral securing the Guaranteed Debt
or any part thereof; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any collateral
securing the Guaranteed Debt or any part thereof, any other guaranties with
respect to the Guaranteed Debt or any part thereof, or any other obligation of
any person or entity with respect to the Guaranteed Debt or any part thereof;
(e) the unenforceability or invalidity of the Guaranteed Debt or any part
thereof or the lack of genuineness, unenforceability or invalidity of any
agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (f) the application of payments received
from any source to the payment of indebtedness other than the Guaranteed Debt,
any part thereof or amounts which are not covered by this Parent Guaranty even
though an Agent, a Lender or an Interest Rate Hedge Provider might lawfully have
elected to apply such payments to any part or all of the Guaranteed Debt or to
amounts which are not covered by this Parent Guaranty; (g) any disability or
other defense of any of the Company or any other guarantor with respect to the
Guar-
3
<PAGE>
anteed Debt or any part thereof; (h) the unenforceability or invalidity of
any security or guaranty for the Guaranteed Debt or the lack of perfection or
continuing perfection or failure of priority of any security for the
Guaranteed Debt; (i) the cessation for any cause whatsoever of the liability
of any of the Company or any other guarantor with respect to the Guaranteed
Debt or any part thereof (other than by reason of the full payment and
performance of all Guaranteed Debt); (j) any failure of the Administrative
Agent to marshall assets in favor of the Parent Guarantor or any other
Person; (k) any failure of the Administrative Agent to give notice of sale or
other disposition to the Parent Guarantor or any defect in any notice that
may be given in connection with any sale or disposition; (l) any act or
omission of any Agent, any Lender or any Interest Rate Hedge Provider or
others that directly or indirectly results in or aids the discharge or
release of any of the Company or any other guarantor with respect to the
Guaranteed Debt or any part thereof or the Guaranteed Debt or any other
security or guaranty therefor by operation of law or otherwise; (m) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion
to the principal obligations; or (n) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the Parent
Guarantor, all whether or not the Parent Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (a)
through (n) of this paragraph.
4. ABSOLUTE GUARANTY. The obligations of the Parent Guarantor under
this Parent Guaranty are absolute, irrevocable and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, without limitation:
(a) any action or inaction by any Agent, any Lender or any Interest Rate Hedge
Provider contemplated in Section 3 of this Parent Guaranty; or (b) the existence
of any other guaranties of the Guaranteed Debt, whether or not such other
guaranties have been acted upon in any way. This Parent Guaranty is a primary
obligation of the Parent Guarantor.
5. WAIVER OF RIGHTS OF SUBROGATION, ETC. The Parent Guarantor
hereby irrevocably waives any claim or
4
<PAGE>
other rights which it may now or hereafter acquire against the Company or any
other guarantor with respect to the Guaranteed Debt or any part thereof that
arise from the existence, payment, performance or enforcement of the Parent
Guarantor's obligations under this Parent Guaranty or any other Loan Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of any Agent,
any Lender or any Interest Rate Hedge Provider against the Company or any other
guarantor with respect to the Guaranteed Debt or any part thereof or any
collateral which the Administrative Agent now has or hereafter acquires, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including the right to take or receive from the Company or any
other guarantor with respect to the Guaranteed Debt or any part thereof,
directly or indirectly, in cash or other property or by set- off or in any
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Parent Guarantor in violation of the preceding
sentence and the Guaranteed Debt shall not have been paid in cash in full, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for, the Agents, the Lenders and any Interest Rate Hedge
Providers, and shall forthwith be paid to the Administrative Agent to be
credited and applied upon the Guaranteed Debt, whether matured or unmatured.
The Parent Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and the Rate Hedging Agreements and that the waiver set forth in this Section is
knowingly made in contemplation of such benefits. The Parent Guarantor waives
any benefit of the collateral, if any, which may from time to time secure the
Guaranteed Debt or any part thereof and authorizes the Agents and the Lenders to
take any action or exercise any remedy with respect thereto, which the Agents
and the Lenders in their sole discretion shall determine, without notice to the
Parent Guarantor. In the event the Agents or the Lenders in its or their sole
discretion elect to give notice of any action with respect to the collateral, if
any, securing the Guaranteed Debt or any part thereof, ten days' written notice
mailed to the Parent Guarantor by ordinary mail at the address shown hereon
shall be deemed reasonable notice of any matters contained in such notice.
5
<PAGE>
6. REPRESENTATIONS AND WARRANTIES OF THE PARENT GUARANTOR. The
Parent Guarantor makes the following representations, warranties and agreements:
(a) The Parent Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of Ohio and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
(b) The Parent Guarantor has the corporate power and authority
and legal right to execute and deliver this Parent Guaranty and to perform its
obligations hereunder. The execution and delivery by the Parent Guarantor of
this Parent Guaranty and the performance of its obligations hereunder have been
duly authorized by proper corporate proceedings, and this Parent Guaranty
constitutes the legal, valid and binding obligation of such Parent Guarantor
enforceable against such Parent Guarantor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
(c) Neither the execution and delivery by the Parent Guarantor
of this Parent Guaranty, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof will violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
such Parent Guarantor or its articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which such Parent
Guarantor is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the property of such Parent Guarantor
pursuant to the terms of any such indenture, instrument or agreement, except any
violation, default or Lien which would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance
6
<PAGE>
of, or the legality, validity, binding effect or enforceability of, this Parent
Guaranty, other than the filing, within the period established by applicable
law, of this Parent Guaranty with the FCC.
(d) The Guaranteed Debt constitutes Senior Debt under the Senior
Subordinated Note Indenture.
7. CONTINUING GUARANTY, ETC. This Parent Guaranty shall remain in
full force and effect until the indefeasible payment in full of all of the
Guaranteed Debt. No failure or delay on the part of any Agent, any Lender or
any Interest Rate Hedge Provider in exercising any right, power or privilege
hereunder and no course of dealing between the Parent Guarantor, any other
guarantor with respect to the Guaranteed Debt or any part thereof, any Agent,
any Lender or any Interest Rate Hedge Provider or the holder of any Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights,
powers and remedies herein expressly provided are cumulative and not exclusive
of any rights, powers or remedies which any Agent, any Lender or any Interest
Rate Hedge Provider or the holder of any Note would otherwise have. No notice
to or demand on the Parent Guarantor in any case shall entitle the Parent
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Agent, any Lender or
any Interest Rate Hedge Provider or the holder of any Note to act in any
circumstances without notice or demand. Credit may be granted or continued from
time to time by any Lender or any Interest Rate Hedge Provider to the Company
without notice to or authorization from the Parent Guarantor regardless of the
Company's financial or other condition at the time of any such grant or
continuation. Neither any Agent, any Lender nor any Interest Rate Hedge
Provider shall have any obligation to disclose or discuss with the Parent
Guarantor its assessment of the financial condition of the Company.
8. COVENANTS OF THE PARENT GUARANTOR. The Parent Guarantor
covenants and agrees that until the Aggregate Commitment has been terminated,
all Letters of Credit have expired or been terminated and the Obligations have
been indefeasibly paid in full:
7
<PAGE>
(a) CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE AND LICENSES.
The Parent Guarantor will cause the Company and each of its Subsidiaries to
carry on and conduct their businesses in compliance with the terms of the Loan
Documents.
(b) PRESERVATION OF EXISTENCE. The Parent Guarantor shall
preserve and maintain its corporate existence in the State of Ohio; provided,
however, that the Parent Guarantor may merge, solely for the purpose of changing
the state of its incorporation from Ohio to Delaware, into a Delaware
corporation formed by the Parent Guarantor; provided further that (i) the Parent
Guarantor shall deliver to the Administrative Agent all consents, approvals,
resolutions, charter documents, certificates and other documents requested by
the Administrative Agent, (ii) the Parent Guarantor agrees to notify the
Administrative Agent at least two Business Days prior to the consummation of any
such merger and (3) the Parent Guarantor confirms and agrees that all references
to the "Parent", the "Parent Guarantor" or "Jacor Communications, Inc." in any
Loan Document shall be, upon consummation of any such merger, references to
Jacor Communications, Inc., a Delaware corporation. The Parent Guarantor shall
preserve and maintain all authorizations, rights, franchises, privileges,
consents, approvals, orders, licenses, permits or registrations from any
Governmental Authority that are necessary for the transaction of its business,
and qualify and remain qualified to transact business in each jurisdiction in
which such qualification is necessary in view of its business.
(c) COMPLIANCE WITH LAWS. The Parent Guarantor will comply with
all laws (including, without limitation, the Communications Act), rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, including, without limitation, all Environmental Laws and all
rules and regulations promulgated by the FCC and all FCC authorizations, except
where the failure to so comply would not have a material adverse effect on the
business, operations or condition (financial or otherwise) of the Parent
Guarantor and its Subsidiaries, taken as a whole, and would not result in the
loss, cancellation, rescission, termination
8
<PAGE>
or revocation of any broadcast license granted to the Company or any of its
Subsidiaries by the FCC.
(d) FCC LICENSES. The Parent Guarantor shall not obtain, hold
or be licensee under any FCC Broadcast Station License.
(e) INSPECTION, ETC. The Parent Guarantor will permit the
Administrative Agent and any Lender, by their respective representatives and
agents, to inspect any of the properties, corporate books and financial records
of the Parent Guarantor, to examine and (except in the case of confidential
information relating to the Parent Guarantor's relationship with third parties)
make copies of the books of accounts and other financial records of the Parent
Guarantor, and to discuss the affairs, finances and accounts of the Parent
Guarantor with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as any Lender may designate by reasonable
prior notice to the Parent Guarantor. The Parent Guarantor shall provide to the
Administrative Agent such appraisals of the Parent Guarantor's properties as the
Administrative Agent or any Lender is required to obtain by any law or
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and any rules promulgated to implement
such provisions.
(f) ASSETS. The Parent Guarantor shall not own any assets other
than the capital stock of each of its Subsidiaries and any immaterial assets of
the Parent Guarantor necessary for corporate administrative purposes.
(g) INDEBTEDNESS. The Parent Guarantor will not create, incur
or suffer to exist any Indebtedness other than (i) Indebtedness under the Loan
Documents to which the Parent Guarantor is a party, (ii) pursuant to zero coupon
unsecured notes of the Parent Guarantor which notes are convertible into shares
of common stock of the Parent Guarantor and have a maturity date no earlier than
June 12, 2011, and with respect to which there is no obligation to make any
payment in cash prior to the maturity of such notes; PROVIDED that any such
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notes shall be issued pursuant to terms which are substantially similar to those
of the Liquid Yield Option Notes which are issued pursuant to terms acceptable
to the Agents or such other terms which shall be acceptable to the Agents or
(iii) the Guaranty of the Parent Guarantor permitted pursuant to Section 8(i)
hereof.
(h) FINANCIAL REPORTING. The Parent Guarantor will maintain,
for itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with Generally Accepted Accounting Principles, and
furnish to the Administrative Agent and the Lenders:
(i) Within 90 days after the close of each of its fiscal
years, an unqualified audit report certified by independent certified
public accountants of nationally recognized standing, acceptable to the
Administrative Agent, prepared in accordance with Generally Accepted
Accounting Principles on a consolidated basis for the Parent Guarantor and
its Subsidiaries, including balance sheets as of the end of such period,
related profit and loss and reconciliation of surplus statements
(consolidated only), setting forth in comparative form the figures for the
previous fiscal year, and a statement of cash flows (consolidated only),
accompanied by (i) a letter from said accountants substantially in the form
of Exhibit L to the Credit Agreement and (ii) a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such accountants,
any Default or Unmatured Default shall exist, stating the nature and status
thereof.
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(ii) Within 30 days after the end of each calendar month,
for the Parent Guarantor and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such month
and consolidated profit and loss statements for such month and for the
period from the beginning of the Parent Guarantor's fiscal year to the end
of such month, in each case prepared in accordance with Generally Accepted
Accounting Principles and setting forth in comparative form the
corresponding figures for the comparable periods in the preceding fiscal
year, for the period from the beginning of such fiscal year to the end of
such month, all certified by the Parent Guarantor's Treasurer or Chief
Financial Officer and prepared in accordance with Generally Accepted
Accounting Principles, except with respect to the unaudited balance sheets
which are not adjusted to reflect (1) the carrying value of barter
receivables and barter payables in accordance with FASB No. 63 and (2) the
classification of outstanding debt between short term and long term. In
addition, such statements will not include footnotes.
(iii) Within 180 days after the close of each fiscal year,
a statement of the Unfunded Liabilities of each Parent Plan, certified as
correct by an Authorized Officer of the Parent Guarantor.
(iv) As soon as possible and in any event within five
Business Days after an Authorized Officer of the Parent Guarantor learns
(i) that any Re-
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portable Event has occurred with respect to any Parent Plan or (ii) that
any Reportable Event has occurred with respect to any Plan other than a
Parent Plan and, in the exercise of such officer's good faith judgment,
such officer determines that such Reportable Event is reasonably likely to
result in payment by the Parent Guarantor and its Subsidiaries in excess of
$4,000,000, in each such case, a statement, signed by the Chief Financial
Officer of the Parent Guarantor, describing said Reportable Event and the
action which the Parent Guarantor or the ERISA Affiliate (if applicable)
proposes to take with respect thereto.
(v) Such other information (including non-financial
information) as the Administrative Agent or any Lender may from time to
time reasonably request.
(i) GUARANTIES. The Parent Guarantor will not make or suffer to
exist any Guaranty (including, without limitation, any Guaranty of the
obligations of a Subsidiary of the Parent Guarantor), except Guaranties arising
under this Parent Guaranty and a senior subordinated Guaranty pursuant to, and
subject to the subordination provisions of, the Senior Subordinated Notes and
the Senior Subordinated Note Indenture.
(j) LIENS. The Parent Guarantor will not create, incur, or
suffer to exist any Lien in, of or on any of the property or assets of the
Parent Guarantor except for Liens in favor of the Administrative Agent and the
Lenders created pursuant to the Collateral Documents.
(k) TAXES. The Parent Guarantor will pay, before they become
delinquent, all taxes, assessments and governmental charges and levies upon it
or its income, profits or property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set
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aside in accordance with Generally Accepted Accounting Principles.
(l) SALE OF CAPITAL STOCK OF THE COMPANY. The Parent Guarantor
shall not sell, transfer or otherwise dispose of any of the capital stock of the
Company.
(m) MANAGEMENT FEES. The Parent Guarantor will not pay or
become obligated to pay, any management or other similar fee to Z/C or any of
its Affiliates (other than reasonable and customary fees for services actually
rendered by professionals).
(n) CERTAIN AGREEMENTS. The Parent Guarantor shall not enter
into any agreement (other than the Loan Documents) which restricts the ability
of the Parent Guarantor to (i) enter into amendments, modifications or waivers
of the Loan Documents, (ii) sell, transfer or otherwise dispose of its assets,
(iii) create, incur, assume or suffer to exist any Lien upon any of its
property, (iv) create, incur, assume, suffer to exist or otherwise become liable
with respect to any Indebtedness, or (v) make any Restricted Payment.
(o) USE OF PROCEEDS OF DIVIDENDS. The Parent Guarantor shall
not use or apply any proceeds from any dividends which the Parent Guarantor
receives from the Company, and the use of which is restricted by the terms of
the Credit Agreement, in violation of any of the terms of the Credit Agreement.
(p) AMENDMENT TO OTHER AGREEMENTS. The Parent Guarantor shall
not amend, restate or otherwise modify or waive any provision of the Liquid
Yield Option Note Documents, the Senior Subordinated Note Documents or the
Parent Contribution Documents without the prior written consent of the
Administrative Agent and the Required Lenders.
(q) ANNUAL CAPITAL CONTRIBUTION. In the event that the Parent
Guarantor receives any Annual Management Fees from the Company, the Parent
Guarantor shall (a) contribute to the capital of the Company the full amount of
all cash payments of, and any other assets distributed to the Parent Guarantor
with respect to, Annual Management Fees within three Business Days after
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the Parent Guarantor receives any such cash payment or other assets, and (b) the
Parent Guarantor shall direct the Company to directly deposit all cash payments
of Annual Management Fees in the Parent Account and all such cash payments shall
remain in the Parent Account until they are contributed to the capital of the
Company. All amounts in the Parent Account shall be and remain subject to the
Parent Account Assignment.
(r) NOTICE OF DEFAULT, LITIGATION ETC. The Parent Guarantor
will, (a) within two (2) Business Days after an Authorized Officer of the Parent
Guarantor or the Company learns of the occurrence or existence thereof, give
notice in writing to the Administrative Agent of the occurrence of any Default
or Unmatured Default and (b) within five (5) Business Days after an Authorized
Officer of the Parent Guarantor or the Company learns of the occurrence or
existence thereof, give notice to the Administrative Agent in writing of (i) any
litigation or other development (other than the issuance or adoption of any new
federal, state or local statute, regulation or ordinance or any other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect the
business, properties, financial condition or results of operations of the Parent
Guarantor, the Company and its Subsidiaries, taken as a whole, or which is
reasonably likely to adversely affect the ability of the Parent Guarantor, the
Company or any of its Subsidiaries to repay the Obligations as and when due or
perform any of their other respective obligations under the Loan Documents or
(ii) the receipt by the Parent Guarantor, the Company or any of its Subsidiaries
of any notice from any federal, state or local governmental or regulatory body
or authority of the expiration without renewal, termination, material
modification or suspension of, or institution of any proceedings to terminate,
materially modify, or suspend, any license granted by the FCC or any other
license now or hereafter held by the Company or any of its Subsidiaries which is
required to operate any of the Radio Stations or Television Stations in
compliance with all applicable laws and regulations.
9. SUCCESSORS, ASSIGNS. This Parent Guaranty shall be binding upon
the Parent Guarantor and its successors and assigns and shall inure to the
benefit of the Lenders, the Agents and any Interest Rate Hedge Providers
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and their respective successors and assigns, PROVIDED, HOWEVER, that the Parent
Guarantor may not transfer, or otherwise assign, any of its obligations
hereunder without the prior written consent of the Lenders.
10. AMENDMENT, WAIVER. Neither this Parent Guaranty nor any
provision hereof may be amended, waived, discharged or terminated except as
provided in Section 8.2 of the Credit Agreement.
11. REINSTATEMENT. This Parent Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by any of the Agents, the Lenders or any Interest Rate Hedge Provider
and applied in respect of the Guaranteed Debt is rescinded or must otherwise be
restored or returned by any of the Agents, the Lenders or any Interest Rate
Hedge Provider upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Parent Guarantor, the Company or any other guarantor with
respect to the Guaranteed Debt or any part thereof or upon the appointment of
any intervenor or conservator of, or trustee or similar official for, the Parent
Guarantor, the Company or any other guarantor with respect to the Guaranteed
Debt or any part thereof or any substantial part of their respective assets, or
otherwise, all as though such payments had not been made.
12. CREDIT AGREEMENT. The Parent Guarantor acknowledges that an
executed (or conformed) copy of the Credit Agreement has been made available to
its principal executive officers and such officers are familiar with the
contents thereof.
13. SETOFF, ETC. In addition to, and without limitation of, any
rights of the Lenders and any Interest Rate Hedge Providers under applicable
law, if the Company becomes insolvent, however evidenced, or any Default exists,
any indebtedness from any Lender or any Interest Rate Hedge Provider to the
Parent Guarantor (including all account balances, whether provisional or final
and whether or not collected or available) may be offset and applied toward the
payment of the obligations owing to such Lender or Interest Rate Hedge Provider,
whether or not the Guaranteed Debt, or any part thereof, shall then be due.
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<PAGE>
14. NOTICES. All notices and other communications hereunder shall be
made at the addresses, in the manner and with the effect provided in Article
XIII of the Credit Agreement; PROVIDED that, for this purpose, the address of
the Parent Guarantor shall be the one specified opposite its signature below.
15. LIMITATION OF LIABILITY. No claim may be made by the Parent
Guarantor or any other Person against any Agent or any Lender or the Affiliates,
directors, officers, employees, attorneys or agent of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by the Credit Agreement, this Parent Guaranty or
any other Transactions, or any act, omission or event occurring in connection
therewith; and the Parent Guarantor hereby waives, releases and agrees not to
sue upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor and the Parent Guarantor agrees to
notify each Agent and each Lender, as applicable, of any such claim promptly
upon learning of any such claim.
16. LIABILITY OF AGENTS, LENDERS, INTEREST RATE HEDGE PROVIDERS, ETC.
If any claim is ever made upon any Agent, any Lender and Interest Rate Hedge
Provider or the holder of any Note for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Debt and any
of the aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Company), then and in such event the Parent Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
it, notwithstanding any revocation hereof or the cancellation of any Note or
other instrument evidencing any liability of the Company, and the Parent
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
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17. CHOICE OF LAW; CONSENT TO JURISDICTION. THIS PARENT GUARANTY AND
THE PARENT PLEDGE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK. THE PARENT GUARANTOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT
SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS PARENT GUARANTY OR THE PARENT PLEDGE AGREEMENT AND THE PARENT
GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
18. EXPENSES. The Parent Guarantor agrees to pay all reasonable
costs, fees and expenses (including reasonable attorneys' fees and time charges
and attorneys for the Agents, the Lenders and any Interest Rate Hedge Providers,
which attorneys may be employees of any Agent, any Lender and any Interest Rate
Hedge Providers) incurred by the Agents, the Lenders and any Interest Rate Hedge
Providers in collecting or enforcing the Parent Guarantors' obligations under
this Parent Guaranty.
19. LOAN DOCUMENT. This Parent Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
20. SECTION CAPTIONS. Section captions used in this Parent Guaranty
are for convenience of reference only and shall not affect the construction of
this Parent Guaranty.
21. SEVERABILITY. Wherever possible each provision of this Parent
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Parent Guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of
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such provision or the remaining provisions of this Parent Guaranty.
22. WAIVER OF JURY TRIAL. EACH OF THE PARENT GUARANTOR AND THE
ADMINISTRATIVE AGENT BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
PARENT GUARANTY. THE PARENT GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS TO ENTER INTO
THE CREDIT AGREEMENT AND ANY INTEREST RATE HEDGE PROVIDERS TO ENTER INTO RATE
HEDGING AGREEMENTS.
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IN WITNESS WHEREOF, the Parent Guarantor has caused this Parent
Guaranty to be executed and delivered as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:/s/ R. Christopher Weber
------------------------------------------
Name: R. Christopher Weber
Title: Sr. Vice President
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-6087
Attention: R. Christopher Weber
<PAGE>
EXHIBIT D-5
JACOR COMMUNICATIONS, INC.
PARENT PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Parent Pledge Agreement") is executed as
of June 12, 1996, by and between Jacor Communications, Inc. (the "Company") and
Chemical Bank, as administrative agent (the "Administrative Agent") for the
Agents, the Lenders and any Interest Rate Hedge Providers (each as defined in
the Credit Agreement referred to hereafter).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, JCAC, Inc. ("JCAC") has entered into that certain Credit
Agreement dated as of June 12, 1996 with the Lenders and the Agents (as
modified, supplemented, amended, extended, supplemented or restated from time to
time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires JCAC to enter into certain Rate
Hedging Agreements (as defined in the Credit Agreement) with Interest Rate Hedge
Providers;
WHEREAS, JCAC is a wholly-owned subsidiary of the Company;
WHEREAS, the Company expects to realize substantial direct and
indirect benefits as a result of JCAC entering into the Credit Agreement and the
Rate Hedging Agreements; and
WHEREAS, execution and delivery of this Parent Pledge Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
NOW THEREFORE, in consideration of the foregoing and of the direct and
indirect benefits to be received by the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
<PAGE>
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement. The following term shall have the following meaning:
"Obligations" means all obligations of the Company under the Parent
Guaranty executed by the Company including, without limitation, all obligations
of the Company pursuant to Section 1 of such Parent Guaranty.
2. PLEDGE AND SECURITY INTEREST; DEPOSIT OF CERTIFICATES FOR PLEDGED
STOCK.
(a) PLEDGE AND SECURITY INTEREST. In order to secure the full
and complete payment and performance by the Company of the Obligations when due,
the Company hereby pledges and grants to the Administrative Agent for the
benefit of the Agents, the Lenders and any Interest Rate Hedge Providers,
equally and ratably in proportion to the total Obligations owing at any time to
the Agents, the Lenders and any Interest Rate Hedge Providers, a continuing lien
and security interest in (a) all of the outstanding shares of capital stock of
each Subsidiary of the Company currently or hereafter owned by the Company,
including, without limitation, the shares listed on Schedule I hereto (the
"Pledged Stock"), (b) any securities, dividends or other distributions and any
other right or property at any time and from time to time receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock and any other property substituted or exchanged therefor and (c) any and
all proceeds (including, without limitation, "Proceeds" as defined in the
Uniform Commercial Code as in effect from time to time in the State of New York)
of, and substitutions and replacements for, the foregoing (all of the property
and rights described in the foregoing clauses (a) through (c) being herein
collectively called the "Collateral").
(b) On the Closing Date, the Company shall deliver to the
Administrative Agent, for the equal and ratable benefit of the Agents, the
Lenders and any Interest Rate Hedge Providers, the certificates representing the
Pledged Stock, endorsed in blank or accompanied by appropriate instruments of
transfer or assignments in blank. The Administrative Agent shall not have any
duty to assure that all certificates representing the
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Pledged Stock have been delivered to it or any obligation whatsoever with
respect to the care, custody or protection of any certificates which may be
delivered to it except only to exercise the same care in physically safekeeping
such certificates as it would exercise in the ordinary course of its own
business. Neither any Agent, any Lender nor any Interest Rate Hedge Provider
shall be obligated to preserve or protect any rights with respect to the Pledged
Stock or to receive or give any notice with respect thereto whether or not any
Agent, any Lender or any Interest Rate Hedge Provider is deemed to have
knowledge of such matters.
3. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Agent, each Lender and each Interest Rate Hedge Provider as of
the date of each pledge and delivery hereunder that:
(a) EXISTENCE AND STANDING. As of the date hereof, the Company
is duly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
(b) AUTHORIZATION, VALIDITY AND ENFORCEABILITY. The execution
and delivery by the Company of this Parent Pledge Agreement have been duly
authorized by proper corporate proceedings, and this Parent Pledge Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. All of the shares of the Pledged Stock are duly
authorized, validly issued, fully paid and nonassessable.
(c) TRANSFERABILITY OF PLEDGED STOCK; TITLE MATTERS. The
Pledged Stock is free and clear of all liens, options, warrants, puts, calls, or
other rights of third persons, and restrictions, other than (i) those liens
arising under this Parent Pledge Agreement, (ii) restrictions on transferability
imposed by applicable state and Federal securities laws or which may
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arise as a result of the Company being subject to the Communications Act of
1934, as amended, and the rules and regulations of the FCC thereunder and (iii)
those liens arising under the Company Pledge Agreement dated as of February 20,
1996 between the Company and Banque Paribas, as Agent. The Company agrees to
warrant and defend title to and ownership of the Pledged Stock and the lien
created by this Parent Pledge Agreement against the claims of all Persons and
maintain and preserve such lien at all times during the term of this Parent
Pledge Agreement. Upon the delivery to the Administrative Agent of the Pledged
Stock the security interest in the Pledged Stock granted to the Administrative
Agent hereunder will constitute a perfected security interest therein superior
and prior to all Liens other than Liens permitted by Section 6.17 of the Credit
Agreement.
(d) OWNERSHIP OF PLEDGED STOCK. The Company is the holder of
record and the sole beneficial owner of 100% of the issued and outstanding
capital stock of JCAC and such shares of capital stock are described on Schedule
I hereto.
(e) TITLE AND POWER TO PLEDGE THE PLEDGED STOCK. The Company
has good and marketable title to the Pledged Stock and has all requisite rights,
power, and authority to execute, deliver and comply with the terms of this
Parent Pledge Agreement and to pledge and deliver the Collateral to the
Administrative Agent pursuant hereto. Except as provided in Section 5.3 of the
Credit Agreement, no material authorization, consent or approval of, and no
notice to or filing with, any person or government agency (other than as
specified in Section 6 hereof) is required in connection with the execution,
delivery and performance of this Parent Pledge Agreement which has not been
obtained.
4. COVENANTS. So long as any Obligations remain outstanding, the
Company covenants and agrees with the Agents, the Lenders and any Interest Rate
Hedge Providers as follows:
(a) PLEDGE AND ADDITIONAL STOCK. If the Company shall at any
time acquire any additional shares of the capital stock of any class of the
Pledged Stock of any Subsidiary of the Company or any option, warrant or other
right with respect thereto, whether such acquisi-
4
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tion shall be by purchase, exchange, reclassification, dividend, or otherwise,
the Company shall, to the extent doing so would not violate applicable law,
forthwith (and without the necessity for any request or demand by any Agent, any
Lender or any Interest Rate Hedge Provider) pledge and deliver the certificates
representing such shares to the Administrative Agent, in the same manner as
described in Section 2 hereof and shall promptly thereafter deliver to the
Administrative Agent a certificate (which shall be deemed to supplement Schedule
I attached hereto) executed by an Authorized Officer of the Company describing
such Pledged Stock and certifying that the same has been duly pledged with the
Administrative Agent hereunder. Any such additional shares shall constitute part
of the Pledged Stock. Nothing contained in this Section 4(a) shall be deemed to
permit any stock dividend, issuance of additional stock, warrants, rights or
options, reclassification, readjustment or other change in the capital structure
of any Subsidiary of the Company that is not expressly permitted in the Credit
Agreement.
(b) APPLICATIONS, APPROVALS AND CONSENTS. The Company will, at
its expense, promptly execute and deliver, or cause the execution and delivery
of, all applications, certificates, instruments, registration statements, and
all other documents and papers the Administrative Agent may reasonably request
in connection with the obtaining of any consent, approval, registration,
qualification, or authorization of the FCC or of any other Person necessary or
appropriate for the effective exercise of any rights under this Parent Pledge
Agreement. Without limiting the generality of the foregoing, the Company agrees
that in the event the Administrative Agent on behalf of the Agents, the Lenders
and any Interest Rate Hedge Providers shall exercise its right to sell,
transfer, or otherwise dispose of or take any other action in connection with
any of the Collateral pursuant to this Parent Pledge Agreement, the Company
shall execute and deliver all applications, certificates, and other documents
the Administrative Agent may reasonably request and shall otherwise promptly,
fully, and diligently cooperate with the Administrative Agent and any other
necessary Persons, in making any application for the prior consent or approval
of the FCC or any other Person to the exercise by the Agents, the Lenders or any
Interest Rate Hedge Providers of any of such rights relating to all or any part
of the Collateral. Further-
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<PAGE>
more, because the Company agrees that the Agents', the Lenders' and each
Interest Rate Hedge Provider's remedy at law for failure of the Company to
comply with the provisions of this Section 4(b) would be inadequate and that
such failure would not be adequately compensable in damages, the Company agrees
that the covenants of this Section 4(b) may be specifically enforced.
(c) SECURITY INTEREST AND LIEN. The Company will preserve,
warrant, and defend title to and ownership of the Pledged Stock and the lien
created hereby in the Collateral against the claims of all Persons whomsoever
and maintain and preserve such lien at all times during the term of this Parent
Pledge Agreement; will not at any time sell, assign, transfer or otherwise
dispose of its right, title and interest in and to any of the Collateral; will
not at any time, directly or indirectly, create, assume, or suffer to exist any
lien, warrant, put, option, or other rights of third Persons and restrictions,
other than the liens created by this Parent Pledge Agreement, in and to the
Collateral or any part thereof; and will not do or suffer any matter or thing
whereby the lien created by this Parent Pledge Agreement in and to the
Collateral might or could be impaired.
(d) FURTHER ASSURANCES. The Company, at its expense, shall from
time to time execute and deliver to the Administrative Agent all such other
assignments, certificates, supplemental documents, and financing statements, and
shall do all other acts or things as the Administrative Agent may reasonably
request in order to more fully create, evidence, perfect, continue, and preserve
the priority of the lien herein created or to otherwise obtain the full benefits
of this Parent Pledge Agreement.
(e) INDEBTEDNESS; ETC. The Company will not permit any
Subsidiary of the Company to incur any Indebtedness or permit any Liens (other
than under the Collateral Documents) to exist in respect of any such
Subsidiary's assets except as permitted by the Credit Agreement.
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<PAGE>
5. RIGHTS OF THE COMPANY, THE AGENTS, THE LENDERS AND ANY INTEREST
RATE HEDGE PROVIDERS.
(a) EXERCISE OF STOCKHOLDER RIGHTS.
(i) Subject to the provisions of Section 6 hereof,
unless and until a Default shall occur and be continuing, the Company shall
be entitled to receive all cash dividends or other distributions on the
Pledged Stock (if and to the extent such dividends or distributions are
permitted by the terms of the Credit Agreement) except (A) distributions
made in capital stock on the Pledged Stock resulting from stock dividends
on or subdivision, combination, or reclassification of the outstanding
capital stock of any corporation or as a result of any merger,
consolidation, acquisition or other exchange of assets of any corporation;
and (B) all sums paid on any Pledged Stock upon liquidation or dissolution
or reduction of capital, repurchase, retirement, or redemption. All such
sums, dividends, distributions, proceeds, or property described in the
immediately preceding clauses (A) and (B) shall, if received by any Person
other than the Administrative Agent, be held in trust for the benefit of
the Agents, the Lenders and any Interest Rate Hedge Providers and shall
forthwith be delivered to the Administrative Agent for the benefit of the
Agents, the Lenders and any Interest Rate Hedge Providers (accompanied by
proper instruments or assignment and/or undated stock and/or bond powers
executed by the Company in accordance with the Administrative Agent's
instructions) to be held subject to the
7
<PAGE>
terms of this Parent Pledge Agreement. Upon the occurrence of a Default,
the Administrative Agent, for the benefit of the Agents, the Lenders and
any Interest Rate Hedge Providers, shall be entitled to receive all
payments of whatever kind made upon or with respect to any Collateral. The
relative rights of the Agents, the Lenders and any Interest Rate Hedge
Providers to receive such payments shall be in proportion to the relative
amounts of all Obligations owing to any Agent, any Lender and any Interest
Rate Hedge Provider and the aggregate amount of all Obligations then
outstanding.
(ii) Unless a Default has occurred and is continuing, the
Company shall have the sole and exclusive right to vote and give consents
with respect to all the Collateral and to consent to, ratify, or waive
notice of any and all meetings. Upon the occurrence and during the
continuance of a Default, subject to compliance with applicable law, the
Administrative Agent, on behalf of the Agents, the Lenders and any Interest
Rate Hedge Providers, shall have, subject to Section 6 hereof, the right
(A) to consent in advance to any vote proposed to be cast by the Company
with respect to any merger, consolidation, liquidation or reorganization of
any Subsidiary of the Company (but in no event with respect to any election
of directors) and, in connection therewith, to join in and become a party
to any plan of recapitalization, reorganization, or readjustment (whether
voluntary or involuntary) as shall
8
<PAGE>
seem desirable to the Administrative Agent, on behalf of the Agents, the
Lenders and any Interest Rate Hedge Providers, to protect or further their
interests in respect of the Collateral, (B) to deposit the Collateral under
any such plan, and (C) to make any exchange, substitution, cancellation, or
surrender of the Collateral required by any such plan and to take such
action with respect to the Collateral as may be required by any such plan
or for the accomplishment thereof; and no such disposition, exchange,
substitution, cancellation, or surrender shall be deemed to constitute a
release of the Collateral from the lien of this Parent Pledge Agreement.
(b) RIGHT OF SALE AFTER DEFAULT. Upon the occurrence and during
the continuance of a Default, subject to compliance with applicable law, the
Administrative Agent, on behalf of the Agents, the Lenders and any Interest Rate
Hedge Providers, may, subject to Section 6 hereof, sell, without recourse to
judicial proceedings, with the right to bid for and buy, the Collateral or any
part thereof, upon ten days' notice (which notice is agreed to be reasonable
notice for the purposes hereof) to the Company of the time and place of sale,
for cash, upon credit or for future delivery, at the Lenders' option and in the
Lenders' complete discretion in the case of a Default:
(i) At public sale, including a sale at any broker's
board or exchange;
(ii) At private sale in any commercially reasonable manner
which will not require the Collateral, or any part thereof, to be
registered in accordance with the Securities Act of 1933, as amended, or
the rules and regulations promulgated thereunder, or any other law or
regulation. Each
9
<PAGE>
of the Agents, the Lenders and the Interest Rate Hedge Providers are also
hereby authorized, but not obligated, to take such actions, give such
notices, obtain such consents, and do such other things as they may deem
required or appropriate in the event of sale or disposition of any of the
Collateral, and the Company agrees that neither any Agent, any Lender nor
any Interest Rate Hedge Provider shall be liable or accountable to the
Company for any discount allowed by reason of the fact that such Collateral
is sold in compliance with any applicable limitation or restriction of any
governmental regulatory authority or official. The Company understands that
the Administrative Agent, on behalf of the Agents, the Lenders and any
Interest Rate Hedge Providers, may in its discretion approach a restricted
number of potential purchasers and that a sale under such circumstances may
yield a lower price for the Collateral, or any portion thereof, than would
otherwise be obtainable if the same were registered and sold in the open
market. Any such private sale shall not by reason thereof be deemed not to
have been made in a commercially reasonable manner. In the event of any
such sale under the circumstances described in this Section 6(b)(ii),
neither the Administrative Agent nor any Lender shall incur any
responsibility or liability for selling the whole or any part of the
Collateral at a price which the Administrative Agent may deem reasonable
under the circumstances, notwithstanding the
10
<PAGE>
possibility that a substantially higher price might be realized if any
such sale were a public sale. The Company agrees that in the event the
Administrative Agent shall so sell the Collateral, or any portion thereof,
at such private sale or sales, the Agents, the Lenders and any Interest
Rate Hedge Providers shall have the right to rely upon the advice and
opinion of any Person who regularly deals in or evaluates stock of the
type constituting the Collateral as to the price obtainable in a
commercially reasonable manner upon such a private sale thereof.
In the case of any sale by the Administrative Agent on behalf of the
Agents, the Lenders and any Interest Rate Hedge Providers of the Collateral on
credit or for future delivery, the Collateral sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser, but
neither any Agent, any Lender nor any Interest Rate Hedge Provider shall incur
liability in case of failure of the purchaser to take up and pay for the
Collateral so sold.
In connection with the sale of any of the Collateral, the Agents and
the Lenders are authorized, but not obligated, to limit prospective purchasers
to the extent deemed necessary or desirable by the Agents and the Lenders to
render such sale exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws. In the event
that, in the opinion of the Agents and the Lenders, it is necessary or advisable
to have such securities registered under the provisions of such Act, or any
similar law relating to the registration of securities, the Company agrees, at
its own expense, to (i) execute and deliver all such instruments and documents,
and to do or cause to be done such other acts and things, as may be necessary
or, in the opinion of the Administrative Agent, advisable, to register such
securities under the provisions of such Act or any applicable similar law
relating to the registration of securities, and the
11
<PAGE>
Company will use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for such period as the
Administrative Agent shall reasonably request, and to make all amendments
thereof and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or desirable, all in conformity with the
requirements of such Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto; (ii) use its best efforts to qualify
such securities under state "blue sky" or securities laws, all as reasonably
requested by the Administrative Agent; (iii) at the request of the
Administrative Agent, indemnify and hold harmless the Lenders, the Agents, any
Interest Rate Hedge Providers, any underwriters, employees, officers, agents,
attorneys and accountants (collectively, the "Indemnified Parties") from and
against any loss, liability, claim, damage, and expense (including, without
limitation, reasonable fees of counsel incurred in connection therewith) under
such Act or otherwise, insofar as such loss, liability, claim, damage, or
expense arises out of or is based upon any untrue statement or alleged untrue
statement of any material fact furnished by the Company contained in any
registration statement under which such securities were registered under such
Act or other securities laws, any preliminary prospectus or final prospectus
contained therein, or arise out of or are based upon any omission or alleged
omission by the Company to state therein a material fact required to be stated
or necessary to make the statements therein not misleading, such indemnification
to remain operative regardless of any investigation made by or on behalf of any
Indemnified Party; PROVIDED, HOWEVER, that the Company shall not be liable in
any case to the extent that any such loss, liability, claim, damage, or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or an omission or an alleged omission made in reliance upon and in conformity
with written information furnished to the Company by an Indemnified Party
specifically for use in such registration statement or preliminary or final
prospectus; (iv) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of such Act; and (v) do or cause to be done all such
other acts and things as may be necessary to make such sale of the Collateral or
any part
12
<PAGE>
thereof valid and binding and in compliance with applicable law.
(c) OTHER RIGHTS AFTER A DEFAULT. Subject to Section 6 hereof,
upon the occurrence and during the continuance of a Default, the Administrative
Agent, on behalf of the Agents, the Lenders and any Interest Rate Hedge
Providers, may exercise any and all rights available to secured parties under
the Uniform Commercial Code as enacted in the State of New York or other
applicable jurisdiction, as amended, in addition to any and all other rights
afforded at law, in equity, or otherwise.
(d) APPLICATION OF PROCEEDS. The Administrative Agent shall
apply the proceeds of the Collateral, including the proceeds of any sales or
other disposition of the Collateral, or any part thereof, under this Section 5,
in the following order unless a court of competent jurisdiction shall otherwise
direct:
(i) FIRST, to payment of all reasonable costs and
expenses of each Agent incurred in connection with the collection and
enforcement of the Obligations or of the security interest granted pursuant
to this Parent Pledge Agreement;
(ii) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other
than principal), pro rata amongst each Lender and each Agent in accordance
with the proportion which the accrued interest, fees and other amounts
(other than principal) constituting Obligations owing to each such Lender
or Agent bears to the aggregate amount of accrued interest, fees and other
amounts (other than principal) constituting Obligations owing to all of the
Lenders and the Agents;
13
<PAGE>
(iii) THIRD, to payment of the principal of the Obligations
owing to any Lender or any Interest Rate Hedge Provider, pro rata amongst
each of the Lenders and each of the Interest Rate Hedge Providers in
accordance with the proportion that the principal of the Obligations owing
to each such Lender or Interest Rate Hedge Provider bears to the aggregate
amount of principal of the Obligations owing to all of the Lenders and any
Interest Rate Hedge Providers; and
(iv) FOURTH, the balance, if any, after all of the
Obligations have been satisfied, shall be remitted to the Company.
(e) GOVERNANCE. All rights and remedies available to the
Agents, the Lenders and the Interest Rate Hedge Providers with respect to the
grant, foreclosure and enforcement of the security interest and lien granted
hereby and with respect to any action permitted hereunder may be exercised
solely by the Administrative Agent acting with the concurrence of the Required
Lenders.
6. CONTROL; LIMITATION OF RIGHTS.
(a) Notwithstanding anything herein to the contrary, this Parent
Pledge Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby (i) do not and will not constitute, create, or have the
effect of constituting or creating, directly or indirectly, actual or practical
ownership of any Subsidiary of the Company by the Agents, the Lenders or any
Interest Rate Hedge Providers, or control, affirmative or negative, direct or
indirect, by the Agents, the Lenders or any Interest Rate Hedge Providers over
the management or any other aspect of the operation of any Subsidiary of the
Company, which ownership and control remain exclusively and at all times in such
Subsidiary and the Company, and (ii) do not and will not constitute the
transfer, assignment, or disposition in any manner, voluntarily or
involuntarily, directly or indirectly, of any license at any time issued by the
FCC to any Subsid-
14
<PAGE>
iary of the Company ("License"), or the transfer of control of any such
Subsidiary within the meaning of Section 310 of the Communications Act of 1934,
as amended.
(b) Notwithstanding any other provision of this Parent Pledge
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by the
Agents, the Lenders and the Interest Rate Hedge Providers hereunder which would
affect the operational, voting, or other control of any Subsidiary of the
Company, shall be pursuant to Section 310 of the Communications Act of 1934, as
amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 6(e) hereof, if a Default shall have
occurred and be continuing, the Company shall take any action which the
Administrative Agent, on behalf of the Agents, the Lenders and any Interest Rate
Hedge Providers, may reasonably request in order to transfer and assign to the
Administrative Agent, or to such one or more third parties as the Administrative
Agent may designate, or to a combination of the foregoing, each License. To
enforce the provisions of this Section 6, the Administrative Agent is empowered
to request the appointment of a receiver from any court of competent
jurisdiction. Such receiver shall be instructed to seek from the FCC an
involuntary transfer of control of each such License for the purpose of seeking
a bona fide purchaser to whom control will ultimately be transferred. The
Company hereby agrees to authorize such an involuntary transfer of control upon
the request of the receiver so appointed and, if the Company shall refuse to
authorize the transfer, the Company's approval may be required by the court.
Upon the occurrence and continuance of a Default, the Company shall further use
its best efforts to assist in obtaining approval of the FCC, if required, for
any action or transactions contemplated by this Parent Pledge Agreement
including, without limitation, the preparation, execution and filing with the
FCC of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any License or transfer of control necessary or
appro-
15
<PAGE>
priate under the FCC's rules and regulations for approval of the transfer or
assignment of any portion of the Collateral, together with any License.
(d) The Company acknowledges that the assignment or transfer of
each License is integral to the Agents', the Lenders' and any Interest Rate
Hedge Provider's realization of the value of the Collateral, that there is no
adequate remedy at law for failure by the Company to comply with the provisions
of this Section 6 and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section 6
may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Parent Pledge Agreement or in any other Loan Document, neither any Agent, any
Lender nor any Interest Rate Hedge Provider shall, without first obtaining the
approval of the FCC, take any action pursuant to this Parent Pledge Agreement
which would constitute or result in any assignment of a License or any change of
control of any License or any Subsidiary of the Company if such assignment or
change in control would require, under then existing law (including the written
rules and regulations promulgated by the FCC), the prior approval of the FCC.
7. MISCELLANEOUS.
(a) TERM. This Parent Pledge Agreement and the lien arising
hereunder (i) shall become effective as of the date hereof upon the execution
hereof, and (ii) shall continue in force until no Obligations to the Agents, the
Lenders or any Interest Rate Hedge Providers shall be outstanding and the
Commitments shall have been terminated. If no Obligations remain outstanding and
the Commitments have been terminated, the Administrative Agent, at the request
and sole expense of the Company, shall execute and deliver such documents and
instruments as may be necessary to evidence such termination and release.
(b) RELEASES; PARTIAL RELEASES. Any cash dividends received by
the Company in accordance with the terms of Section 5(a)(i) hereof, shall be
deemed released from the lien of this Parent Pledge Agreement and shall be held
by the Company (or any transferee of the Company)
16
<PAGE>
free and clear of the lien created by this Parent Pledge Agreement. Upon
termination of this Parent Pledge Agreement in accordance with the provisions of
Section 7(a) hereof, the Agents, the Lenders and any Interest Rate Hedge
Providers shall, at the Company's request and expense and subject to the
foregoing sentence, execute such release as the Company may reasonably request,
in form and upon terms acceptable to the Agents, the Lenders and any Interest
Rate Hedge Providers in all respects, and shall deliver, without any
representations, warranties or recourse of any kind whatsoever (other than the
representation and warranty that such property is free and clear of Liens
created by the Agents, the Lenders or any Interest Rate Hedge Providers), all
certificates representing the Pledged Stock and other property held in respect
thereof hereunder which is in the Administrative Agent's possession, together
with all stock powers or other instruments of transfer reasonably required to
effect delivery to the Company.
(c) WAIVERS. Except to the extent expressly otherwise provided
herein or in any Loan Document, the Company waives, to the extent permitted by
applicable law, (i) any right to require any Agent, any Lender or any Interest
Rate Hedge Provider to proceed against any other person, to exhaust their rights
in any other collateral, or to pursue any other right which either any Agent,
any Lender or any Interest Rate Hedge Provider may have, (ii) with respect to
the Obligations, presentment and demand for payment, protest, notice of protest
and non-payment, and notice of the intention to accelerate, and (iii) all rights
of marshalling in respect of any and all of the Collateral. The Company
expressly waives any and all defenses now or hereafter arising or asserted by
reason of (a) any disability or other defense of any of the Company or any other
Person with respect to the Obligations, (b) the unenforceability or invalidity
of any security or guaranty for the Obligations or the lack of perfection or
continuing perfection or failure of priority of any security for the
Obligations, (c) the cessation for any cause whatsoever of the liability of any
of the Company or any other Person (other than by reason of the full payment and
performance of all Obligations), (d) any failure of the Administrative Agent to
marshal assets in favor of any Person, (e) any failure of the Administrative
Agent to give notice of sale or other disposition to any Person or any defect in
17
<PAGE>
any notice that may be given in connection with any sale or disposition, (f) any
act or omission of any Agent, any Lender or any Interest Rate Hedge Provider or
others that directly or indirectly results in or aids the discharge or release
of any of the Company or any other Person of the Obligations or any other
security or guaranty therefor by operation of Law or otherwise, (g) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligations or (h) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company, whether or
not the Company shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (h) of this paragraph. The
Company expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or
demands of any kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this Parent Pledge Agreement or of the existence,
creation or incurring of new or additional Obligations.
(d) FINANCING STATEMENT. The Administrative Agent, on behalf of
the Agents, the Lenders and any Interest Rate Hedge Providers, shall be entitled
at any time to file this Parent Pledge Agreement or a carbon, photographic, or
other reproduction of this Parent Pledge Agreement, as a financing statement,
but the failure of the Administrative Agent to do so shall not impair the
validity or enforceability of this Parent Pledge Agreement.
(e) AMENDMENTS. This Parent Pledge Agreement may be amended
only by an instrument in writing executed jointly by the Company and the
Administrative Agent, with the consent of the Required Lenders, and supplemented
only by documents delivered or to be delivered in accordance with the express
terms hereof, provided, however, that any release of all or any substantial
portion of the Collateral from the lien created hereby shall be effective only
if approved in accordance with Section 8.2 of the Credit Agreement.
18
<PAGE>
(f) GOVERNING LAW. THIS PARENT PLEDGE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
(g) PARTIES BOUND; ASSIGNMENT. This Parent Pledge Agreement
shall be binding on the Company and its successors and assigns and shall inure
to the benefit of the Agents, the Lenders and any Interest Rate Hedge Providers
and their respective successors and assigns.
(h) NOTICES. Any notice required or permitted to be given under
this Parent Pledge Agreement shall be in writing and may be, and shall be
deemed, given, if mailed, three days after the date when deposited in the United
States mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to the Company (with a copy to Sheli Z.
Rosenberg, Esq., Rosenberg & Liebentritt, Two North Riverside Plaza, Suite 600,
Chicago, Illinois 60606, provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice), to the
Administrative Agent at the address indicated below its signature hereto, to the
other Agents and the Lenders at the addresses indicated below their respective
signatures to the Credit Agreement and to any Interest Rate Hedge Providers at
the addresses provided to the Company and the Administrative Agent in writing by
such Interest Rate Hedge Providers. Each of the Company, the Agents, the Lenders
and any Interest Rate Hedge Providers may change the address for service of
notice upon it by a notice in writing to the other parties hereto.
(i) WAIVER OF SUBROGATION. The Company hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
JCAC or any other Person that arise from the existence, payment, performance or
enforcement of the Company's obligations under this Parent Pledge Agreement or
any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
of any Agent, any Lender or any Interest Rate Hedge Provider against JCAC or any
other Person or any collateral which the Administrative Agent
19
<PAGE>
now has or hereafter acquires, whether or not such claim, remedy or right arises
in equity, or under contract, statute or common law, including the right to take
or receive from JCAC or any other Person, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account of
such claim or other rights. If any amount shall be paid to the Company in
violation of the preceding sentence and the Obligations shall not have been paid
in cash in full and the Commitments have not been terminated, such amount shall
be deemed to have been paid to the Company for the benefit of, and held in trust
for, the Agents, the Lenders and any Interest Rate Hedge Providers, and shall
forthwith be paid to the Administrative Agent to be credited and applied upon
the Obligations, whether matured or unmatured. The Company acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and the Rate Hedging Agreements and that
the waiver set forth in this Section is knowingly made in contemplation of such
benefits.
(j) COUNTERPARTS. This Parent Pledge Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Parent Pledge
Agreement by signing any such counterpart. This Parent Pledge Agreement shall be
effective when it has been executed by the Company and the Administrative Agent.
(k) LOAN DOCUMENT. This Parent Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
(l) SECTION CAPTIONS. Section captions used in this Parent
Pledge Agreement are for convenience of reference only and shall not affect the
construction of this Parent Pledge Agreement.
(m) SEVERABILITY. Wherever possible each provision of this
Parent Pledge Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Parent Pledge
Agreement shall be prohibited by or invalid under
20
<PAGE>
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Parent Pledge Agreement.
(n) WAIVER OF JURY TRIAL. EACH OF THE ADMINISTRATIVE AGENT AND
THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS PARENT PLEDGE AGREEMENT. THE COMPANY
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENTS AND THE LENDERS ENTERING INTO THE CREDIT AGREEMENT AND ANY INTEREST RATE
HEDGE PROVIDERS ENTERING INTO ANY RATE HEDGING AGREEMENTS.
8. THE ADMINISTRATIVE AGENT. Chemical Bank has been appointed
Administrative Agent of the Agents, the Lenders and any Interest Rate Hedge
Providers hereunder pursuant to Article X of the Credit Agreement, and the
Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such
Article X. Any successor Administrative Agent appointed pursuant to Article X of
the Credit Agreement shall be entitled to all the rights, interests and benefits
of the Administrative Agent hereunder.
21
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Parent Pledge
Agreement as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:/s/ R. Christopher Weber
-------------------------------------
Title:Sr. Vice President
----------------------------------
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
CHEMICAL BANK,
as Administrative Agent
By:/s/ C.C. Wardell
-------------------------------------
Title:Managing Director
----------------------------------
270 Park Avenue
New York, New York 10017
<PAGE>
Schedule I
List of Pledged Securities
100 shares of common stock of JCAC, Inc., a Florida corporation
<PAGE>
EXHIBIT 5.1
GRAYDON, HEAD & RITCHEY LETTERHEAD
June 24, 1996
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Re: Issuance of 21,618,990.5 Common Stock Purchase Warrants of
Jacor Communications, Inc. Pursuant to Registration Statement on Form S-4
Filed with the Securities and Exchange Commission
-------------------------------------------------------
Gentlemen:
We have acted as counsel to Jacor Communications, Inc. ("Company"), an Ohio
corporation, in connection with the issuance of 21,618,990.5 Common Stock
Purchase Warrants of the Company in connection with the merger of Citicasters
Inc. with and into the Company as set forth in the Form S-4 Registration
Statement, as amended, filed by the Company with the Securities and Exchange
Commission.
As counsel for the Company we have made such legal and factual examinations
and inquiries as we deem advisable for the purpose of rendering this opinion. In
addition, we have examined such documents and materials, including the Articles
of Incorporation, Bylaws, and other corporate records of the Company, as we have
deemed necessary for the purpose of this opinion.
On the basis of the foregoing, we express the following opinion:
(i) The 21,618,990.5 Common Stock Purchase Warrants being issued by the
Company are currently validly authorized and, when issued as contemplated by
the Registration Statement, as amended, will be legally issued Common Stock
Purchase Warrants of the Company; and
(ii) The 4,400,000 Shares of Common Stock of the Company issuable upon
the exercise of the Common Stock Purchase Warrants are currently validly
authorized and, when issued as contemplated by the Registration Statement,
as amended, will be legally issued, fully paid and non-
assessable shares of Common Stock of the Company.
We hereby consent to the filing of this opinion as part of the
above-referenced Registration Statement and amendments thereto and to the
reference to our firm in the Proxy Statement/Information Statement/Prospectus
under the caption "Legal Matters."
Very truly yours,
GRAYDON, HEAD & RITCHEY
By /s/ Richard G. Schmalzl
-------------------------------------
Richard G. Schmalzl
<PAGE>
EXHIBIT 8.1
JONES, DAY, REAVIS & POGUE LETTERHEAD
June 24, 1996
Citicasters Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Re: Proxy Statement/Prospectus of Jacor
Communications, Inc. and Information
Statement of Citicasters Inc.
-------------------------------------------
Dear Sirs:
We have acted as counsel to Citicasters Inc. in connection with the
Registration Statement on Form S-4, to which this opinion appears as Exhibit
8.1, which includes the Proxy Statement/Prospectus of Jacor Communications, Inc.
and Information Statement of Citicasters Inc. Unless otherwise indicated, any
defined term used herein shall have the same meaning as in the Proxy Statement/
Information Statement/Prospectus. We hereby confirm that the statements
attributed to us in the Proxy Statement/Information Statement/Prospectus under
the heading "The Merger -- Certain Federal Income Tax Consequences" constitute
our opinion with respect to certain of the material federal income tax
consequences of the Merger.
We hereby consent to the filing with the Securities and Exchange Commission
of this opinion as an exhibit to the Registration Statement and to the
references to this firm in the Proxy Statement/ Information Statement/Prospectus
constituting part of the Registration Statement.
Very truly yours,
Jones, Day, Reavis & Pogue
<PAGE>
EXHIBIT 11
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED INCOME (LOSS) PER COMMON SHARE
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
FOR THE YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------- ----------------------
1995 1994 1993 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Income for primary and fully diluted computation:
Income applicable to common shares before
extraordinary loss............................ $1,841,555 $ 751,314
Extraordinary loss, net of income tax credit... (950,755)
---------- ----------
Income applicable to common shares............. $10,965,109 $7,851,516 $1,438,443 $ 890,780 $ 751,314
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Primary (1):
Weighted average common shares and dilutive
common stock equivalents:
Common stock outstanding..................... 18,907,900 19,572,652 13,163,264 18,183,381 19,597,789
Stock purchase warrants...................... 911,203 797,529 611,879 1,124,373 749,223
Stock options................................ 793,602 738,996 729,384 894,998 700,428
Contingently issuable common shares.......... 300,000 300,000 300,000 300,000
---------- ---------- ---------- ---------- ----------
20,912,705 21,409,177 14,504,527 20,502,752 21,347,440
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Primary income per common share:
Before extraordinary loss...................... $0.52 $0.37 $0.10 $0.09 $0.04
Net income..................................... $0.52 $0.37 $0.10 $0.04 $0.04
</TABLE>
- ------------
(1) Fully diluted earnings per share is not presented since it approximates
primary income per share.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Jacor Communications, Inc. on Form S-4 of our report dated February 12, 1996,
on our audits of the consolidated financial statements and financial statement
schedule of Jacor Communications, Inc. as of December 31, 1995 and 1994 and for
each of the three years in the period ended December 31, 1995, which report is
included in the Jacor Communications, Inc. Annual Report on Form 10-K for the
year ended December 31, 1995. We also consent to the reference to our firm under
the caption "Experts."
COOPERS & LYBRAND L.L.P.
Cincinnati, Ohio
June 18, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement on Form S-4 for the registration of 21,618,990.5 Common
Stock Purchase Warrants and 4,400,000 shares of Common Stock issuable upon
exercise of Warrants of Jacor Communications, Inc. and to the incorporation by
reference therein of our report dated February 23, 1996 with respect to the
consolidated financial statements and financial statement schedule of
Citicasters Inc. included in its Annual Report (Form 10K) for the year ended
December 31, 1995 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
June 21, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Jacor
Communications, Inc. of our report dated March 21, 1996 relating to the
consolidated financial statements of Noble Broadcast Group, Inc. (which report
includes an explanatory paragraph regarding Jacor Communications, Inc.'s
agreement to purchase Noble Broadcast Group, Inc.) which appears in Jacor
Communications, Inc.'s Forms S-3 (Nos. 333-01917, 333-02475 and 333-02495). We
also consent to the references to us under the headings "Experts" and "Selected
Historical Financial Data" in such Prospectus. However, it should be noted that
Price Waterhouse LLP has not prepared or certified such "Selected Historical
Financial Data."
PRICE WATERHOUSE LLP
San Diego, California
June 17, 1996
<PAGE>
VERSION 9
JACOR COMMUNICATIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS JULY 23, 1996
PROXY
The undersigned hereby appoints Randy Michaels, R. Christopher Weber and Jon
M. Berry, and each of them as Proxy Holders for the undersigned, with full
power of substitution, to appear and vote all of the shares of Jacor
Communications, Inc. which the undersigned is entitled to vote at the Annual
Meeting of Shareholders to be held in the Fifth Third Bank Theatre at the
Aronoff Center for the Arts, located at the corner of East Seventh Street and
Main Street, Cincinnati, Ohio on Tuesday, July 23, 1996 at 10:30 a.m., local
time, and at any adjournment thereof.
1. Proposal to reincorporate as a Delaware corporation.
2. Approval of issuance of Common Stock Purchase Warrants, and the underlying
shares of Common Stock, to shareholders of Citicasters Inc.
3. Election of seven Directors for a one year term. Nominees: John W.
Alexander, Rod F. Dammeyer, F. Philip Handy, Marc Lasry, Robert L.
Lawrence, Randy Michaels and Sheli Z. Rosenberg.
4. To act in accordance with their best judgment on any other business which
may properly come before the meeting.
(change of address)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(If you have written in the above space, please mark the corresponding
box on the reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORSO RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
/X/ PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR AGAINST ABSTAIN
1. Proposal to reincorporate as / / / / / /
a Delaware corporation.
2. Approval of Issuance of Common / / / / / /
Stock Purchase Warrants, and the
underlying shares of Common Stock,
to shareholders of Citicasters Inc.
3. Election of Directors FOR WITHHELD
(SEE REVERSE) / / / /
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
4. To act in accordance with their best
judgment on any other business which
may properly come before the meeting.
Change
of / /
Address
Attend / /
Meeting
SIGNATURE(S) DATE
------------------------------------- ------------------------
SIGNATURE(S) DATE
------------------------------------- ------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
<PAGE>
EXHIBIT 99.4
JACOR WARRANT VALUATION
<TABLE>
<CAPTION>
IMPLIED VOLATILITIES
----------------------------------------------------------------
STRIKE PRICE 20% 25% 30% 35% 40% 45%
- ---------------------------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$25.00.................................. $ 3.82 $ 4.66 $ 5.49 $ 6.31 $ 7.10 $ 7.88
$26.00.................................. $ 3.49 $ 4.35 $ 5.20 $ 6.03 $ 6.84 $ 7.64
$27.00.................................. $ 3.19 $ 4.06 $ 4.92 $ 5.77 $ 6.60 $ 7.41
$28.00.................................. $ 2.91 $ 3.79 $ 4.67 $ 5.52 $ 6.36 $ 7.18
$29.00.................................. $ 2.66 $ 3.54 $ 4.42 $ 5.29 $ 6.14 $ 6.97
$30.00.................................. $ 2.42 $ 3.31 $ 4.19 $ 5.06 $ 5.92 $ 6.77
$31.00.................................. $ 2.21 $ 3.09 $ 3.97 $ 4.85 $ 5.72 $ 6.57
</TABLE>
Warrant Value $5.52
Warrants 4.40MM
Total $1.12/share
<PAGE>
CITICASTERS
VALUATION ANALYSIS
<TABLE>
<S> <C> <C> <C> <C>
Assumed Share Price $ 29.00 $ 29.50 $ 30.00 $ 30.50
PREMIUM TO CURRENT MARKET................................. 9.4% 11.3% 13.2% 15.1%
Diluted Shares Outstanding (1).......................... 21.6 21.6 21.6 21.6
Net Equity Value.......................................... $ 626.4 $ 637.2 $ 648.0 $ 658.8
--------- --------- --------- ---------
Plus: Total Debt (2)...................................... 152.4 152.4 152.4 152.4
--------- --------- --------- ---------
Total Enterprise Value.................................... 778.8 789.6 800.4 811.2
Less Other Assets:
NWCG Warrants at $4.00.................................. 20.0 20.0 20.0 20.0
Hanna Barbera Escrow.................................... 8.0 8.0 8.0 8.0
1996 Free Cash Flow..................................... 20.0 20.0 20.0 20.0
Interest on purchase price.............................. (14.3) (14.3) (14.3) (14.3)
Option Proceeds (3)..................................... 13.0 13.0 13.0 13.0
Stick Properties (4).................................... 42.0 42.0 42.0 42.0
Tax liability........................................... (50.0) (50.0) (50.0) (50.0)
Other liabilities....................................... (8.2) (8.2) (8.2) (8.2)
--------- --------- --------- ---------
Total Assets.............................................. 30.4 30.4 30.4 30.4
--------- --------- --------- ---------
Net Enterprise Value...................................... $ 748.4 $ 759.2 $ 770.0 $ 780.8
--------- --------- --------- ---------
--------- --------- --------- ---------
Broadcast Cash Flow (5)
Historical Radio Properties............................. $ 29.2 $ 29.2 $ 29.2 $ 29.2
Acquired Radio Properties............................... 2.5 2.5 2.5 2.5
Television Properties................................... 28.0 28.0 28.0 28.0
--------- --------- --------- ---------
Total Broadcast Cash Flow............................... 59.7 59.7 59.7 59.7
plus: Synergies....................................... 5.0 5.0 5.0 5.0
less: BCF of Stick Properties......................... (1.0) (1.0) (1.0) (1.0)
--------- --------- --------- ---------
Net BCF................................................... $ 63.7 $ 63.7 $ 63.7 $ 63.7
--------- --------- --------- ---------
--------- --------- --------- ---------
IMPLIED NET BCF MULTIPLES
1995 BCF Multiple....................................... 11.7x 11.9x 12.1x 12.3x
1996 BCF Multiple (6)................................... 11.3x 11.5x 11.6x 11.8x
GROSS BCF MULTIPLES (IGNORES STICK VALUES AND SYNERGIES)
1995 BCF Multiple....................................... 13.2x 13.4x 13.6x 13.8x
1996 BCF Multiple....................................... 11.6x 11.7x 11.9x 12.0x
</TABLE>
Notes:
- ------------------------
(1) Based on 20.0mm outstanding shares plus the exercise of 1.6mm options.
(2) Assumes that the radio acquisitions are financed by $24mm in debt.
(3) Citicasters estimate.
(4) Includes WWNK-Cincinnati, WSEG-Sacramento, WTBT-Tampa.
(5) Citicasters estimates.
(6) Assumes $68.35mm in 1996 BCF less $2.1mm of BCF from stick properties.
<PAGE>
CITICASTERS
SOURCES & USES OF FINANCING
<TABLE>
<S> <C> <C> <C>
TOTAL USES OF FINANCING
Jacor Existing Debt(1)..................................... $ 29.0
NOBLE PURCHASE
Net to Sellers........................................... $ 152.0
Fees and other........................................... 7.4
---------
Total Purchase Price................................... $ 159.4
CITICASTERS PURCHASE
Price paid per share..................................... $ 29.50
Fully Diluted Shares Outstanding......................... 21.6
---------
$ 637.2
Assumed debt(2)............................................ 152.4
Tax liability.............................................. 0.0
---------
Aggregate to Finance Citicasters......................... $ 789.6
Fees & expenses............................................ $ 25.7
---------
Total Financing Uses....................................... $ 1,003.7
---------
---------
TOTAL SOURCES OF FINANCING
<CAPTION>
DEBT AMOUNT DEBT/OCF
- ----------------------------------------------------------- --------- ---------------
<S> <C> <C> <C>
Bank....................................................... $ 440.0 4.0x
Existing Citicasters Fidelity Debt......................... 122.4 1.1x
New Public Debt/DLJ Bridge................................. 152.6 1.4x
--------- ---
$ 715.0 6.5x
<CAPTION>
EQUITY AMOUNT # JCOR SHARES PRICE
- ----------------------------------------------------------- --------- --------------- ---------
<S> <C> <C> <C>
New Zell/Chilmark Shares in Rights Offering................ 100.0 5.0 $ 20.00
Minority Shares in Rights Offering......................... 42.4 2.1 $ 20.00
Additional Equity Raised................................... 146.3 7.3 $ 20.00
--------- ---
$ 288.7 14.4
---------
Total Sources of Financing................................. $ 1,003.7
---------
---------
</TABLE>
Notes:
- ------------------------
(1) Net of warrant proceeds of $16 million.
(2) Includes $122.4mm of 9.75% Senior Subordinated debt due 2004.
<PAGE>
CITICASTERS
ASSUMPTIONS & OWNERSHIP
<TABLE>
<CAPTION>
ASSUMPTIONS 1995 1996
- ------------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Broadcast Cash Flow
Jacor.................................................................................... $ 31.0 $ 39.0
Citicasters(1)........................................................................... 59.7 68.4
Noble.................................................................................... 11.5 15.2
--------- ----------
Total BCF.................................................................................. 102.2 122.5
-- Corporate Expense................................................................... (6.0) (6.0)
--------- ----------
Operating Cash Flow........................................................................ $ 96.2 $ 116.5
--------- ----------
--------- ----------
Assumed OCF for financing purposes......................................................... $ 110.0
----------
----------
<CAPTION>
PRO FORMA SHARE OWNERSHIP SHARES OWNERSHIP
- ------------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Existing Public (incl. warrants)(2)........................................................ 6.7 19.5%
Zell/Chilmark (incl. warrants)(2).......................................................... 13.3 38.7%
New Zell/Chilmark Shares in Rights Offering................................................ 5.0 14.5%
Minority Shares in Rights Offering......................................................... 2.1 6.1%
Additional Equity Raised................................................................... 7.3 21.2%
--------- ----------
34.5 100.0%
--------- ----------
--------- ----------
</TABLE>
Notes:
- ------------------------
(1) Pre-stick.
(2) Financing sources includes warrant proceeds of approximately $16mm.
(3) Lindner and American Financial Group controlled 53.2% of Citicasters shares
at 11/1/95.
