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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: April 7, 1997
JACOR COMMUNICATIONS, INC.
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.)(IRS Employer Identification No.)
50 East RiverCenter Boulevard
12th Floor
Covington, KY 41017
(606) 655-2267
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Item 2. Acquisition or Disposition of Assets
On April 7, 1997, Jacor Communications, Inc. (the "Company"), Jacor
Communications Company ("JCC"), a wholly-owned subsidiary of the Company,
and PRN Holding Acquisition Corp. ("Buyer"), a wholly-owned subsidiary of
JCC, entered into an Agreement and Plan of Merger (the "Merger Agreement")
with Premiere Radio Networks, Inc. ( "Premiere"). Pursuant to the terms of
the Merger Agreement, Buyer will merge with and into Premiere (the "Merger")
such that each outstanding share of Premiere capital stock (other than
Premiere shares held by the Company, treasury shares and dissenting shares,
if any) will be converted into the right to acquire $13.50 in cash and
.1525424 shares (the "Exchange Ratio") of Jacor common stock. Premiere will
be the surviving company in the merger and will be a subsidiary of the
Company. The holders of more than 50% of the voting power of Premiere have
entered into a shareholders' agreement whereby they have agreed to vote their
Premiere shares in favor of the Merger.
The merger consideration is subject to adjustment in certain
circumstances. If the Merger is not consummated on or before July 31, 1997,
the cash portion of the merger consideration will accrue interest at the rate
of 7 1/2% per annum commencing August 1, 1997 (a maximum additional per share
amount of $.084375 payable in cash). Also, if the average closing price of
Jacor common stock for the 10 trading days immediately preceding the third
trading day prior to the closing of the Merger (the "Average Price") is less
than $26.50 or more than $32.50, then the Exchange Ratio will be adjusted by
multiplying .152524 by a fraction which has as its numerator either $26.50 or
$32.50 (whichever is applicable based upon which threshold is triggered) and
as its denominator the Average Price.
In order to facilitate the Merger, JCC has further agreed to purchase
all of the outstanding shares of common stock of Archon Communications, Inc.
("Archon"), the largest shareholder of Premiere capital stock. Such stock
purchase is to be consummated immediately prior to the closing of the Merger
and the consummation of the Merger is conditioned upon the closing of JCC's
purchase of the Archon stock. Archon's principal business activity has been
the ownership of Premiere common stock, Premiere Class A common stock and
options and warrants to acquire Premiere common stock, and the provision of
strategic consulting services to Premiere. Accordingly, for their shares in
Archon, the Archon shareholders will receive an amount of cash and Jacor
common stock calculated in the same manner as the merger consideration to be
received by the other Premiere stockholders, plus cash equal to Archon's cash
on hand (net of Archon liabilities) upon closing.
The cash and stock to be paid by the Company is valued at approximately
$18 per Premiere share of capital stock. The total consideration to be paid
by the Company, including payment for certain Premiere warrants and stock
options, is expected to aggregate approximately $185 million inclusive of the
amounts to be paid to the Archon shareholders as discussed in the preceding
paragraph. Net of Premiere's cash on hand and excess working capital to be
acquired by the Company in the Merger, the total net consideration to be paid
by the Company is expected to be approximately $165 million. The Company
anticipates that the sources of cash to be used for the cash portion of the
merger consideration will be obtained from a combination of one or more of
the
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following sources: credit facilities established with banks or other financial
institutions; JCC's working capital; monies that may be raised through public
and/or private offerings of the Company's equity and/or debt securities. As of
the date hereof, the Company has made no definitive decisions as to which of
these potential funding sources will be utilized.
The closing of the Merger is subject to certain conditions, including
expiration of the applicable Hart-Scott-Rodino waiting period, approval by the
Premiere stockholders and other customary closing conditions. The Merger
Agreement also provides that the closing must occur on or before August 31,
1997. The Company anticipates that the closing will occur during the summer of
1997.
Premiere is a public company that is a leading independent creator,
producer and distributor of comedy, entertainment, music radio programs,
research and other services. Premiere produces 52 syndicated programs and
services, and has more than 6,300 radio station affiliates under contract to
broadcast Premiere's programming and to use Premiere's services. Premiere
distributes its programs and services in exchange for commercial broadcast time.
A copy of the above mentioned Merger Agreement, Shareholders' Agreement
and Stock Purchase Agreement, and of the press release issued by the Company
announcing the execution of the Merger Agreement, are attached as exhibits
hereto. The summaries of such agreements set forth above are qualified in their
entirety by reference to each of those agreements, which are incorporated herein
by reference.
Item 5. Other Events
On April 7, 1997, the Company also announced that it had acquired the
assets of NSN Network Services, a leading provider of satellite and network
services for the radio broadcasting industry. The purchase price for such
assets was $11.0 million, of which $1.65 million was paid in Jacor common stock.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
The financial statements of Premiere Radio Networks, Inc. required to be
filed by the Company as part of this Form 8-K are contained in their entirety in
the 1934 Act reports previously filed by Premiere with the Securities and
Exchange Commission. The Company will file such financial statements as part of
its own 1934 Act reports by amendment to this Form 8-K no later than 60 days
hereafter.
(b) Pro Forma Financial Information.
The pro forma financial statements required to be filed by the Company as
part of this Form 8-K require substantial effort on behalf of the Company and
Premiere and have not yet been finalized on the date of this report. The
Company will file such pro
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forma financial statements by amendment to this Form 8-K no later than 60 days
hereafter.
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of April 7, 1997 among Jacor
Communications, Inc. (the "Company"), Jacor Communications Company ("JCC"),
PRN Holding Acquisition Corp. ("Buyer"), and Premiere Radio Networks, Inc.
(omitting schedules and exhibits not deemed material).
2.2 Shareholders' Agreement dated as of April 7, 1997 by and among the Company,
JCC, Archon Communications, Inc. ("Archon"), the stockholders of Archon and
certain shareholders of Premiere (omitting schedules and exhibits not
deemed material).
2.3 Stock Purchase Agreement dated as of April 7, 1997 among the Company, JCC,
Archon Communications Partners LLC and News America Holdings Incorporated
(omitting schedules and exhibits not deemed material).
99.1 Press Release dated April 7, 1997 (relating to Premiere).
99.2 Press Release dated April 7, 1997 (relating to NSN Network Services).
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JACOR COMMUNICATIONS, INC.
April 8, 1997 By: /s/ R. Christopher Weber
----------------------------------------
R. Christopher Weber, Senior Vice
President and Chief Financial Officer
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JACOR COMMUNICATIONS, INC.,
JACOR COMMUNICATIONS COMPANY,
PRN HOLDING ACQUISITION CORP.
AND
PREMIERE RADIO NETWORKS, INC.
DATED AS OF APRIL 7, 1997
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of April 7,
1997, among Jacor Communications, Inc., a Delaware corporation ("Jacor"), Jacor
Communications Company ("Communications"), a Florida corporation and a wholly
owned subsidiary of Jacor, PRN Holding Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Communications ("Acquisition Corp."), and
Premiere Radio Networks, Inc., a Delaware corporation ("Premiere").
RECITALS
WHEREAS, the respective Boards of Directors of Jacor, Communications,
Acquisition Corp. and Premiere have determined that a business combination
between Jacor, Communications, Acquisition Corp. and Premiere is in the best
interests of their respective companies and stockholders;
WHEREAS, Jacor, Communications, Acquisition Corp. and Premiere desire to
make certain representations, warranties, covenants and agreements in connection
with the transactions contemplated hereby;
WHEREAS, concurrently with the execution hereof, in order to induce Jacor
to enter into this Agreement, Jacor and Communications are entering into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with the stockholders of
Archon Communications, Inc. ("Archon") providing for the purchase immediately
prior to the Effective Time (as defined below) by Communications of all of the
outstanding capital stock of Archon upon the terms and conditions specified
therein; and
WHEREAS, concurrently with the execution hereof, Archon and certain
executive officers of Premiere (collectively, the "Consenting Stockholders")
beneficially owning shares of voting stock of Premiere representing not less
than a majority of the voting power of the shares of voting stock of Premiere
entitled to vote on the Merger (as defined below) are entering into a
Shareholders' Agreement with Jacor in which they agree with Jacor to deliver to
Premiere: (i) concurrently with the execution and delivery of this Agreement,
consents adopting and approving this Agreement with respect to all outstanding
shares of voting stock of Premiere of which they are record owners, and
(ii) with respect to all outstanding shares of voting stock of Premiere of which
they are beneficial owners but not record owners, as promptly as practicable and
in any event within 15 business days after the execution of this Agreement,
consents adopting and approving this Agreement.
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, Jacor, Communications,
Acquisition Corp. and Premiere hereby agree as follows:
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ARTICLE 1
THE MERGER; CLOSING; EFFECTIVE TIME
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), Acquisition Corp.
shall be merged with and into Premiere in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL"), and the
separate corporate existence of Acquisition Corp. shall thereupon cease (the
"Merger"). Following the Merger, Premiere shall continue as the surviving
corporation (sometimes hereinafter referred to as the "Surviving Corporation")
and shall be a Subsidiary (as defined below) of Communications.
(b) At the Effective Time, the corporate existence of Premiere, 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
DGCL.
1.2 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603, at 10:00 a.m., local
time, on the third business day immediately following the date on which the last
of the conditions specified in Sections 7.1(a), 7.1(c), 7.1(d), 7.1(e), 7.3(d),
7.3(e), 7.3(g) and 7.3(h) is satisfied or waived in accordance herewith, or at
such other date, time and place as Jacor and Premiere may agree in writing. The
date on which the Closing occurs is hereinafter referred to as the "Closing
Date".
1.3 EFFECTIVE TIME. At or as promptly as practicable after the Closing,
the parties hereto shall cause a certificate of merger (the "Certificate of
Merger"), in appropriate form and executed in accordance with the relevant
provisions of the DGCL, to be filed with the Secretary of State of the State of
Delaware as provided in the DGCL. 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 DGCL. The time and date at which the Merger
becomes effective is herein referred to as the "Effective Time."
ARTICLE 2
GOVERNING DOCUMENTS, DIRECTORS AND OFFICERS
OF SURVIVING ENTITIES
2.1 CERTIFICATE OF INCORPORATION. At the Effective Time and without any
further action on the part of Acquisition Corp. or Premiere, the certificate of
incorporation of Premiere, as in effect immediately prior to the Effective Time,
shall become the certificate of incorporation of the Surviving Corporation until
thereafter amended as provided therein and under applicable law.
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2.2 BY-LAWS. At the Effective Time and without any further action on the
part of Acquisition Corp. or Premiere, the by-laws of Acquisition Corp., 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 as provided in the certificate of incorporation of the Surviving
Corporation and under applicable law.
2.3 DIRECTORS AND OFFICERS. The directors of Acquisition Corp. at the
Effective Time shall, from and after the Effective Time, be the directors of the
Surviving Corporation until their respective successors shall have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's certificate of
incorporation and by-laws. The officers of Premiere at the Effective Time
shall, from and after the Effective Time, be the officers of the Surviving
Corporation until their respective successors shall have been duly appointed or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's by-laws.
ARTICLE 3
CONVERSION OF SHARES; DISSENTING SHARES
3.1 CONVERSION OF SHARES. (a) At the Effective Time, each of the shares
of Common Stock, par value $0.01 per share (the "Common Stock"), and
Class A Common Stock, par value $0.01 per share (the "Class A Common
Stock" and, together with the Common Stock, the "Premiere Shares") of
Premiere issued and outstanding immediately prior to the Effective
Time (other than (i) Premiere Shares held by Jacor or any direct or
indirect Subsidiary of Premiere or Jacor, including, as of the
Effective Time, Archon (ii) Premiere Shares in the treasury of
Premiere or (iii) Dissenting Shares (as defined below) (collectively,
the "Excluded Shares")) 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, without interest (except as otherwise
provided herein) (i) $13.50 in cash plus, in the event the Closing
does not occur on or prior to July 31, 1997, for each full calendar
month ending prior to the Closing, commencing with August, 1997, an
additional amount of $.084375 in cash, provided that such additional
amount shall be prorated through and including the Closing Date for a
partial month on the basis of a 30-day month (the "Cash Merger
Consideration") and (ii) a fraction of a share of common stock, no par
value, of Jacor ("Jacor Shares") equal to 0.25 multiplied by the
Exchange Ratio (as defined below) (the "Stock Merger Consideration"
and, together with the Cash Merger Consideration, the "Merger
Consideration"). The Exchange Ratio shall be .61016949 as long as the
Jacor Closing Price (as defined below) is equal to or greater than
$26.50 per share and equal to or less than $32.50 per share. If the
Jacor Closing Price is less than $26.50 per share, the Exchange Ratio
shall be .61016949 multiplied by a fraction the numerator of which is
$26.50 and the denominator of which is the
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Jacor Closing Price. If the Jacor Closing Price is greater than
$32.50 per share, the Exchange Ratio shall be .61016949 multiplied by
a fraction the numerator of which is $32.50 and the denominator of
which is the Jacor Closing Price. Notwithstanding the foregoing three
sentences: (i) in the event that subsequent to the date hereof and
prior to the Effective Time Jacor shall pay a dividend in Jacor Shares
or other equity securities of Jacor, subdivide the Jacor Shares into a
larger number of shares (it being understood that a sale or issuance
of Jacor Shares shall not constitute such a subdivision) or combine
the Jacor Shares into a smaller number of shares, the Exchange Ratio,
the $32.50 ceiling price for the adjustment of the Exchange Ratio and
the $26.50 floor price for the adjustment of the Exchange Ratio shall
be proportionately adjusted; and (ii) in the event that subsequent to
the date hereof and prior to the Effective Time, Jacor pays an
extraordinary cash dividend and the Jacor Closing Price is greater
than or equal to $26.50 per share and less than or equal to $32.50 per
share, the Exchange Ratio shall be adjusted so that the value of the
Stock Merger Consideration is the same as it would have been if such
an extraordinary cash dividend had not been paid.
The Jacor Closing Price shall be equal to the average per share closing
trade price of Jacor Shares as quoted through the Nasdaq Stock Market for the
ten Nasdaq Stock Market trading days immediately preceding the date which is
three Nasdaq Stock market trading days before the Closing Date.
(b) At the Effective Time, all of the Premiere Shares issued and
outstanding immediately prior to the Effective Time (other than the Excluded
Shares), by virtue of the Merger and without any action on the part of the
holders thereof, shall no longer be outstanding and shall be canceled and
retired and shall cease to exist, and each registered holder of any such
Premiere Shares shall thereafter cease to have any rights with respect to such
Premiere Shares, except that each holder (other than holders of Excluded Shares)
will have the right to receive, without interest, the Merger Consideration for
such Premiere Shares upon the surrender of the certificate or certificates, if
any, representing such Premiere Shares in accordance with Section 3.2.
(c) At the Effective Time, by virtue of the Merger and without any action
on the part of the holders thereof, each Premiere Share issued and outstanding
immediately prior to the Effective Time and owned by a direct or indirect
Subsidiary of Premiere, or held in the treasury of Premiere, immediately prior
to the Effective Time, shall no longer be outstanding, shall be canceled without
payment of any consideration therefor and shall cease to exist, and each
registered holder thereof shall thereafter cease to have any rights with respect
to such Premiere Shares.
(d) At the Effective Time, each Premiere Share held by Jacor or any of its
direct or indirect Subsidiaries (including Archon) shall not be converted and
shall remain issued and outstanding shares of the Surviving Corporation.
(e) At the Effective Time, the shares of common stock of Acquisition Corp.
issued
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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 a number of fully-paid and non-assessable shares of Common Stock
and Class A Common Stock of the Surviving Corporation equal to the number of
shares of Common Stock and Class A Common Stock outstanding (excluding Excluded
Shares) immediately prior to the Effective Time.
(f) All calculations hereunder shall be carried out to the eighth decimal
place.
3.2 SURRENDER AND PAYMENT. (a) Prior to the Effective Time, Jacor shall
appoint an agent (the "Exchange Agent") for the purpose of exchanging
certificates, if any, representing Premiere Shares for the Merger Consideration.
At the Effective Time, Jacor will deposit with the Exchange Agent certificates
representing the aggregate Stock Merger Consideration and Cash Merger
Consideration to be paid in respect of the Premiere Shares. Promptly after the
Effective Time, Jacor shall send, or shall cause the Exchange Agent to send, to
each holder of Premiere Shares at the Effective Time a form of letter of
transmittal for use in such exchange (which form shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates, if any, representing Premiere Shares to the
Exchange Agent).
(b) Each holder of Premiere Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent of the
certificate or certificates, if any, representing such Premiere Shares, together
with a properly completed letter of transmittal covering such Premiere Shares,
will be entitled to receive the Merger Consideration payable in respect of such
Premiere Shares. Until so surrendered, each such certificate shall, after the
Effective Time, represent for all purposes only the right to receive such Merger
Consideration.
(c) If any portion of the Merger Consideration is to be paid to a person
other than the registered holder of the Premiere Shares represented by the
certificate or certificates, if any, surrendered in exchange therefor, it shall
be a condition to such payment that the certificate or certificates, if any, so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
person other than the registered holder of such Premiere Shares or establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) After the Effective Time, there shall be no further registration of
transfers of Premiere Shares. If, after the Effective Time, certificates
representing Premiere Shares are presented to the Surviving Corporation or,
subject to the provisions of Section 3.2(e), the Exchange Agent, they shall be
canceled and exchanged for the Merger Consideration in accordance with the
procedures set forth in this Article Three.
(e) Any portion of the Merger Consideration deposited with the Exchange
Agent pursuant to Section 3.2(a), and any cash payment for a fractional Jacor
Share made pursuant to Section 3.3, that remains unclaimed by the holders of
Premiere
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Shares entitled thereto twelve months after the Effective Time shall be returned
by the Exchange Agent to Jacor or an Affiliate designated by Jacor, upon demand,
and any such holder who has not exchanged his Premiere Shares for the Merger
Consideration in accordance with this Article Three prior to that time shall
thereafter look only to Jacor for his claim for the Merger Consideration, any
cash in lieu of fractional Jacor Shares and any dividends or distributions with
respect to Jacor Shares paid after the Closing. Notwithstanding the foregoing,
Jacor shall not be liable to any holder of Premiere Shares for any amount paid
to a public authority pursuant to applicable abandoned property laws.
(f) No dividends or other distributions with respect to the Jacor Shares
constituting part of the Merger Consideration shall be paid to the holder of any
unsurrendered certificates representing Premiere Shares until such certificates
are surrendered as provided in this Section 3.2. Upon such surrender, there
shall be paid (to the extent due and not yet paid), without interest, to the
person in whose name the certificates representing the Jacor Shares into which
such Premiere Shares were converted are registered, any dividends and other
distributions in respect of Jacor Shares that are payable on a date subsequent
to, and the record date for which occurs after, the Effective Time.
3.3 FRACTIONAL SHARES. No certificates or scrip representing fractional
Jacor Shares shall be issued in the Merger, but in lieu thereof each holder of
Premiere Shares otherwise entitled to a fractional Jacor Share shall be entitled
to receive, from the Exchange Agent in accordance with the provisions of this
Section 3.3, a cash payment in lieu of such fractional Jacor Share representing
the value of such fraction, which for this purpose shall be calculated by
multiplying such fraction by the Jacor Closing Price. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
Premiere Shares in lieu of any fractional Jacor Share, the Exchange Agent shall
promptly pay all such amounts without interest to all holders of Premiere Shares
entitled thereto.
3.4 VOTING. In determining stockholders of Jacor entitled to notice of and
to vote at meetings of stockholders of Jacor, former stockholders of record of
Premiere shall not be deemed stockholders of record until such holders have
delivered their certificates, if any, representing Premiere Shares to the
Exchange Agent pursuant to Section 3.2(a), or otherwise pursuant to Section
3.2(e).
3.5 NO FURTHER RIGHTS. At and after the Effective Time, each holder of a
certificate or certificates that represented issued and outstanding Premiere
Shares(other than Premiere Shares held by Jacor or any direct or indirect
Subsidiary of Jacor, including, as of the Effective Time, Archon) immediately
prior to the Effective Time shall cease to have any rights as a stockholder of
Premiere, except for the right to receive the Merger Consideration upon
surrender of its certificate or certificates.
3.6 DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, Premiere Shares outstanding immediately prior to the Effective Time
and held of record by a holder who has not voted in favor of the Merger or
consented thereto in
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writing and who has properly demanded appraisal for such Premiere Shares in
accordance with the DGCL ("Dissenting Shares") shall not be converted into the
right to receive the Merger Consideration unless such holder fails to perfect or
withdraws or otherwise loses his right to appraisal. If, after the Effective
Time, such holder fails to perfect or withdraws or loses his right to appraisal,
such Premiere Shares shall be treated as if they had been converted as of the
Effective Time into the right to receive the Merger Consideration without
interest thereon. Premiere shall give Jacor prompt notice of any demands
received by Premiere for appraisal of Premiere Shares, and, prior to the
Effective Time, Jacor shall have the right to participate in all negotiations
and proceedings with respect to such demands. Prior to the Effective Time,
Premiere shall not, except with the prior written consent of Jacor, make any
payment with respect to, or settle or offer to settle, any such demands.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PREMIERE
Premiere represents and warrants to Jacor and Communications as follows:
4.1 ORGANIZATION AND STANDING. Premiere is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and is duly qualified to do business, and is 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 any person, a material adverse effect on the business, assets,
liabilities, financial condition or results of operations of such person 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
fluctuations in the market price of Premiere Shares or Jacor Shares shall not be
deemed to have a Material Adverse Effect on Premiere or Jacor, as the case may
be.
Premiere has furnished to Jacor complete and correct copies of its
Certificate of Incorporation and By-laws and of the Certificate of Incorporation
and By-laws (each an "Organizational Document") of each of its Subsidiaries, as
amended through the date hereof. Such Organizational Documents are in full
force and effect and no other organizational documents are applicable to or
binding upon Premiere or any Subsidiary thereof.
4.2 AUTHORIZATION, VALIDITY AND EFFECT. (a) Premiere has the requisite
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 stockholder approval, to consummate the transactions contemplated hereby and
thereby. Subject to stockholder approval, the execution and delivery of this
Agreement
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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
Premiere. This Agreement has been duly and validly executed and delivered by
Premiere and represents the legal, valid and binding obligation of Premiere,
enforceable against it in accordance with its terms.
(b) The Board of Directors of Premiere has duly approved the transactions
contemplated by this Agreement, the Stock Purchase Agreement and the
Shareholders' Agreement for the purposes of Section 203 of the DGCL such that
the provisions of Section 203 of the DGCL will not apply to such transactions.
4.3 CAPITALIZATION. (a) The authorized capital stock of Premiere consists
of (i) 14,000,000 shares of Common Stock, of which, as of the date hereof,
3,658,121 shares are issued, 3,654,121 shares are outstanding and 4,000 shares
are treasury shares, (ii) 20,000,000 shares of Class A Common Stock, of which,
as of the date hereof, 4,469,894 shares are issued, 4,253,974 shares are
outstanding and 216,100 shares are treasury shares, and (iii) 5,000,000 shares
of preferred stock, none of which are outstanding as of the date hereof. All of
the issued and outstanding Premiere Shares are duly and validly issued and
outstanding and are fully paid and non-assessable. As of the date hereof,
Premiere had outstanding options and warrants representing the right to acquire
from Premiere not more than 1,962,596 shares of Common Stock and 1,967,116
shares of Class A Common Stock. Each such option or warrant, the holder
thereof, the grant date, exercise price, vesting and other material terms and
the instrument or plan pursuant to which such option or warrant was issued are
described in Section 4.3(b) of the disclosure memorandum delivered at or prior
to the execution hereof to Jacor (the "Disclosure Memorandum").
(b) Except as set forth in subsection 4.3(a), there are no shares of
capital stock or other equity securities of Premiere outstanding, and except as
set forth in subsection 4.3(b) of the 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
Premiere is or may be required to issue or sell additional Premiere Shares or
any other equity interest in Premiere (collectively, "Equity Rights").
(c) Except as described in Section 4.3(c) of the Disclosure Memorandum,
since December 31, 1996, Premiere has not (i) issued any Premiere Shares or
Equity Rights, other than pursuant to the exercise of options and warrants that
were issued and outstanding on December 31, 1996, (ii) purchased, redeemed or
otherwise acquired, directly or indirectly through one or more Subsidiaries, any
Premiere Shares, or (iii) declared, set aside, made or paid to the stockholders
of Premiere dividends or other distributions on the outstanding Premiere Shares.
4.4 PREMIERE SUBSIDIARIES. (a) Section 4.4(a) of the Disclosure
Memorandum lists all Subsidiaries of Premiere. All of the outstanding shares of
capital stock of each Subsidiary of Premiere are duly and validly issued, fully
paid and nonassessable and are owned by Premiere either directly or indirectly
through another
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wholly owned Subsidiary of Premiere free and clear of any claim, lien or
encumbrance. No equity securities of any Subsidiary may be required to be
issued (other than to Premiere) by reason of any Equity Rights for shares of the
capital stock of any such Subsidiary. There are no contracts, commitments,
understandings or arrangements by which Premiere or any Subsidiary of Premiere
is or may be obligated to transfer any shares of the capital stock of any
Subsidiary.
Each Subsidiary is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated or organized, has
the corporate power and authority necessary for it to own or lease its
properties and assets and to carry on its business as it is now being conducted,
and is duly qualified to do business and in good standing in the states of the
United States in which the ownership of its property or the conduct of its
business requires it to be so qualified, except for such jurisdictions in which
the failure to be so qualified and in good standing would not have a Material
Adverse Effect on Premiere.
As used in this Agreement, the term "Subsidiary" shall mean, with respect
to Premiere or Jacor, 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) Other than as set forth in Section 4.4(b) of the Disclosure Memorandum
and except for interests in Subsidiaries, neither Premiere nor any Subsidiary
thereof owns, directly or indirectly, any interest or investment (whether equity
or debt) in any corporation, limited liability company, partnership, joint
venture, business, trust or other legal entity.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) None of the execution
and delivery of this Agreement by Premiere, nor the consummation by Premiere of
the transactions contemplated herein, nor compliance by Premiere with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of the Organizational Documents of Premiere or any Subsidiary thereof, (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 Premiere or any
Subsidiary thereof 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 on
Premiere, or (iii) subject to receipt of the requisite approvals referred to in
Section 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 Premiere or any Subsidiary thereof or
any of their properties or assets where such violation would have a Material
Adverse Effect on Premiere.
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(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 "Commission") thereunder, (ii)
notices under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (iii) filings with the Secretary of State of the State
of Delaware required to effect the Merger, (iv) 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, (v) as set forth in Section
4.5(b) of the Disclosure Memorandum, and (vi) 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 on Premiere, no
notice to, filing with, authorization of, exemption by or consent or approval of
any Governmental Authority is necessary for the consummation by Premiere of the
transactions contemplated in this Agreement.
(c) The consents of the Consenting Stockholders, when delivered to the
Secretary of Premiere with respect to the outstanding Premiere shares of which
they are the beneficial owners, are sufficient to approve the Merger and the
transactions contemplated hereby on behalf of Premiere. The Secretary of
Premiere has custody of the book in which proceedings of meetings of
stockholders of Premiere are recorded.
4.6 PREMIERE REPORTS; FINANCIAL STATEMENTS. (a) Premiere has filed all
forms, reports and documents required to be filed by it with the Commission
since January 1, 1994 (collectively, the "Premiere Reports") pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the
rules and regulations promulgated thereunder. As of their respective dates, the
Premiere Reports (i) complied when filed as to form in all material respects
with the applicable requirements of the Exchange Act and the rules and
regulations promulgated thereunder and (ii) did not when filed 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.
(b) The consolidated balance sheets of Premiere and its Subsidiaries as of
December 31, 1996 and December 31, 1995 and the related statements of
operations, changes in stockholders' equity and cash flows for each of the years
in the three-year period ended December 31, 1996, together with the notes
thereto, included in Premiere's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, a copy of which, in the form in which it is to be filed
with the Commission (the "Premiere Form 10-KSB"), has been provided to Jacor
(together, the "Premiere 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 stockholders' equity and cash flows of
Premiere and its consolidated Subsidiaries as of the dates and for the periods
indicated.
(c) As of the date of this Agreement, except as set forth in the Premiere
Financial Statements or the notes thereto, or as described in Section 4.6(c) of
the
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Page 12
Disclosure Memorandum, neither Premiere 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
Premiere reasonably anticipates will create such claim or liability, other than
claims or liabilities incurred subsequent to December 31, 1996, in the ordinary
course of business, consistent with past practices and which individually and in
the aggregate do not have and are not reasonably anticipated to have a Material
Adverse Effect on Premiere.
(d) Since December 31, 1996 and except as disclosed in the Premiere
Reports, Premiere and its Subsidiaries have conducted their respective
businesses only in the ordinary course and consistent with past practices.
(e) Since December 31, 1996, except as disclosed in Section 4.6(e) of the
Disclosure Memorandum and the Premiere Form 10-KSB, there has been no event or
condition that has caused or is reasonably anticipated to cause a Material
Adverse Effect on Premiere.
4.7 TAX AND ACCOUNTING MATTERS.
(a) For purposes of this Agreement, (i) the term "TAXES" shall include all
federal, state, county, local or foreign taxes, charges, levies, imposts or
other assessments of any nature whatsoever, including, without limitation,
corporate income tax, corporate franchise tax, payroll tax, sales tax, use tax,
property tax, excise tax, withholding tax, and environmental tax, together with
any interest thereon and any penalties or additions to tax relating thereto
imposed by any governmental taxing authority for which Premiere or any other
member of the Group (as defined below in this Section 4.7(a)) may be directly or
contingently liable in its own right, as collection agent for taxes imposed on
another person, as a result of any guaranty or election, or as a transferee of
the assets of, or as successor to, any person, or pursuant to any applicable
law; (ii) the term "GROUP" shall mean, individually and collectively, Premiere,
any Subsidiary of Premiere, and any individual, trust, corporation, partnership,
limited liability company, and any other entity as to which Premiere may be
liable for Taxes for which Premiere or such individual or entity may be directly
or contingently liable in its own right, as a result of any guaranty or
election, or as a transferee of the assets of, or as successor to, any person,
or pursuant to any applicable law; (iii) the term "RETURNS" shall mean all
returns, reports, estimates, declarations of estimated tax, information
statements and other filings relating to, or required to be filed in connection
with, any Taxes, including, without limitation, information returns or reports
with respect to backup or employee withholding and other payments to third
parties; and (iv) for purposes of this Agreement, the term "CODE" shall mean the
Internal Revenue Code of 1986, as amended.
(b) Except as indicated in Section 4.7(b) of the Disclosure Memorandum,
(i) all Returns required to be filed by or on behalf of any member of the Group
have been duly filed on a timely basis and all such Returns are true, correct
and complete in all material respects; (ii) all Taxes that have been shown as
due and payable on the Returns that have been filed by or on behalf of each
Member of the Group have been timely paid, and no other Taxes are payable by any
member of the Group with respect
<PAGE>
Page 13
to items or periods covered by such Returns (whether or not shown on or
reportable on such Returns); (iii) the amounts set forth as provisions for
current and deferred taxes and/or accrued liabilities in the Premiere Financial
Statements are sufficient for the payment of all unpaid Taxes (other than Taxes
attributable to After MidNite Entertainment, Inc. or its predecessor) accrued
for or applicable to all periods ended on the respective dates of the Premiere
Financial Statements and all years and periods prior thereto, and each of the
amounts set forth on the Premiere Financial Statements in respect of current
Taxes and deferred Taxes has been correctly determined in accordance with GAAP;
(iv) no member of the Group is delinquent in the payment of any Taxes or has
requested any extension of time within which to file any Return, which Return
has not since been filed, accompanied by payment of all Taxes shown as due and
payable thereon; (v) there is no dispute or claim concerning any Tax liability
of any member of the Group either (A) claimed or raised by any governmental
taxing authority in writing or (B) as to which any director or officer of any
member of the Group (or employees responsible for Taxes of any such member of
the Group) has knowledge based upon personal contact with any agent of such
authority, other than those Taxes, identified in Section 4.7(b) of the
Disclosure Memorandum, being contested in good faith by appropriate proceedings;
(vi) no member of the Group has waived any statute of limitations in respect of
Taxes or granted any extension of the limitations period applicable to any claim
for Taxes; (vii) Premiere is not liable for the Taxes of any person, including,
without limitation, as a result of the application of United States Treasury
Regulation section 1.1502-6, any analogous provision of state, local or foreign
law (including, without limitation, principles of unitary taxation), or as a
result of any contractual arrangement, whether with any third party or with any
taxing authority; (viii) Premiere is not nor has it ever been a party to any tax
sharing agreement with any corporation or limited liability company which is not
currently a member of the Group; (ix) no claim has ever been made by any
governmental taxing authority in any jurisdiction where any member of the Group
does not file Returns that it is or may be subject to taxation by such
jurisdiction; (x) there are no liens on any of the assets of any member of the
Group that arose in connection with any failure (or alleged failure) to pay any
Taxes; (xi) each member of the Group has withheld and paid over all Taxes
required to have been withheld and paid over and complied with all information
reporting and backup withholding requirements, including maintenance of required
records with respect thereto, in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party;
(xii) no director or officer of any member of the Group (or employee responsible
for Taxes of any such member) expects any governmental taxing authority to
assess any additional Taxes for any period for which Returns have been filed;
(xiii) Section 4.7(b) of the Disclosure Memorandum lists all federal, state,
local, and foreign income and franchise Tax Returns filed with respect to
Premiere for taxable periods for which the applicable statute of limitations for
the assessment of any Tax has not yet expired; (xiv) Section 4.7(b) of the
Disclosure Memorandum lists all Returns (relating to any type of Tax and to any
taxable period) filed with respect to Premiere that have been audited and
indicates those Returns that currently are the subject of audit; (xv) Premiere
has delivered to Communications correct and complete copies of all federal,
state, local and foreign income and franchise Tax Returns filed with respect to
Premiere for all taxable periods for which the applicable statute of limitations
for the assessment of any Tax has not yet expired, and has provided
representatives of Communications access to all Returns (relating to any type of
Tax and to any taxable period) filed with respect to Premiere; (xvi) Premiere
has delivered to Communications all examination reports and
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statements of deficiency assessed against or agreed to by each member of the
Group since the date of incorporation of the predecessor of Premiere; (xvii)
Premiere is not and has never been a "United States real property holding
corporation" within the meaning of Section 897(c) of the Code); (xviii) no
member of the Group is a "consenting corporation" under Section 341(f) of the
Code; (xix) no member of the Group has entered into any compensatory agreement
with respect to the performance of services as to which payment or vesting
thereunder (including payment or vesting as a result of the transactions
contemplated hereunder) would result in a nondeductible expense to the Group
pursuant to Section 280G of the Code or an excise tax to the recipient of such
payment pursuant to Section 4999 of the Code; (xx) Premiere has not agreed, nor
is it required, to make any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise that would require the
recognition of income pursuant to such adjustment in any post-closing period;
(xxi) the amount of unpaid Taxes attributable to After MidNite Entertainment,
Inc. or its predecessor accrued for all periods ended on the date hereof and all
years or periods prior hereto does not exceed $250,000; (xxii) Section 4.7(b) of
the Disclosure Memorandum sets forth a list of each joint venture, limited
liability company, partnership or other arrangement or contract which is treated
as a partnership for Federal income tax purposes in which Premiere holds a
direct or indirect ownership interest as of the date hereof or during any
taxable period as to which the statute of limitations on the assessment of
income or franchise tax has not yet expired; and (xxiii) any past due property
taxes for which Premiere or any Subsidiary is liable do not exceed $100,000.
4.8 PROPERTIES. Except as disclosed or reserved against in the Premiere
Financial Statements and except for circumstances that would not have a Material
Adverse Effect on Premiere, Premiere and each Subsidiary thereof has good and
marketable title to all of the material properties and assets, tangible or
intangible, reflected in the Financial Statements as being owned by Premiere and
its 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 as do not affect the use thereof in any
material respect and statutory liens securing payments not yet due ("Liens").
Premiere does not own, directly or indirectly, any real estate. All leased
buildings and all leased fixtures, equipment and other property and assets that
are material to the business of Premiere on a consolidated basis are held under
leases or subleases that are valid instruments enforceable in accordance with
their respective terms. All leases to which Premiere or any Subsidiary thereof
is a party were entered into in the ordinary course of business. None of such
leases is with an Affiliate or contain any material terms or conditions which
make any such lease unreasonably onerous or commercially unreasonable. 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.
4.9 COMPLIANCE WITH LAWS. Except for environmental matters, which shall
be covered by Section 4.16 and which shall not be covered by this Section 4.9,
Premiere and each Subsidiary thereof:
(a) is in 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
on Premiere;
(b) has received no notification or communication from any Governmental
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Page 15
Authority (i) asserting that it or any of its 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 on
Premiere or (ii) threatening to revoke any license, franchise, permit or
authorization of any Governmental Authority, which revocation would have a
Material Adverse Effect on Premiere.
4.10 EMPLOYEE BENEFIT PLANS. (a) Except as listed in Section 4.10 of the
Disclosure Memorandum, none of Premiere, any of the Subsidiaries of Premiere or
any of their respective ERISA Affiliates (as defined below) maintains, is a
party to, participates in or has any liability or contingent liability with
respect to:
(i) any "employee welfare benefit plan" or "employee pension benefit plan"
(as those terms are defined in Sections 3(1) and 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), respectively); or
(ii) any retirement or deferred compensation plan, incentive compensation
plan, stock plan, unemployment compensation plan, vacation pay, severance pay,
bonus or benefit arrangement, insurance or hospitalization program or any other
fringe benefit arrangements for any current or former employee, director,
consultant or agent, whether pursuant to contract, arrangement, custom or
informal understanding, which does not constitute an employee benefit plan (as
defined in Section 3(3) of ERISA).
For purposes of this Agreement, the term "ERISA Affiliate" means, with respect
to any person, any corporation, trade or business which, together with such
person, is a member of a controlled group of corporations or a group of trades
or businesses under common control within the meaning of sections 414(b), (c),
(m) or (o) of the Code.
(b) A true and correct copy of each of the plans, arrangements, and
agreements listed in Section 4.10 of the Disclosure Memorandum (referred to
hereinafter as "Employee Benefit Plans"), and all contracts relating thereto, or
to the funding thereof, including, without limitation, all trust agreements,
insurance contracts, administration contracts, investment management agreements,
subscription and participation agreements, and recordkeeping agreements, each as
in effect on the date hereof, has been supplied to Jacor. In the case of any
Employee Benefit Plan which is not in written form, Jacor has been supplied with
an accurate description of such Employee Benefit Plan as in effect on the date
hereof. A true and correct copy of the most recent annual report, actuarial
report, accountant's opinion relating to of the plan's financial statements,
summary plan description and Internal Revenue Service determination letter with
respect to each Employee Benefit Plan, to the extent applicable, and a current
schedule of assets (and the fair market value thereof assuming liquidation of
any asset which is not readily tradable) held with respect to any funded
Employee Benefit Plan has been supplied to Jacor, and there have been no
material changes in the financial condition of the respective plans from that
stated in the annual reports and actuarial reports supplied.
(c) As to all Employee Benefit Plans:
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(i) Such Plans comply and have been administered in form and in
operation in all material respects with all applicable requirements of law,
and no event has occurred which will or could cause any such Employee
Benefit Plan to fail to comply with such requirements and no notice has
been issued by any governmental authority questioning or challenging such
compliance.
(ii) Such Plans which are employee pension benefit plans comply in
form and in operation with all applicable requirements of Sections 401(a)
and 501(a) of the Code; there have been no amendments to such plans which
are not the subject of a favorable determination letter issued with respect
thereto by the Internal Revenue Service; and no event has occurred which
will or could give rise to disqualification of any such plan under such
sections or to a tax under Section 511 of the Code.
(iii) None of the assets of any such Plan (other than Premiere's
401(k) plan) are invested in employer securities or employer real property.
(iv) There have been no "prohibited transactions" (as described in
Section 406 of ERISA or Section 4975 of the Code) with respect to any such
Plan and none of Premiere, any of its Subsidiaries or any of their
respective ERISA Affiliates has engaged in any prohibited transaction.
(v) There have been no acts or omissions by Premiere, any of its
Subsidiaries or any of their respective ERISA Affiliates which have given
rise to or may give rise to fines, penalties, taxes or related charges
under section 502 of ERISA or Chapters 43, 47 or 68 of the Code for which
Premiere or any of its Subsidiaries may be liable.
(vi) None of the payments contemplated by such Plans would, in the
aggregate, constitute excess parachute payments (as defined in section 280G
of the Code) and neither the execution of this Agreement nor the
consummation of the transactions contemplated by this Agreement would
accelerate the payment, vesting or funding of benefits under any of such
Plans.
(vii) There are no actions, suits or claims (other than routine
claims for benefits) pending or threatened involving any such Plan or the
assets thereof and no facts exist which could give rise to any such
actions, suits or claims (other than routine claims for benefits).
(viii) No such Plan is subject to Title IV of ERISA and no such
Plan is a multi-employer plan (within the meaning of Section 3(37) of
ERISA.
(ix) None of Premiere or any of its Subsidiaries has any liability or
contingent liability for providing, under any such Plan or otherwise, any
post-retirement medical or life insurance benefits, other than statutory
liability for providing group health plan continuation coverage under
Part 6 of Title I of
<PAGE>
Page 17
ERISA and Section 4980B of the Code.
(x) Accruals for all obligations under such Plans are reflected in
the financial statements of Premiere in accordance with GAAP.
(xi) To Premiere's Knowledge, there has been no act or omission that
would impair the ability of Premiere or any of its Subsidiaries (or any
successor thereto) to unilaterally amend or terminate any Employee Benefit
Plan.
(d) The full amount necessary to pay benefits accrued (determined as of
the Closing) under The Premiere Deferred Compensation Plan have been contributed
to a trust dated as of December 1, 1995 between Premiere and The Prudential Bank
and Trust Company.
4.11 MATERIAL CONTRACTS. Set forth in Section 4.11 of the Disclosure
Memorandum is a list, as of the date hereof, of the following agreements (but
specifically excluding any commitment made by advertisers to purchase commercial
broadcast time or radio station affiliation contracts, which in each case are
terminable within 18 months):
(a) each agreement between Premiere and a consumer or recipient of
Premiere's products or services and pursuant to which Premiere is to receive
more than $250,000 (or the fair market equivalent thereof in goods or services)
on an annual or annualized basis;
(b) each agreement pursuant to which Premiere will receive amounts in
excess of $250,000 (or the fair market equivalent thereof in goods or services)
on an annual or annualized basis; each agreement pursuant to which Premiere will
be required to pay an amount in excess of $250,000 (or the fair market
equivalent thereof in goods or services) on an annual or annualized basis; and
each agreement, the term of which exceeds two years and which may not be
canceled by Premiere without penalty on one year or less notice, and pursuant to
which Premiere will receive (in cash, services or property) or will be obligated
to pay, during the unexpired term thereof, an amount in excess of $250,000 (or
the fair market equivalent thereof in goods or services);
(c) each partnership or joint venture agreement to which Premiere or any
Subsidiary is a party;
(d) each agreement limiting the right of Premiere or any Subsidiary to
engage in or compete with any person in any business or geographical area;
(e) each agreement or other arrangement of or involving Premiere or any
Subsidiary with respect to indebtedness for money borrowed, including letters of
credit, guaranties, indentures, swaps and similar agreements;
(f) each management, consulting, employment, severance or similar
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agreement requiring the payment of compensation in excess of $150,000 annually,
to which Premiere or any Subsidiary is a party and which may not be terminated
by Premiere without penalty on 90 days (or less) notice;
(g) each lease or other agreement with respect to real property leased by
Premiere and which: requires Premiere to pay an amount or amounts in excess of
$250,000 on annual or annualized basis; or has an unexpired term which exceeds
two years and may not be canceled by Premiere without penalty on one year or
less notice and which requires Premiere to pay, during the unexpired term, an
amount in excess of $250,000;
(h) each collective bargaining agreement to which Premiere or any
Subsidiary is a party;
(i) each agreement with any Affiliate of Premiere (other than employment
agreements and agreements between Premiere and any Subsidiary thereof) to which
Premiere or any Subsidiary is a party which involves total payments or
liabilities to or from Premiere or any Subsidiary in excess of $60,000; and
(j) each stockholder agreement, voting trust agreement, share purchase
agreement, registration rights agreement or other similar agreement granting
rights to one or more stockholders of Premiere, restricting the voting or
transferability of Premiere Shares or otherwise pertaining to the Premiere
Shares or any interest (economic or voting) therein.
Except for such matters as would not, individually or in the aggregate,
have a Material Adverse Effect on Premiere, each contract identified in Section
4.11 of the Disclosure Memorandum (such contracts, together with all commitments
made by advertisers to purchase commercial broadcast time and radio station
affiliation contracts, are referred to herein as the "Premiere Contracts") is in
full force and effect and is a legal, valid and binding contract or agreement of
Premiere, and there is no default or breach (or, to the actual knowledge of
Premiere's president ("Premiere'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 Premiere, any Subsidiary, or, to Premiere's Knowledge, any other party, in
the timely performance of any obligation to be performed or paid thereunder or
any other material provision thereof.
Except for such matters as would not, individually or in the aggregate,
have a Material Adverse Effect on Premiere, none of the Premiere Contracts will
terminate, become terminable by the other party thereto, or have the terms
thereof become amended or amendable by the other party thereto without the
consent of Premiere, as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
4.12 LEGAL PROCEEDINGS. As of the date of this Agreement, except as
disclosed in Section 4.12 of the Disclosure Memorandum, there are no actions,
suits, investigations or proceedings instituted, pending or overtly threatened,
against Premiere or any Subsidiary thereof, or against any property, asset,
interest or right of any of them,
<PAGE>
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that involve more than $100,000 in controversy, or that seek relief other than
money damages from Premiere or a Subsidiary thereof, or that would have, either
individually or in the aggregate, a Material Adverse Effect on Premiere if
adversely decided. Neither Premiere nor any Subsidiary thereof is subject to
any judgment, order, writ, injunction or decree that would have a Material
Adverse Effect on Premiere.
4.13 CERTAIN INFORMATION. (a) When the Registration Statement (as
defined in Section 6.4) to be filed with the Commission by Jacor 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 Premiere relating to Premiere or its Subsidiaries, shall, if Premiere has
approved the contents and presentation of such information (such consent to be
conclusively presumed to have been given if the prospectus referred to in
Section 6.4 in such Registration Statement is identical to the Information
Statement(as defined below), 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 Premiere 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 Premiere for
inclusion in the Information Statement (as defined in Section 6.4) shall, at the
time such document is filed with the Commission and when it is first mailed to
the stockholders of Premiere, 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 of
which Premiere has knowledge and which is required to be described in the
Information Statement or any supplement or amendment thereto, Premiere 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 Commission, the Information Statement and
each amendment or supplement thereto shall be delivered to Jacor and its
counsel.
(c) All documents that Premiere is responsible for filing with the
Commission 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. Premiere has not entered into any contract, arrangement
or understanding with any person or firm that may result in the obligation of
Premiere, Jacor, Communications or Acquisition Corp. 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 Premiere has retained Alex. Brown & Sons
Incorporated as its financial advisor (the "Premiere Financial Advisor"), which
Financial Advisor may be entitled to an
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advisor fee of up to $2,000,000 plus reimbursement of expenses in connection
with the transactions contemplated hereby.
4.15 OPINION OF FINANCIAL ADVISOR. Premiere has received the
opinion of the Premiere Financial Advisor to the effect that, as of the date
hereof, the consideration to be received by the holders of Premiere Shares in
the Merger is fair to such holders from a financial point of view. A copy of
such opinion (or a written confirmation thereof, if presented orally) and any
amendments or supplements thereto shall be delivered to Jacor as promptly as
practicable after receipt thereof by Premiere.
4.16 ENVIRONMENTAL. Except as disclosed in Section 4.16 of the
Disclosure Memorandum and except insofar as inaccuracies in the following
statements would not have a Material Adverse Effect on Premiere (and with
respect to properties formerly owned or leased by Premiere or any Subsidiary,
only with respect to such period of ownership or lease): (i) the properties
owned or leased by Premiere or any Subsidiary and properties formerly owned or
leased by Premiere or any Subsidiary for which Premiere has contractual
liability (the "Premiere Properties") are or were, as the case may be, 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 Premiere 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 by Premiere or such Subsidiary; (iii) there does not
now exist on any Premiere Properties currently owned or leased by Premiere, and
there has not occurred on, from or under Premiere Properties, a material
disposal or release of, Hazardous Substances, Hazardous Wastes or Contaminants;
(iv) Premiere Properties contain no unregistered underground storage tanks; (v)
neither Premiere 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; and (vi)
neither Premiere 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 Premiere 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 Premiere or any Subsidiary or any of their respective
predecessors. Section 4.16 of the Disclosure Memorandum contains a description
of environmental indemnities of which either Premiere or any Subsidiary is a
beneficiary.
4.17 PERSONNEL. Except as set forth in Section 4.17 of the
Disclosure Memorandum, there are no labor disputes existing, or to Premiere'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 Premiere's Knowledge, threatened to be filed with the
National Labor Relations Board against
<PAGE>
Page 21
Premiere or any Subsidiary. To Premiere's Knowledge, there is no union
representation or organizing effort pending or threatened against Premiere or
any Subsidiary. Neither Premiere nor any 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 Disclosure Memorandum.
4.18 TAKEOVER STATUTES. Except for Section 203 of the DGCL, 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 Premiere is applicable to the Merger or the other transactions
contemplated hereby.
4.19 INTELLECTUAL PROPERTY. Except for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect on Premiere:
(i) Premiere and each Subsidiary owns or possesses, or has all necessary rights
and licenses in, all patents, patent rights, licenses, inventions (whether or
not patentable or reduced to practice), copyrights (whether registered or
unregistered), know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
registered and unregistered trademarks, service marks and trade names and other
intellectual property rights (collectively, "Intellectual Property") necessary
to conduct its business as conducted; (ii) neither Premiere nor any Subsidiary
has received any unresolved notice of, or is aware of any fact or circumstance
that would give any Third Party a right to assert, infringement or
misappropriation of, or conflict with, asserted rights of others or invalidity
or unenforceability of any Intellectual Property owned by Premiere or any
Subsidiary; (iii) the use of such Intellectual Property to conduct the business
and operations of Premiere and its Subsidiaries as conducted does not infringe
on the rights of any person; (iv) no person is challenging or infringing on or
otherwise violating any right of Premiere or any Subsidiary with respect to any
Intellectual Property owned by and/or licensed to Premiere or Subsidiary; (v)
neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby will result in a loss or limitation in (x) the rights and
licenses of Premiere or any Subsidiary to use or enjoy the benefit of any
Intellectual Property employed by them in connection with their business as
conducted (y) the amount of any royalties or other benefits received by Premiere
or any Subsidiary thereof from Intellectual Property owned by it.
4.20 EMPLOYMENT AGREEMENTS. As of the date hereof:
(a) Amended employment agreements in substantially the form of Exhibit
7.2(f)(i) hereto (the "Employment Agreements") between Premiere and each of
Stephen C. Lehman, Kraig T. Kitchen, Timothy M. Kelly and Daniel M. Yukelson
(the "Premiere Executive Officers") have been executed and delivered and are in
full force and effect (subject to the consummation of the transactions
contemplated hereby) and have not been materially breached.
(b) Amended employment agreements in substantially the form of Exhibit
7.2(f)(ii) hereto (the "Amended Employment Agreements") between Premiere and
each of Robert W. Crawford and Louise G. Palanker have been executed and
delivered and
<PAGE>
are in full force and effect (subject to the consummation of the transactions
contemplated hereby) and have not been materially breached.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF JACOR,
COMMUNICATIONS AND ACQUISITION CORP.
Jacor, Communications and Acquisition Corp., jointly and severally,
represent and warrant to Premiere as follows:
5.1 ORGANIZATION AND STANDING. Each of Jacor, Communications and
Acquisition Corp. is a corporation duly organized, validly existing and in good
standing under the laws of the State of its incorporation. Each of Jacor,
Communications and Acquisition Corp. 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. Jacor's
Certificate of Incorporation and By-laws are in full force and effect and no
other organizational documents are applicable to or binding upon Jacor.
5.2 AUTHORIZATION, VALIDITY AND EFFECT. Each of Jacor, Communications and
Acquisition Corp. 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 and stockholder action (to the extent required) in respect
thereof on the part of each of Jacor, Communications and Acquisition Corp. This
Agreement has been duly and validly executed and delivered by each of Jacor,
Communications and Acquisition Corp. and represents the legal, valid and binding
obligation of each of Jacor, Communications and Acquisition Corp., enforceable
against each of them in accordance with its terms.
5.3 CAPITALIZATION. As of April 1, 1997, the authorized capital stock of
Jacor consisted of 100,000,000 Common Shares, of which 34,834,780 shares were
issued and outstanding (the "Jacor Common Stock"), 2,000,000 shares of Class A
Preferred Stock, none of which is issued as of the date of this Agreement, and
2,000,000 shares of Class B Preferred Stock, none of which is issued as of the
date of this Agreement. All of the issued and outstanding shares of Jacor
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 Jacor, Communications or Acquisition Corp.,
nor the consummation by Jacor, Communications or Acquisition Corp. of the
<PAGE>
transactions contemplated herein, nor compliance by Jacor, Communications or
Acquisition Corp. with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of the certificate of incorporation or
by-laws or equivalent organizational documents of Jacor, Communications or
Acquisition Corp., (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
Jacor, Communications or Acquisition Corp. or, 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 their respective
properties or assets may be subject, and that would, in any such event, have a
Material Adverse Effect on Jacor, or (iii) subject to receipt of the requisite
approvals referred to in subsection 5.4(b), violate any order, writ, injunction,
decree, statute, rule or regulation of any Governmental Authority applicable to
Jacor, Communications, Acquisition Corp. or any of their respective properties
or assets where such violation would have a Material Adverse Effect on Jacor.
(b) Other than (i) such as are required under Federal or state securities
or "blue sky" laws and the rules and regulations thereunder, (ii) notices and
completion of waiting periods under the HSR Act, (iii) filings with the
Secretary of State of the State of Delaware under the DGCL required to effect
the Merger, (iv) in connection or compliance with the applicable requirements of
the Code and state, local and foreign tax laws and (v) 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 on Jacor, no notice
to, filing with, authorization of, exemption by or consent or approval of any
Governmental Authority is necessary for the consummation by Jacor,
Communications or Acquisition Corp. of the transactions contemplated in this
Agreement.
(c) The affirmative vote of Communications, as the sole stockholder of
Acquisition Corp. is sufficient, and no further vote or consent of any class or
series of capital stock of Jacor, Communications or Acquisition Corp. is
necessary, to approve the Merger and the other transactions contemplated hereby
on the part of Jacor, Communications or Acquisition Corp.
5.5 JACOR REPORTS; FINANCIAL STATEMENTS. (a) Jacor has filed all forms,
reports and documents required to be filed by it with the Commission since
January 1, 1994 (collectively, the "Jacor Reports") pursuant to Section 13 or
15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
As of their respective dates, the Jacor Reports (i) complied when filed as to
form in all material respects with the applicable requirements of the Exchange
Act and the rules and regulations promulgated thereunder and (ii) did not when
filed 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.
(b) The consolidated balance sheets of Jacor and its Subsidiaries as of
<PAGE>
December 31, 1996 and December 31, 1995 and the related statements of
operations, changes in stockholders' equity and cash flows for each of the years
in the three-year period ended December 31, 1996, together with the notes
thereto, included in Jacor's Annual Reports on Form 10-K for the fiscal year
ended December 31, 1996, as filed with the Commission (together, the "Jacor
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 stockholders' equity and cash flows of Jacor
and its consolidated Subsidiaries as of the dates and for the periods indicated.
5.6 LEGAL PROCEEDINGS. As of the date of this Agreement, there are no
actions, suits or proceedings instituted or pending, or to the actual knowledge
of Jacor's president ("Jacor's Knowledge"), overtly threatened, against Jacor,
Communications or Acquisition Corp., or any of their respective Subsidiaries or
against any property, asset, interest or right of any of them, or any of their
respective Subsidiaries that would have, either individually or in the
aggregate, a Material Adverse Effect on Jacor. None of Jacor, Communications or
Acquisition Corp. is subject to any judgment, order, writ, injunction or decree
that would have a Material Adverse Effect on Jacor.
5.7 ACQUISITION CORP. Acquisition Corp. was formed solely for the purpose
of engaging in the transactions contemplated hereby. Acquisition Corp. is, and
shall be on the Closing Date, a wholly owned direct Subsidiary of
Communications. Except for obligations or liabilities incurred in connection
with its incorporation or organization, and the transactions contemplated
hereby, Acquisition Corp. 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.
5.8 NO BROKERS. None of Jacor, Communications or Acquisition Corp. has
entered into a contract, arrangement or understanding with any person or firm
that may result in the obligation of Jacor or Acquisition Corp. 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.
5.9 JACOR'S FINANCING. Jacor has or will have sufficient funds available
to consummate the transactions contemplated by this Agreement and to pay all
transaction related fees and expenses.
5.10 COMPLIANCE WITH LAWS. Jacor, Communications and Acquisition and each
Subsidiary thereof:
(a) is in 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
on Jacor;
(b) has received no notification or communication from any Governmental
<PAGE>
Authority (i) asserting that it or any of its 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 on
Jacor or (ii) threatening to revoke any license, franchise, permit or
authorization of any Governmental Authority, which revocation would have a
Material Adverse Effect on Jacor.
5.11 CERTAIN INFORMATION. (a) When the Information Statement (as defined
in Section 6.4) to be filed with the Commission by Premiere pursuant to Section
6.4 hereof or any amendment or supplement thereto, shall be mailed to Premiere's
stockholders, and at all times subsequent thereto up to and including the
Effective Time, such Information Statement and all amendments or supplements
thereto, with respect to all information set forth therein furnished by Jacor
relating to Jacor or its Subsidiaries, shall, if Jacor has approved the contents
and presentation of such information (such consent to be conclusively presumed
to have been given if the prospectus included in the Registration Statement (as
defined below) is identical to the Information Statement), 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 Jacor specifically for
inclusion in the Information 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 Jacor for
inclusion in the Registration Statement (as defined in Section 6.4) shall, at
the time such Registration Statement or any post-effective amendment thereto is
filed with the Commission or shall become effective, and at all times subsequent
thereto up to and including the Effective Time, 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 of which Jacor has knowledge which is required to be described in
the Registration Statement or any supplement or amendment thereto, Jacor 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 Commission, the Registration
Statement and each amendment or supplement thereto shall be delivered to
Premiere and its counsel.
All documents that Jacor is responsible for filing with the Commission 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.
5.12 STOCK MERGER CONSIDERATION. When issued at the Effective Time, the
Jacor Shares comprising the Stock Merger Consideration will be duly issued,
fully paid and non-assessable.
<PAGE>
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 EMPLOYMENT AGREEMENTS. Premiere agrees to keep in full force and
effect (subject to the consummation of the transactions contemplated hereby)
each of the Employment Agreements and Amended Employment Agreements and not to
amend any of the Employment Agreements or Amended Employment Agreements without
the consent of Jacor, which consent may be withheld in Jacor's sole judgment;
provided, however, that it shall not be a breach of this covenant if a person
who has executed any of the Employment Agreements or Amended Employment
Agreements has died or become disabled.
6.2 INTERIM OPERATIONS OF PREMIERE. Prior to the earlier of the Effective
Time or the termination of this Agreement, except as contemplated by any other
provision of this Agreement, unless Jacor has previously consented in writing
thereto (which consent shall be granted in Jacor's sole discretion), Premiere
and its Subsidiaries will each conduct its operations according to its ordinary
course of business consistent with past practice, and Premiere and its
Subsidiaries will each use its reasonable best efforts to preserve intact its
business organization, to keep available the services of its officers and
employees and to maintain existing relationships with licensors, licensees,
suppliers, contractors, distributors, customers and others having business
relationships with it. Without limiting the generality of the foregoing,
Premiere shall not, and shall not permit any Subsidiary thereof, 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 Premiere or any
Subsidiary of Premiere 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 Premiere and its Subsidiaries on a
consolidated basis;
(b) amend, alter or revise any existing employment contract, understanding,
arrangement or agreement with 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 Premiere or such Subsidiary does
not have the unconditional right to terminate without liability (other than
liability for services already rendered) at any time on or after the Effective
Time;
(c) adopt any new employee benefit plan or make any change in or to any
existing Employee Benefit Plan 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
<PAGE>
employee benefit plan liabilities of Premiere and its Subsidiaries, taken as a
whole;
(d) sell, lease or otherwise dispose of any of its assets (including
capital stock of its Subsidiaries) or acquire any business or assets, except in
the ordinary course of business for an amount not exceeding $250,000 in the
aggregate;
(e) incur any 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, or issue or sell any debt securities, other than (i) borrowings in
connection with acquisitions permitted by subsection 6.2(d) and (ii) borrowings
under existing lines of credit in the ordinary course of business not to exceed
$500,000 in the aggregate at any time outstanding.
(f) authorize, commit to or make capital expenditures in an amount
exceeding $250,000 in the aggregate;
(g) mortgage or otherwise encumber or subject to any Lien any material
amount of properties or assets owned by Premiere or any Subsidiary thereof 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 Organizational Documents;
(j) declare or pay any dividend or distribution with respect to its capital
stock;
(k) other than pursuant to options or warrants outstanding as of the date
hereof and listed in Section 4.3(b) of the Disclosure Memorandum, issue, sell,
deliver or agree to issue, sell, deliver (whether through issuance or granting
of options, warrants, commitments, subscriptions or rights to purchase) any
capital stock or split, combine, reclassify or subdivide the capital stock;
(l) make any tax election or settle or compromise any material tax
liability for an amount greater than reflected on the Premiere Financial
Statements;
(m) 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 as of the date of this Agreement, pay
or agree to pay in settlement or compromise of any suits or claims of liability
against Premiere, its directors, officers, employees or agents, more than an
aggregate of $100,000 for all
<PAGE>
such suits and claims; provided, however, in the event Premiere does not effect
such settlement or compromise because Jacor has declined to consent thereto, and
this Agreement is subsequently terminated by Premiere pursuant to Section 8.1
hereof, Jacor shall indemnify and hold Premiere harmless against all liabilities
and expense reasonably incurred in connection with such matter to the extent in
excess of the amount for which Premiere could have settled or compromised such
matter if Jacor had granted such consent;
(p) enter into any agreement providing for the acceleration of any party's
rights or payment or performance or other consequence as a result of a change in
control of Premiere;
(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 STOCKHOLDER APPROVAL. With respect to Premiere, this Agreement is
subject to the approval of the stockholders of Premiere. Premiere acknowledges
that the Consenting Stockholders have agreed to execute and deliver to Premiere
written consents approving this Agreement as soon as practicable after the
execution of this Agreement.
6.4 INFORMATION STATEMENT; REGISTRATION STATEMENT. As soon as practicable
following the date hereof, Premiere shall file with the Commission an
information statement with respect to the Merger (the "Information Statement").
Jacor shall cooperate with Premiere in preparing the Information Statement and
shall provide Premiere with all information about Jacor that is required to be
included in the Information Statement under the rules and regulations of the
Commission under the Exchange Act. As soon as practicable following receipt of
final comments from the staff of the Commission on the Information Statement (or
advice that such staff will not review such filing), Jacor shall use its
reasonable best efforts to file a registration statement on Form S-4 relating to
the Jacor Shares issuable in the Merger at the Effective Time (the "Registration
Statement") and to have the Registration Statement declared effective by the
Commission and to maintain the effectiveness of such Registration Statement
until completion of the Merger. The parties shall cooperate in taking any
action reasonably necessary to allow the Information Statement to also serve as
a prospectus for the Registration Statement (the "Prospectus/Information
Statement"). Promptly after the effectiveness of the Registration Statement,
Premiere shall mail the Prospectus/Information Statement to all holders of
Premiere Shares. Jacor and Premiere shall cooperate with each other in the
preparation of the Prospectus/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
Prospectus/Information Statement or the Registration Statement in order to make
the statements contained or incorporated by reference therein not
<PAGE>
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
Prospectus/Information Statement and the Registration Statement.
6.5 NOTIFICATION. Premiere and Jacor 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 INVESTIGATION AND CONFIDENTIALITY. Prior to the earlier of the
Effective Time and the termination of this Agreement, Jacor, on the one hand,
and Premiere, on the other hand, 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 and of their respective financial and legal condition as Jacor or
Premiere reasonably deem 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. Premiere agrees to furnish Jacor and its advisors with such
financial and operating data and other information with respect to its
businesses, properties and employees as Jacor shall from time to time reasonably
request. All information furnished to Premiere or Jacor by the other party
hereto shall be subject to the Confidentiality Agreement, dated February 3, 1997
(the "Confidentiality Agreement"), between Jacor and Premiere.
6.7 FILINGS; OTHER ACTION. Subject to the terms and conditions herein
provided, the parties shall (a) within ten business days hereof make their
respective filings and thereafter make any other required submissions under the
HSR Act; (b) use their reasonable best efforts to cooperate with each other in
(i) determining which filings are required to be made prior to the Effective
Time with, and which consents, approvals, permits or authorizations are required
to be obtained prior to the Effective Time from, Governmental Authorities in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) timely making all
such filings and timely seeking all such consents, approvals, permits or
authorizations; and (c) use their reasonable best efforts to take, or cause to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement and satisfy the conditions to the
transactions contemplated hereby; provided, however, that nothing in this
Section 6.7 shall require Jacor, or require any Subsidiary of Jacor, to divest
or hold separate any radio or television station or stations, or asset or groups
of assets, or enter into new arrangements or terminate any existing arrangement,
or take any other similar specific action as the result of a request or
requirement 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
<PAGE>
this Agreement, subject to the remaining provisions hereof, the officers and
directors of the parties shall promptly take all such necessary action.
6.8 INDEMNIFICATION AND INSURANCE.
(a) For the four years following the Effective Time, Jacor shall indemnify
and hold harmless each present and former employee, agent, director or officer
of Premiere 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, Premiere or its Subsidiaries, 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 four-year period, all
rights to indemnification in respect of such claims shall continue until the
final disposition of any and all such claims.
(b) Jacor shall cause the Surviving Corporation to keep in effect
provisions substantially similar to the provisions in Premier's Certificate 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 DGCL, which
provisions shall not be amended except as required by applicable law or except
to make changes permitted by law that would enhance the Indemnified Parties'
right of indemnification or advancement of expenses.
(c) If, after the Effective Time, 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 the obligations set forth in this
Section 6.8. The provisions of this Section 6.8 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 Premiere or any of
its Subsidiaries (and his heirs and representatives).
(d) In connection with any claim for indemnification under the provisions
contained or referred to in subsections (a) and (b) of this Section 6.8, Jacor
agrees that it shall not, and shall cause Premiere not to, assert as a defense
to or a mitigating factor is any such claim that any Indemnified Party is a
present or former employee, agent, officer or director of Archon or was
otherwise affiliated with Archon.
(e) Jacor will cause to be maintained for a period of not less than four
years from the Effective Time directors and officers liability insurance ("D&O
Insurance"), to the extent commercially available, on terms and conditions no
less advantageous to the Indemnified Parties than Premiere's existing D&O
Insurance. Notwithstanding the foregoing, in satisfying its obligation under
this Section 6.8(e), Jacor and Premiere shall not be obligated to pay premiums
in excess of 125% of the premium paid or to be paid by Premiere in the fiscal
year ended December 31, 1996, which amounts are disclosed
<PAGE>
in Section 6.8(e) of the Disclosure Memorandum, but provided further that Jacor
and Premiere shall nevertheless be obligated to provide such coverage as may be
obtained for 125% of the premium to be paid by Premiere for such insurance in
the fiscal year ended December 31, 1996.
6.9 PUBLICITY. Premiere and Jacor 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 regarding the transactions contemplated hereby before issuing
any such press release and in making any filings with any Governmental Authority
or with any national securities exchange with respect thereto.
6.10 TRANSFER TAXES. Jacor 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 Jacor, Premiere,
their respective Subsidiaries or their stockholders, except transfer taxes in
connection with the registration of Jacor Shares in a name other than the name
of the holder of Premiere Shares in respect of which the Jacor Shares are to be
issued.
6.11 PREMIERE OPTIONS. (a) Premiere shall use its reasonable best
efforts to cause each of the Premiere Executive Officers, Roberto W. Crawford
and Louise G. Palanker, immediately after the execution of this Agreement, to
enter into an agreement, substantially in the form of Exhibit 6.11(a) to this
Agreement (an "Employee Option Agreement"), providing for the cancellation and
replacement of such options ("Existing Employee Options") by an option to
acquire Jacor Shares under Jacor's existing option plan (a "Roll-Over Option")
at the Effective Time, all as provided in Section 6.11(b).
(b) The cancellation of the Existing Employee Options and replacement with
Roll-Over Options shall comply in all respects, and shall be performed in
accordance, with the methodology prescribed by the provisions of Section 424(a)
of the Code and the regulations thereunder. Consistent with the methodology
prescribed by Section 424(a) of the Code and the applicable regulations
thereunder,(i) the number of Jacor Shares subject to such Roll-Over Option will
be determined by multiplying the Exchange Ratio by the number of Premiere Shares
subject to the canceled Existing Employee Option, and (ii) the exercise price
under such Roll-Over Option will be determined by dividing the exercise price
per share under the Cancelled Existing Employee Option in effect immediately
prior to the Effective Time by the Exchange Ratio, and rounding the exercise
price thus determined to the nearest whole cent (a half-cent shall be rounded to
the next higher whole cent). The number of Jacor Shares subject to each
Roll-Over Option will be fully vested as of the Effective Time and such
Roll-Over Option will expire at the same time as the Existing Employee Option it
replaces.
(c) Premiere will use its reasonable best efforts to cause the vesting,
prior to the Effective Time, of each unvested option or warrant to acquire
Premiere Shares (other than options and warrants owned by Archon, any of the
Premiere Executive Officers or
<PAGE>
Page 32
Roberto W. Crawford or Louise G. Palanker), and to cause each person holding any
such option or warrant (a "Holder") to enter into an agreement, in a form
substantially similar to Exhibit 6.11(c) to this Agreement (an "Option and
Warrant Agreement"), to cancel each of such options and warrants immediately
prior to the Effective Time in exchange for the Applicable Option or Warrant
Payment. The Applicable Option or Warrant Payment for a Holder shall be the
amount of cash and Jacor Shares that would be payable as the Merger
Consideration for a number of Premiere Shares equal to (i) the sum of the
amounts determined by multiplying the respective numbers of Premiere Shares
issuable upon exercise of each of the Premiere options or Premiere warrants held
of record by the Holder on the Closing Date by the Spread applicable to each
such Premiere option or Premiere warrant divided by (ii) the Presumed Premiere
Stock Price. The Spread of each Premiere option or Premiere warrant shall be
the difference between the Presumed Premiere Stock Price and the per share
exercise price of such warrant or option. The Presumed Premiere Stock Price
shall be the Jacor Closing Price multiplied by the Exchange Ratio. Cash shall
be paid for fractional shares yielded by the quotient computed pursuant to the
second sentence of this Section 6.11(c).
6.12 CONSENTS. Premiere shall promptly forward to Jacor a copy of all
consents received from Consenting Stockholders and shall promptly acknowledge in
writing to Jacor that consents have been received from the holders of a majority
of the outstanding voting stock of Premiere and that accordingly this Agreement
has been duly approved pursuant to the DGCL.
6.13 STOCK PURCHASE AGREEMENT. Jacor and Communications shall comply in
all material respects with their obligations contained in the Stock Purchase
Agreement.
6.14 EMPLOYEE BENEFIT PLAN. Prior to the Closing, the Board of Directors
of Premiere shall have adopted a resolution ceasing further contribution and
benefit accruals under the Premiere Employee 401(k) Plan (the "401(k) Plan") and
terminating the 401(k) Plan effective as of a date prior to the Closing.
6.15 TERMINATION OF CERTAIN AGREEMENTS. (a) Premiere shall use its
reasonable best efforts to cause all agreements relating to the Premiere Shares,
voting or otherwise, to which Archon or Affiliates of Premiere are parties
(other than this Agreement, the Stock Purchase Agreement and the Shareholders'
Agreement), including those listed in Section 6.15(a) of the Disclosure
Schedule, to be terminated prior to the Closing (subject to the consummation of
the transactions contemplated hereby) without any liability to Premiere or Jacor
other than those liabilities fully satisfied prior to the Closing.
(b) Premiere shall use its reasonable best efforts to cause the
registration rights agreement entered into in connection with the acquisition by
Premiere of After MidNite Entertainment, Inc. to be terminated prior to the
Closing (subject to the consummation of the transactions contemplated hereby)
without any liability to Premiere or Jacor other than those liabilities fully
satisfied prior to the Closing.
<PAGE>
Page 33
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 CONDITIONS TO OBLIGATIONS OF THE PARTIES. The respective obligations
of Premiere, Jacor, Communications and Acquisition Corp. 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) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated.
(b) 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; provided, however, that nothing in this Section 7.1(b) shall require
Jacor, any Subsidiary of Jacor or any Affiliate of Archon to divest or hold
separate any radio or television station or stations, or asset or groups of
assets, or enter into new arrangements or terminate any existing arrangement, or
take any other similar specific action. as the result of a request or
requirement requested by any Governmental Authorities.
(c) All consents, authorizations, orders and approvals of (or filings or
registrations with) any Governmental Authority required in connection with the
execution, delivery and performance of this Agreement (each a "Regulatory
Authorization") 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.
(d) The Registration Statement shall have become effective in accordance
with the provisions of the Securities Act of 1933, as amended (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.
(e) This Agreement shall have been approved by (i) the holders of
outstanding voting securities of Premiere representing a majority of the votes
entitled to be voted on the matter and (ii) Communications, as the sole
stockholder of Acquisition Corp.
(f) Communications shall have purchased all of the outstanding capital
stock of Archon pursuant to the Stock Purchase Agreement.
7.2 CONDITIONS TO OBLIGATIONS OF PREMIERE. The obligations of Premiere 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:
<PAGE>
Page 34
(a) The representations and warranties of Jacor, Communications and
Acquisition Corp. set forth in this Agreement which are qualified as to
materiality shall be true and correct in all respects, and the representations
and warranties of Jacor, Communications and Acquisition Corp. set forth in this
Agreement which are not qualified as to materiality shall be true and correct in
all material respects, in each case 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 a specified date, which shall be true
and correct in all respects or all material respects, as the case may be, as of
such date); provided, however that this condition shall be deemed satisfied
unless the failure of such condition to be satisfied would have a material
adverse effect on the benefits that the stockholders of Premiere are reasonably
expected to receive in the Merger.
(b) Each of the agreements and covenants of Jacor, Communications and
Acquisition Corp. to be performed and complied with by Jacor, Communications and
Acquisition Corp. pursuant to this Agreement prior to the Effective Time shall
have been duly performed and complied with in all material respects; provided,
however that this condition shall be deemed satisfied unless the failure of such
condition to be satisfied would have a material adverse effect on the benefits
that the stockholders of Premiere are reasonably expected to receive in the
Merger.
(c) Jacor shall have delivered to Premiere 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 JACOR, COMMUNICATIONS AND ACQUISITION
CORP. The obligations of Jacor, Communications and Acquisition Corp. 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 Premiere set forth in this
Agreement which are qualified as to materiality and the representations and
warranties contained in Section 4.3 hereof shall be true and correct in all
respects, and the representations and warranties of Premiere set forth in this
Agreement which are not qualified as to materiality shall be true and correct in
all material respects, in each case 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 a specified date, which shall be true
and correct in all respects or all material respects, as the case may be, as of
such date); provided, however, that except with respect to the representation
and warranties in Section 4.3 this condition shall be deemed satisfied unless
the failure of such condition to be satisfied would have a Material Adverse
Effect on Premiere or a material adverse effect on the overall economic benefits
Jacor reasonably anticipates to realize from its acquisition of Premiere (it
being understood and agreed that the failure of Premiere to meet the projected
results of operations provided to Jacor shall not, by
<PAGE>
Page 35
itself, be deemed to have material adverse effect on the overall economic
benefits Jacor reasonably anticipates to realize from its acquisition of
Premiere).
(b) The agreement of Premiere contained in Section 6.2(k) hereof shall have
been duly performed and complied with in all respects and each of the other
agreements and covenants of Premiere to be performed and complied with by
Premiere pursuant to this Agreement prior to the Effective Time shall have been
duly performed and complied with in all material respects; provided, however,
that except for the agreement contained in Section 6.2(k), this condition shall
be deemed satisfied unless the failure of such condition to be satisfied would
have a Material Adverse Effect on Premiere or a material adverse effect on the
overall economic benefits Jacor reasonably anticipates to realize from its
acquisition of Premiere.
(c) Premiere shall have delivered to Jacor 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) and 7.3(b).
(d) Each of the Premiere Executive Officers, Roberto W. Crawford and
Louise G. Palanker shall have executed and delivered to Jacor an Employee Option
Agreement.
(e) Except for (i) options and warrants to acquire Premiere Shares held by
Archon, (ii) options to acquire Premiere Shares that will be converted to
options to acquire Jacor Shares pursuant to the Employee Option Agreements that
have been executed and delivered to Jacor, and (iii) options and warrants to
acquire Premiere Shares that will be canceled pursuant to the Option and Warrant
Agreements that have been executed and delivered to Jacor, there shall be no
more than 750,000 Premiere Shares that may be acquired pursuant to options or
warrants to acquire Premiere Shares.
(f) The Employment Agreements and the Amended Employment Agreements shall
be in full force and effect (subject to the consummation of the transactions
contemplated hereby) and shall not have been materially breached as of the
Closing; provided, however, this condition shall be waived with respect to any
such individual who has died or become disabled prior to the Closing.
(g) At least 10 days prior to the Closing, Premiere shall have delivered
to Jacor a letter identifying all persons who would be deemed to be "affiliates"
of Premiere for purposes of Rule 145 under the Securities Act (the "Rule 145
Affiliates") and Jacor shall have received an agreement substantially in the
form of Exhibit 7.3(g) to this Agreement from each Rule 145 Affiliate.
(h) All agreements relating to the Premiere Shares, voting or otherwise,
to which Archon or Affiliates of Premiere are parties (other than this
Agreement, the Stock Purchase Agreement and the Shareholders' Agreement),
including those listed in Section 6.15(a) of the Disclosure Schedule, shall have
been terminated without any liability to Premiere or Jacor other than those
liabilities fully satisfied prior to the Closing.
<PAGE>
Page 36
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 Premiere and Jacor;
(b) by Premiere or Jacor, upon written notice to the other party, if the
Merger shall not have been consummated on or prior to August 31, 1997 (the
"Outside Date").
(c) by Premiere or Jacor, 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 7.1(b) to remove such injunction, order
or decree;
(d) by Premiere or Jacor, 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 the terminating party
has not breached the terms of this Agreement; or
(e) by Jacor, if Archon shall have breached any material representation or
warranty, or failed to perform any covenant or duty contained in, the Stock
Purchase Agreement, other than a breach or noncompliance that would not
materially affect the benefits Jacor is receiving from the Stock Purchase
Agreement.
8.2 EFFECT OF TERMINATION. (a) In the event of the termination of this
Agreement pursuant to Section 8.1, the respective obligations of the parties
under this Agreement will terminate except for Sections 6.2(o), 8.2, 9.2, 9.4,
9.5, 9.6, 9.10, 9.11, 9.12 and 9.13; provided, however, that the termination of
this Agreement will not relieve any party from liability for any breach of this
Agreement.
(b) The parties acknowledge that in the event this Agreement is terminated
by Premiere by reason of a breach of this Agreement by Jacor or the Merger
otherwise fails to be consummated by reason of a breach of this Agreement by
Jacor, Premiere will incur substantial damages which will be difficult or
impossible to quantify. Accordingly, the parties hereto agree that in the event
it is determined that the termination of this Agreement and/or the failure of
the Merger to be consummated is the result of a breach of this Agreement by
Jacor, Premiere shall be entitled to recover from Jacor as Premiere's sole and
exclusive remedy liquidated damages in the amount of
<PAGE>
Page 37
$15,000,000 plus its reasonable attorneys fees and expenses incurred in
connection with collecting such liquidated damages. The parties acknowledge that
the liquidated damages provided for herein constitute a reasonable estimate of
the damages Premiere would incur.
ARTICLE 9
MISCELLANEOUS AND GENERAL
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties contained herein shall survive the Closing or the
termination of this Agreement. The covenants and agreements contained herein
shall survive the Closing.
9.2 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 the filing fee in connection with the
HSR Act filing shall be shared equally by Premiere and Jacor.
9.3 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 Jacor may
assign its rights under this Agreement to an Affiliate at any time and to a
non-Affiliate if Jacor, 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
Jacor's liability hereunder, including, without limitation, its obligation to
deliver the Stock Merger Consideration.
9.4 THIRD PARTY BENEFICIARIES. Except as set forth in Article 3 and
Sections 6.8 and 7.1(b)(each 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; provided, however, that no person shall
have third party beneficiary or other rights under Article 3 of this Agreement
if the Merger has not been consummated, regardless of the reason that the Merger
has not been consummated), 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.
9.5 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 Jacor,
Communications or any
Acquisition Corp.: Paul F. Solomon
<PAGE>
Page 38
Jacor Communications, Inc.
50 East RiverCenter Boulevard
Twelfth Floor
Covington, Kentucky 41011
Facsimile: (606) 655-9356
with a copy to: Scott J. Davis
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
If to Premiere: Stephen C. Lehman
President and Chief Executive Officer
Premiere Radio Networks, Inc.
15260 Ventura Boulevard
Fifth Floor
Sherman Oaks, California 91403-5339
Facsimile: (818) 377-5330
with copies to: Kenin M. Spivak
Co-Chairman of the Executive Committee
Premiere Radio Networks, Inc.
15260 Ventura Boulevard
Fifth Floor
Sherman Oaks, California 91403-5339
Facsimile: (818) 385-3662
and
Gary N. Jacobs
Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro
2121 Avenue of the Stars
Suite 1800
Los Angeles, California 90067
Facsimile: (310) 556-2920
and Richard V. Sandler, Esq.
Maron & Sandler
844 Moraga Drive
Los Angeles, CA 90049
Facsimile: (310) 440-3690
or to such other address with respect to a party as such party shall notify the
other parties in writing as above provided.
9.6 COMPLETE AGREEMENT. This Agreement and the other documents and
agreements delivered by the parties in connection herewith contain the complete
<PAGE>
Page 39
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; provided,
however, that the Confidentiality Agreement shall remain in full force and
effect.
9.7 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.
9.8 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. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
9.9 WAIVER. At any time prior to the Effective Time, the parties hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto, or
(c) waive compliance with any of the agreements or conditions contained herein,
to the extent permitted by applicable law. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
writing signed on behalf of such party.
9.10 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its rules of conflict of laws.
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 CONSENT TO JURISDICTION. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Delaware and of the United States of America
located in the State
<PAGE>
Page 40
of Delaware (the "Delaware Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such Delaware Courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.
9.14 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
JACOR COMMUNICATIONS, INC.
By: /s/Jerome L. Kersting
-------------------------------
Name: Jerome L. Kersting
Title: Senior Vice President
JACOR COMMUNICATIONS COMPANY
By: /s/Jerome L. Kersting
-------------------------------
Name: Jerome L. Kersting
Title: Senior Vice President
PRN HOLDING ACQUISITION CORP.
By: /s/Jerome L. Kersting
-------------------------------
Name: Jerome L. Kersting
Title: Senior Vice President
PREMIERE RADIO NETWORKS, INC.
By:
Name:
Title:
<PAGE> Page 1
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "AGREEMENT") is made and entered into as
of April 7, 1997 by and among (i) Jacor Communications, Inc., a Delaware
corporation ("JACOR"), and its wholly-owned subsidiary, Jacor Communications
Company, a Florida corporation ("COMMUNICATIONS"), on the one hand, and (ii)
Archon Communications Inc., a Delaware corporation ("ACI"), both in its
individual capacity and as Proxy (as defined below), the stockholders of ACI,
namely, Archon Communications Partners LLC, a California limited liability
company, and News America Holdings, Incorporated, a Delaware corporation (each
an "ARCHON SHAREHOLDER" and collectively the "ARCHON SHAREHOLDERS"), and each of
the other shareholders of Premiere signatory hereto (each an "INSIDER" and
collectively the "INSIDERS"), on the other hand. ACI, the Archon Shareholders
and the Insiders are each referred to herein individually as a "SHAREHOLDER" and
are referred to herein collectively as the "SHAREHOLDERS".
a. Jacor, Communications and PRN Holding Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Communications
("ACQUISITION CORP."), on the one hand, and Premiere Radio Networks,
Inc., a Delaware corporation ("PREMIERE"), on the other hand, have
entered into that certain Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of even date herewith, pursuant to which
Acquisition Corp. will merge with and into Premiere (the "MERGER"),
with the stockholders of Premiere to receive a combination of shares
of Common Stock of Jacor (the "JACOR STOCK") and cash in exchange for
their shares of Common Stock and/or Class A Common Stock of Premiere
(collectively, the "PREMIERE STOCK").
b. ACI is currently the owner of shares of Premiere Stock and
options and warrants to purchase Premiere Stock.
c. Under the Voting Trust Proxy and Voting Agreement (the "TRUST
PROXY AGREEMENT"), dated as of July 28, 1995, by and among the
Insiders and ACI, each Insider appointed ACI, with full power of
substitution, as such Insider's attorney and proxy (ACI acting in such
capacity being referred to herein as the "TRUST PROXY") to vote, and
to express consent or dissent to corporate action in writing without a
meeting with respect to, the shares of Premiere Stock owned by such
Insider listed on Schedule A to the Trust Proxy Agreement ("TRUST
SHARES") subject to that certain voting trust (the "VOTING TRUST")
created pursuant to that certain Voting Trust Agreement (the "VOTING
TRUST AGREEMENT"), dated as of July 28, 1995, by and among U.S. Trust
Company of California, N.A., not in its individual capacity but solely
as trustee of the Voting Trust ("TRUSTEE"), ACI and the Insiders, on
all matters on which such Insider is entitled to vote at a meeting of
the shareholders of Premiere, and in all proceedings in which
<PAGE> Page 2
the vote or consent, written or otherwise, of the holders of the Trust
Shares may be required or authorized by law. Pursuant to the Voting
Trust Agreement, the Trustee is required to vote such Trust Shares in
accordance with the determination of the holders of more than 50% of
the voting power of such Trust Shares.
d. Under the Stockholders Voting Agreement and Proxy (the "VOTING
AGREEMENT"), dated as of July 28, 1995, by and among the Insiders and
ACI, each Insider appointed ACI, with full power of substitution, as
attorney and proxy (ACI acting in such capacity being referred to
herein as the "VOTING PROXY" and ACI acting both in such capacity and
as the Trust Proxy being referred to herein as the "PROXY") to vote
the shares of Premiere Stock owned by such Insider listed on Schedule
A to the Voting Agreement (which shares are not subject to the Voting
Trust Agreement) and any shares of voting capital stock issued with
respect thereto (such existing shares and any such new shares being
collectively referred to herein as the "PROXY SHARES") on all matters
as to which such Insider is entitled to vote at a meeting of the
shareholders of Premiere, or to which they are entitled to express
consent or dissent to corporate action in writing without a meeting,
in the Voting Proxy's absolute and sole discretion.
e. Each of the Trustee and the Proxy is obligated to vote all Trust
Shares and Proxy Shares, as the case may be, in accordance with that
certain Stockholders Agreement ("STOCKHOLDERS AGREEMENT"), dated as of
July 28, 1995, by and among Premiere, ACI and the Insiders, which
Stockholders Agreement restricts the transfer of the shares of
Premiere Stock owned by the Shareholders (including by operation of
law) except in accordance with the terms and conditions of such
Stockholders Agreement.
f. A condition precedent to the Merger is the acquisition of all of
the outstanding shares of Common Stock of ACI (the "ACI STOCK") by
Communications in exchange for a combination of shares of Jacor Stock
and cash pursuant to the Stock Purchase Agreement, dated as of even
date herewith, between Jacor and Communications, on the one hand, and
the Archon Shareholders, on the other (the "STOCK PURCHASE
AGREEMENT").
g. As a condition to their willingness to enter into the Merger
Agreement and the Stock Purchase Agreement, Jacor and Communications
have required that each Shareholder enter into, and each such
Shareholder has agreed to enter into, this Agreement.
NOW, THEREFORE, in consideration of the foregoing, for good and valuable
consideration, the parties hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF ACI AND THE ARCHON SHAREHOLDERS.
<PAGE> Page 3
Each of ACI, both in its individual capacity and as the Proxy (except that (x)
the representations and warranties set forth in SECTIONS 1(a)(i) and 1(b) are
made by ACI solely in its individual capacity and (y) the representations and
warranties set forth in SECTION 1(c) are made by ACI solely in its capacity as
the Proxy) and each Archon Shareholder hereby, jointly and severally represents
and warrants to Jacor and Communications as follows:
(a) AUTHORITY; NO VIOLATION. Each of ACI and each such Archon
Shareholder has all necessary power and authority to enter into and perform
its respective obligations hereunder. The execution, delivery and
performance of this Agreement by each of ACI and each such Archon
Shareholder will not (i) violate its certificate of incorporation, bylaws
or other similar governing documents, (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 of its property or assets pursuant to, any note,
bond, mortgage, indenture, license, agreement, lease, voting agreement,
shareholders' agreement, trust agreement, voting trust or other instrument,
contract or obligation to which it is a party (including the Proxy
Agreements as defined below) or by which its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to it. This Agreement has been duly and validly
executed and delivered by ACI (including ACI acting hereunder in its
capacities as the Proxy) and each such Archon Shareholder and constitutes a
valid and binding agreement of ACI (including ACI acting hereunder in its
capacities as the Proxy) and each such Archon Shareholder enforceable
against it in accordance with its terms.
(b) OWNERSHIP OF SHARES. ACI is the beneficial owner holder of the
number and class of shares of Premiere Stock indicated under ACI's name on
Schedule 1(b) hereto (the "ACI EXISTING SHARES," and together with any
shares of Premiere Stock acquired by ACI after the date hereof, the "ACI
SHARES") and, as of the date hereof, the ACI Existing Shares constitute all
the outstanding shares of Premiere Stock owned of record or beneficially by
ACI. Schedule 1(b) lists the record owner of any ACI Existing Shares of
which ACI is not the record owner, the number of such shares and whether a
Consent (as defined in Section 3(a)) can be delivered immediately with
respect to those shares. ACI has with respect to the ACI Existing Shares,
and at all times between the date of this Agreement and the consummation of
the Merger will have with respect to the ACI Shares, good and valid title
to such ACI Shares, free and clear of any liens, charges, encumbrances,
ownership interests or claims of any third parties. Except as disclosed on
Schedule 1(b), there are no options or rights to acquire, or any agreements
to which ACI or any Archon Shareholder is a party relating to, any ACI
Shares, other than this Agreement. With respect to the ACI Existing
Shares, ACI has sole voting power and sole power to issue instructions with
respect to the matters set forth in SECTION 3 hereof, sole power of
disposition, sole power to demand appraisal rights and sole power to engage
in the actions set forth in SECTION 3 hereof, with no restrictions on the
voting rights, rights of disposition or
<PAGE> Page 4
otherwise, except in each of the foregoing cases for such restrictions as
are set forth in the respective agreements referred to herein, all of which
are being waived to the extent set forth elsewhere herein.
(c) AUTHORITY OF THE PROXY. With respect to the Trust Shares and the
Proxy Shares, the Proxy has sole voting power and sole power to issue
instructions with respect to the matters set forth in SECTION 3 hereof,
sole power to demand appraisal rights and sole power to engage in the
actions set forth in SECTION 3 hereof, with no restrictions on such voting
rights, rights of disposition or otherwise, except as expressly stated
herein.
2. REPRESENTATIONS AND WARRANTIES OF THE INSIDERS. Each Insider hereby,
severally only and not for one another or jointly, represents and warrants to
Jacor and Communications as follows:
(a) AUTHORITY; NO VIOLATION. Such Insider has all necessary power
and authority to enter into and perform all of such Insider's obligations
hereunder. The execution, delivery and performance of this Agreement by
such Insider will not violate or conflict with, or constitute a violation
of or default under, any contract, commitment, agreement, arrangement or
restriction of any kind to which such Insider is a party or by which such
Insider is bound, including the Proxy Agreements, any voting agreement,
shareholders' agreement, trust agreement or voting trust. This Agreement
has been duly and validly executed and delivered by such Insider and
constitutes a valid and binding agreement of such Insider enforceable
against such Insider in accordance with its terms.
(b) OWNERSHIP OF SHARES. Such Insider is the beneficial owner holder
of the number and class of outstanding shares of Premiere Stock indicated
under such Insider's name on Schedule 2(b) hereto (the "INSIDER EXISTING
SHARES," and together with any shares of Premiere Stock acquired by such
Insider after the date hereof, the "INSIDER SHARES") and, as of the date
hereof, the Insider Existing Shares constitute all the outstanding shares
of Premiere Stock owned of record or beneficially by the Insider. Schedule
2(b) lists, with respect to each Insider, the record owner of the Insider
Existing Shares owned beneficially but not of record by that Insider, the
number of such shares, and whether a Consent (as defined in Section 3(a))
can be delivered immediately with respect to those shares. Such Insider
has with respect to the Insider Existing Shares, and at all times between
the date of this Agreement and the consummation of the Merger will have
with respect to the Insider Shares, good and valid title to such the
Insider Shares, free and clear of any liens. Except as disclosed on
Schedule 2(b), there are no options or rights to acquire, or any agreements
to which any Insider is a party relating to, any Insider Shares, other than
this Agreement. With respect to the Insider Existing Shares, subject to
applicable community property laws, such Insider has sole voting power and
sole power to issue instructions with respect to the matters set forth in
SECTION 3 hereof, sole power of disposition, sole power to demand appraisal
rights and sole power to engage in the actions set forth in SECTION 3
hereof, with no restrictions on the voting rights, rights of
<PAGE> Page 5
disposition or otherwise, except in each of the foregoing cases for such
restrictions as are set forth in the respective agreements referred to
herein, all of which are being waived to the extent set forth elsewhere
herein.
3. VOTING AGREEMENT, PROXY AND AGREEMENT NOT TO TRANSFER.
Notwithstanding anything to the contrary set forth in any of the
Stockholders Agreement, the Trust Proxy Agreement, the Voting Trust
Agreement and the Voting Agreement (collectively, the "PROXY AGREEMENTS"),
(a) Each Shareholder (except that the obligations in SECTION
3(a)(ii) and 3(a)(iii) are undertaken by the Insiders only) hereby
severally (i) instructs, empowers, authorizes and directs the Trustee to
vote the Trust Shares and to give written consent at all meetings of
shareholders of Premiere and in all proceedings in which the vote or
consent, written or otherwise, of the Shareholders may be required or
authorized by law, to approve, adopt and consent to the Merger Agreement
and the transactions contemplated thereby in the exercise of its duties as
Trustee under the Voting Trust Agreement; (ii) instructs, empowers,
authorizes and directs the Trust Proxy to instruct, empower, authorize and
direct the Trustee to vote the Trust Shares and to give written consent at
all meetings of shareholders of Premiere and in all proceedings in which
the vote or consent, written or otherwise, of the Shareholders may be
required or authorized by law, to approve, adopt and consent to the Merger
Agreement and the transactions contemplated thereby in the exercise of its
duties as Trustee under the Voting Trust Agreement; (iii) instructs,
empowers, authorizes and directs the Voting Proxy to vote the Proxy Shares
and to give written consent at all meetings of stockholders of Premiere and
in all proceedings in which the vote or consent, written or otherwise, of
the Shareholders may be required or authorized by law, to approve, adopt
and consent to the Merger Agreement and the transactions contemplated
thereby in the exercise of its duties as the Voting Proxy under the Voting
Agreement; (iv) approves, adopts and consents to the Merger, the Merger
Agreement, and the transactions contemplated thereby pursuant to Section
228 of the Delaware General Corporation Law and, with respect to the ACI
Existing Shares or Insider Existing Shares owned of record by that
Shareholder or as to which that Shareholder can cause a Consent (as defined
below) to be delivered immediately, further agrees to execute and deliver
(and instructs, empowers, authorizes and directs the Trustee and the Proxy
and, if appropriate, the record owner of such shares, to execute and
deliver), immediately following the execution of the Merger Agreement and
this Agreement, a written consent in the form attached hereto as EXHIBIT A
approving and consenting to the Merger, the Merger Agreement and the
transactions contemplated thereby to the Secretary of Premiere (a
"Consent"); (v) with respect to the ACI Existing Shares or Insider Existing
Shares owned beneficially but not of record by that Shareholder as to which
that Shareholder cannot cause a Consent to be delivered immediately, shall
cause a Consent to be executed and delivered to the Secretary of Premiere
(either by causing record ownership to be transferred to that Shareholder's
name or otherwise) as soon as
<PAGE> Page 6
practicable and in any event within 15 business days of the date of this
Agreement; and (vi) except with the prior written consent of Jacor and
Communications, agrees not to revoke any Consent once delivered and to vote
or cause to be voted all of such Shareholder's ACI Existing Shares or
Insider Existing Shares, as the case may be, beneficially owned or held by
such Shareholder (such shares, together with any shares of Premiere Stock
acquired by such Shareholder after the date hereof, being referred to
herein as the "SHARES") against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transactions, such as a merger, consolidation or
other business combination involving Premiere or its subsidiaries; (B) any
sale, lease or transfer of the assets of Premiere or its subsidiaries; (C)
any change in the board of directors of Premie
re; (D) any material change in the present capitalization of Premiere; (E) any
amendment of Premiere's Certificate of Incorporation or Bylaws; (F) any other
action which is intended, or could reasonably be expected to, impede, interfere
with, delay, postpone, discourage or adversely affect the contemplated economic
benefits to Jacor and Communications of the Merger or the transactions
contemplated by the Merger Agreement. Each Shareholder agrees that he or it
shall not enter into any agreement or understanding with any person or entity
that would be effective prior to the Termination Date (as defined in SECTION 6)
to vote or give instructions after the Termination Date in any manner
inconsistent with this SECTION 3(a).
(b) Each Shareholder hereby severally grants to Jacor and
Communications, and appoints (and instructs, empowers, authorizes and
directs the Trustee and the Proxy to appoint) Jerome Kersting, Paul Solomon
and Christopher Weber of Jacor, in their respective capacities as officers
of Jacor, and any individual who shall succeed to any such office of Jacor,
and any other designee of Jacor, and each of them, as such Shareholder's
irrevocable proxy and attorney-in-fact (with full power of substitution and
resubstitution) to vote the Shares with respect to the Merger, the Merger
Agreement and the transactions contemplated thereby, in the event that
Jacor determines that any further shareholder vote or consent is required
or advisable in order to consummate the Merger and the transactions
contemplated thereby. Such Shareholder intends this proxy to be
irrevocable and coupled with an interest, and will take such further action
and execute such other instruments as may be necessary to effectuate the
intent of this proxy and hereby revokes any proxy previously granted by
such Shareholder with respect to the Shares.
(c) Each Shareholder hereby severally agrees not to sell, transfer,
assign, grant an option or other rights to acquire, or otherwise dispose of
any of his or her Shares without the prior written consent of Jacor and
Communications. Any permitted transferee of Shares must become a party to
this Agreement and any purported transfer of Shares to a person or entity
that has not become a party hereto shall be null and void.
4. COOPERATION. Until the earlier of the Termination Date or the Merger:
Each Shareholder severally agrees that it will not, and will use such
Shareholder's best efforts as a shareholder to cause Premiere not to, (i)
directly or indirectly solicit any inquiries or proposals from any person
relating to any proposal or transaction for the disposition of the business or
assets of Premiere or any of its subsidiaries, or the acquisition of or tender
or exchange offer for voting securities of Premiere or any subsidiary of
Premiere or any business combination between Premiere or any subsidiary of
Premiere and any person other than Jacor, Communications or Acquisition Corp.
(collectively, a "COMPETING TRANSACTION"), or (ii) furnish to any other person
any nonpublic information or access to such information with respect to or
otherwise concerning a Competing Transaction. Each Shareholder agrees to
immediately cease and cause to be terminated any existing discussions or
negotiations with any third parties conducted heretofore with respect to any
Competing Transaction. Each Shareholder will promptly disclose to Jacor and
<PAGE> Page 7
Communications the identity of any person who attempts to initiate discussions
contemplating a Competing Transaction and a description of the terms of the
proposed Competing Transaction.
5. INSIDER CAPACITY. Each Insider is entering into this Agreement in his
or her capacity as the record or beneficial owner of such Insider's Shares, and
not in his or her capacity as a director or officer of Premiere, except as
expressly stated herein. To the extent that the Shares constitute community
property, all references herein to "Insider" shall also include such Insider's
spouse.
6. TERMINATION. The obligations of the parties hereunder shall terminate
upon the termination of the Merger Agreement pursuant to Section 8.1 thereof.
The date on which such termination occurs is referred to herein as the
"TERMINATION DATE".
7. PROXY AGREEMENTS. Notwithstanding anything to the contrary in the
Proxy Agreements, each Shareholder hereby severally acknowledges, agrees and
consents to the termination of all of the Proxy Agreements on and as of the
Closing (as defined in the Merger Agreement) and further agrees to execute and
deliver any such further document or agreement as Jacor and Communications shall
reasonably consider to be desirable to evidence such termination.
8. SPECIFIC PERFORMANCE. Each Shareholder acknowledges that damages
would be an inadequate remedy to Jacor and Communications for an actual or
prospective breach of this Agreement and that the obligations of each of the
Shareholders hereto shall be specifically enforceable.
9. MISCELLANEOUS.
(a) DEFINITIONAL MATTERS.
(i) Unless the context otherwise requires, "person" shall
mean a corporation, association, partnership, joint venture,
organization, business, individual, trust, estate or any other entity
or group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended).
(ii) All capitalized terms used but not defined in this
Agreement shall have the respective meanings that the Merger Agreement
ascribes to such terms.
(iii) 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.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between 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, or any of them, with respect to the
subject matter hereof.
<PAGE> Page 8
(c) PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors, assigns, heirs, executors, administrators and other legal
representatives. Nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any
nature whatsoever under or by reason of this Agreement.
(d) ASSIGNMENT. This Agreement shall not be assigned without the
prior written consent of the other party hereto, except that Jacor and
Communications may assign, in their sole discretion, all or any of their
rights, interests and obligations hereunder to any direct or indirect
wholly-owned subsidiary of Jacor.
(e) MODIFICATIONS. This Agreement shall not be amended, altered or
modified in any manner whatsoever, except by a written instrument executed
by the parties hereto.
(f) GOVERNING LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware (without giving effect to the provisions thereof relating to
conflicts of law).
(g) VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
(h) 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.
(i) NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing and shall be deemed duly given upon
(i) transmitter's confirmation of a receipt of a facsimile transmission,
(ii) confirmed delivery by a standard overnight carrier or (iii) the
expiration of five business days after the day when mailed by certified or
registered mail, postage prepaid, addressed at the following addresses (or
at such other address as the parties hereto shall specify by like notice):
If to Jacor or Communications:
Jacor Communications, Inc.
50 East RiverCenter Boulevard
Twelfth Floor
Covington, Kentucky 41011
Attention: Paul Solomon
With courtesy copies to:
<PAGE> Page 9
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Scott J. Davis, Esq.
If to any of the Shareholders, to the respective addresses noted on the
signature page hereto.
10. FURTHER ASSURANCES. Each Shareholder shall execute and deliver all
such further documents and instruments, including additional consents and
proxies with respect to such Shareholder's Shares, and take all such further
actions as may be necessary or appropriate in the reasonable judgment of Jacor
and Communications in order to evidence the agreements of, and grant of proxies
by such Shareholder set forth herein and consummate the transactions
contemplated hereby.
11. CONSENT. The Shareholders hereby consent to the execution and
delivery by Archon Communications Inc. of the Stock Purchase Agreement referred
to in the Merger Agreement and providing for the purchase of the outstanding
stock of Archon by Jacor.
12. CONSENT TO JURISDICTION. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Delaware and of the United States of America
located in the State of Delaware (the "DELAWARE COURTS") for any litigation
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such Delaware Courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in an
inconvenient forum.
13. EMPLOYMENT AND OPTION AGREEMENTS. Steven Lehman, Timothy Kelly and
Kraig Kitchin agree (i) to execute Employee Option Agreements (as defined in the
Merger Agreement) immediately after the execution of this Agreement, and (ii) to
use their reasonable best efforts to comply with and keep in full force and
effect their respective Employment Agreement (as defined in the Merger
Agreement).
14. INDEMNITY. (a) So long as this Agreement has not been terminated,
Jacor shall, or after the Effective Time, shall cause Premiere to, indemnify and
hold harmless the Shareholders and the present or former employees, agents,
officers or directors of the Shareholders (the "Shareholder Indemnified
Parties") from any and all damages, losses, interest, liabilities, costs and
expenses (including attorneys' fees and expenses), net of any amounts recovered
from applicable insurance, incurred or suffered by the Shareholder Indemnified
Parties solely in their capacity as shareholders (or representative of
shareholders) of Premiere as a result of a third party claim asserting that the
agreements of the Shareholders in Section 3(a) of this Agreement are
<PAGE> Page 10
unlawful provided, that the parties shall use their reasonable best efforts
through subrogation or other methods to preserve the ability of any party or
Premiere to recover under applicable insurance policies. The parties
acknowledge that the obligations pursuant to this Section 14 shall continue
after the Effective Time.
(b) If any lawsuit, enforcement action, or other claim is filed or made
against the Shareholder Indemnified Parties (a "Third-Party Claim") and is
covered by the indemnity set forth in (a) above, written notice thereof (the
"Third-Party Claim Notice") shall be given to Jacor as promptly as practicable
(and in any event within ten (10) calendar days after the receipt of such
Third-Party Claim; provided that failure to give such notice shall not affect
the indemnity provided herein unless Jacor can demonstrates it was materially
prejudiced as a consequence of such failure). After the receipt of such
Third-Party Claim Notice, Jacor shall be entitled, upon written notice to the
Shareholder Indemnified Parties, if Jacor so elects and at Jacor's sole cost,
risk, and expense: (i) to take control of the defense and investigation of such
Third-Party Claim, (ii) to employ and engage attorneys of its own choice,
subject to the reasonable approval of the Shareholder Indemnified Parties to
handle and defend the same, and (iii) to compromise or settle such Third-Party
Claim, which compromise or settlement shall be made only with the written
consent of the Shareholder Indemnified Parties, such consent not to be
unreasonably withheld. If Jacor does elect to take control of the defense of a
Third-Party Claim, the Shareholder Indemnified Parties shall fully cooperate in
the defense of such Third-Party Claim. If the Shareholder Indemnified Parties
do not elect to take control of the defense of a Third-Party Claim, Jacor may
not compromise or settle such Third-Party Claim without the consent of the
Shareholder Indemnified Parties, such consent not to be unreasonably withheld.
<PAGE> Page 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JACOR COMMUNICATIONS, INC.
By: /s/ Jerome L. Kersting
---------------------------
Title: Senior Vice President
------------------------
JACOR COMMUNICATIONS COMPANY
By: /s/ Jerome L. Kersting
---------------------------
Title: Senior Vice President
------------------------
<PAGE> Page 12
ARCHON COMMUNICATIONS INC.
both in its individual capacity and as the Proxy
By: /s/ Kenin Spivak
---------------------------
Kenin Spivak
Title: President
------------------------
Address for Notices:
c/o Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
<PAGE> Page 13
ARCHON COMMUNICATIONS PARTNERS
LLC
By: /s/ Richard Sandler
---------------------------
Richard Sandler
Title: Manager
------------------------
Address for Notices:
c/o Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
NEWS AMERICA HOLDINGS, INC.
By: /s/ Chase Carey
---------------------------
Chase Carey
Title: Executive Vice President
--------------------------
Address for Notices:
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
<PAGE> Page 14
INSIDERS:
/s/ Steven Lehman
------------------------------
STEVEN LEHMAN
Address for Notices:
25742 Simpson Place
Calabasas, California 91302
Spouse: /s/ Stephanie Lehman
----------------------
Typed Name: Stephanie Lehman
/s/ Louise Palanker
------------------------------
LOUISE PALANKER
Address for Notices:
3742 Beverly Ridge Drive
Sherman Oaks, California 91423
/s/ Timothy Kelly
------------------------------
TIMOTHY KELLY
Address for Notices:
23547 Schoenborn Street
West Hills, California 91304
Spouse:/s/ Evelyn Kelly
---------------------
Typed Name: Evelyn Kelly
/s/ Kraig T. Kitchin
--------------------------
KRAIG T. KITCHIN
Address for Notices:
4231 Hunt Club Lane
<PAGE> Page 15
West Lake Village, CA 91361
Spouse:/s/ Lisa Kitchin
--------------------
Typed Name: Lisa Kitchin
<PAGE> Page 16
PREMIERE CONSENT
----------------
Notwithstanding the Stockholders Agreement, Premiere Radio Networks, Inc.
("PREMIERE") hereby consents and agrees to the execution and delivery of the
attached Shareholders' Agreement by each of the above Shareholders of Premiere
and agrees to be bound by the terms thereof.
PREMIERE RADIO NETWORKS, INC.
By: /s/ Daniel M. Yukelson
---------------------------------
Name: Daniel M. Yukelson
-------------------------------
Title: Vice President/Finance
and Chief Financial Officer
------------------------------
<PAGE> Page 17
TRUSTEE ACKNOWLEDGEMENT
-----------------------
U.S. Trust Company of California, N.A., not in its individual capacity
but solely as trustee ("TRUSTEE") under that certain Voting Trust Agreement,
dated as of July 28, 1995, by and among Trustee and certain stockholders of
Premiere Radio Networks, Inc., a Delaware corporation, hereby acknowledges
receipt of a copy of the attached Shareholders' Agreement and agrees to vote
on all matters as instructed in such Agreement and to sign the form of
consent attached hereto as Appendix 1 as instructed by such Shareholders'
Agreement in the exercise of its duties as Trustee under the Voting Trust
Agreement.
U.S. TRUST COMPANY OF
CALIFORNIA, N.A.,
not in its individual capacity but
solely as Trustee
By: /s/ D. Young
---------------------------
Name: D. Young
-------------------------
Title: Assistant Vice President
------------------------
<PAGE> Page 18
EXHIBIT A
WRITTEN CONSENT
OF
SHAREHOLDERS
OF
PREMIERE RADIO NETWORKS, INC.
The undersigned shareholders of Premiere Radio Networks, Inc., a Delaware
corporation ("PREMIERE"), without the formality of a meeting, do hereby approve,
adopt and consent to, pursuant to Section 228 of the Delaware General
Corporation Law, that certain Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of April 7, 1997, between Jacor Communications, Inc. a
Delaware corporation ("JACOR"), its wholly-owned subsidiary Jacor Communications
Company, a Florida corporation ("COMMUNICATIONS"), and PRN Holding Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Communications
("PRN"), on the one hand, and Premiere, on the other, whereby PRN will merge
with and into Premiere, with the stockholders of Premiere to receive a
combination of shares of Common Stock of Jacor and cash in exchange for their
shares of Common Stock and/or Class A Common Stock of Premiere as provided in
the Merger Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Written Consent as
of the dates indicated below.
/s/ Kraig Kitchin
- ---------------------
Kraig Kitchin
Dated: April 7, 1997
--------------
NUMBER OF SHARES
Common Stock: 107,660
Class A Common Stock: 53,830
Address for Notices: 4231 Hunt Club Lane
West Lake Village, CA 91361
Spouse: /s/ Lisa Kitchin
----------------------
Typed Name: Lisa Kitchin
------------------
<PAGE> Page 19
APPENDIX 1
WRITTEN CONSENT
OF
TRUSTEE
U.S. Trust Company of California, N.A., not in its individual capacity but
solely as trustee ("TRUSTEE"), under that certain Voting Trust Agreement (the
"Agreement"), dated as of July 28, 1995, by and among Trustee and certain
stockholders of Premiere Radio Networks, Inc., a Delaware corporation
("PREMIERE"), without the formality of a meeting, does, with respect to all
shares of Common Stock or Class A Common Stock subject to the Agreement, hereby
approve, adopt and consent to, pursuant to Section 228 of the Delaware General
Corporation Law, that certain Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of April 7, 1997, between Jacor Communications, Inc. a
Delaware corporation ("JACOR"), its wholly-owned subsidiary Jacor Communications
Company, a Florida corporation ("COMMUNICATIONS"), and PRN Holding Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Communications
("PRN"), on the one hand, and Premiere, on the other, whereby PRN will merge
with and into Premiere, with the stockholders of Premiere to receive a
combination of shares of Common Stock of Jacor and cash in exchange for their
shares of Common Stock and/or Class A Common Stock of Premiere as provided in
the Merger Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Written Consent as of
the date indicated below.
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity
but solely as Trustee
By: /s/ D. YOUNG
------------------------------
Name: D. YOUNG
----------------------------
Title: Assistant Vice President
---------------------------
Dated: April 7, 1997
-------------
<PAGE>
Page 1
-------------------------------------------------
STOCK PURCHASE AGREEMENT
among
JACOR COMMUNICATIONS, INC.,
JACOR COMMUNICATIONS COMPANY, as Purchaser
and
ARCHON COMMUNICATIONS PARTNERS LLC, as Seller
and
NEWS AMERICA HOLDINGS, INCORPORATED, as Seller
and
THE NEWS CORPORATION LIMITED, as Indemnitor
Dated as of April 7, 1997
-------------------------------------------------
<PAGE>
Page 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into as of April 7,
1997 among JACOR COMMUNICATIONS, INC., a Delaware corporation ("JACOR"), and
JACOR COMMUNICATIONS COMPANY, a Florida corporation (the "PURCHASER"), on the
one hand, and ARCHON COMMUNICATIONS PARTNERS LLC, a California limited liability
company ("ACP"), and NEWS AMERICA HOLDINGS, INCORPORATED, a Delaware corporation
("NEWS AMERICA"), a wholly owned subsidiary of News Corporation (as defined
below), on the other (ACP and News America being collectively referred to herein
as the "SELLING ENTITIES") and THE NEWS CORPORATION LIMITED, a corporation
organized under the laws of Australia ("News Corporation"), with reference to
the following facts:
1. All of the issued and outstanding stock of the Purchaser is owned
by Jacor. Concurrently herewith, Jacor, the Purchaser and PRN HOLDING
ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary
of Purchaser, are entering into an Agreement and Plan of Merger (the
"MERGER AGREEMENT") with PREMIERE RADIO NETWORKS, INC., a Delaware
corporation ("PREMIERE"). The acquisition of Premiere by Jacor
provided for in the Merger Agreement is to be accomplished through a
merger (the "MERGER") of a newly organized subsidiary of the Purchaser
with and into Premiere, in which Merger, among other things, Premiere
will be the surviving corporation but the currently outstanding shares
of stock of Premiere will, with certain exceptions, be exchanged for
and converted into a combination of cash and shares of the common
stock, no par value, of Jacor ("JACOR SHARES").
2. ACP and News America are each holders of the common stock of
Archon Communications Inc., a Delaware corporation ("ARCHON"), and
together constitute the holders of all of the outstanding Archon
Common Stock. The principal assets of Archon consist of shares of
Premiere Stock and Premiere Warrants (each as defined herein).
3. To facilitate the Merger, Jacor desires to acquire Archon through
the purchase of all of the issued and outstanding stock of Archon by
the Purchaser on the terms and subject to the conditions set forth in
this Agreement, and the Seller desires that such stock be sold on such
terms and subject to such conditions.
THEREFORE, the parties hereto agree as follows:
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ARTICLE I.
PURCHASE AND SALE
1.1 AGREEMENT OF PURCHASE AND SALE.
On the terms and subject to the conditions set forth in this Agreement, the
Purchaser agrees to purchase, and each of the Selling Entities agrees to sell to
the Purchaser, all of the shares of Archon Common Stock held by them (the
"SHARES"), which Shares shall constitute all of the issued and outstanding
shares of Archon Common Stock (as defined in Section 2.4 below).
1.2 PURCHASE CONSIDERATION; MANNER OF PAYMENT.
(a) The aggregate purchase consideration that shall be paid by the
Purchaser for the Shares (the "PURCHASE CONSIDERATION") shall be payable in a
combination of cash and Jacor Shares, the respective aggregate amounts and
proportions of which shall be determined in accordance with the following:
(i) Solely for purposes of calculating the respective
amounts of cash and Jacor Shares that shall together comprise the Purchase
Consideration hereunder, and not as a statement of the intended aggregate
value thereof, a "PRESUMED PREMIERE SHARE AMOUNT" (as defined in SECTION
1.2(b) below) shall first be determined.
(ii) The Purchase Consideration shall consist of (i) the
aggregate amounts of cash and Jacor Shares that would be payable as the
"Merger Consideration" (as such term is defined in the Merger Agreement)
for the Presumed Premiere Share Amount in the Merger, plus (ii) an amount
of cash equal to the amount, if any, of cash and cash equivalents held by
Archon as of the Closing Date that exceeds the amount of cash necessary to
pay liabilities of Archon as provided in SECTION 4.2(b) below.
(iii) The respective amounts of cash and Jacor Shares
comprising the Purchase Consideration shall be paid and issued as
designated in the written notice from the Selling Entities specified in
Section 1.2(a)(iv).
(iv) All references to "dollars" herein shall mean U.S.
dollars and all amounts that are to be paid in cash shall be paid through
wire transfer of federal or other immediately available U.S. dollar funds
to such accounts as the Selling Entities shall specify in a notice (the
"Notice") to the Purchaser not later than two days prior to the Closing.
Certificates for Jacor Shares that are part of the Purchase Consideration
will be issued in the names specified, and to the persons specified, by the
Selling Entities in the Notice.
(b) For purposes of the calculations and determinations provided for in
SECTION 1.2(a) above, "PRESUMED PREMIERE SHARE AMOUNT" shall mean the aggregate
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number of Premiere Shares (as such term is defined in the Merger Agreement) that
equals the sum of the respective amounts calculated as indicated below:
(i) The aggregate number of shares of Premiere Common Stock
and Premiere Class A Common Stock (each as defined in SECTION 2.5(a) below)
held of record by Archon as of the Closing Date; and
(ii) The sum of the amounts determined by multiplying the
respective numbers of shares issuable upon exercise of each of the Premiere
Warrants (as defined in SECTION 2.5(a) below) held of record by Archon as
of the Closing Date by the "Spread Factor" applicable to each such Premiere
Warrant, with the "SPREAD FACTOR" of each such Premiere Warrant being
determined as the quotient obtained by dividing (A) the difference between
the Presumed Premiere Stock Price (as defined below) and the per share
exercise price of such Premiere Warrants by (B) the Presumed Premiere Stock
Price. For purposes of the preceding sentence, the PRESUMED PREMIERE STOCK
PRICE shall be the Jacor Closing Price (as such term is defined in the
Merger Agreement) multiplied by the Exchange Ratio (as such term is defined
in the Merger Agreement).
1.3 CLOSING. The respective deliveries of Purchase Consideration and
documents, and the taking of all other actions necessary to complete the
purchase and sale transaction provided for in this Agreement (the "CLOSING"),
shall take place immediately prior to the Merger on the date (referred to herein
as the "CLOSING DATE") that is the same date as the Closing Date under the
Merger Agreement, and the Closing shall be held at the offices of Mayer, Brown &
Platt located at 190 South LaSalle Street, Chicago, Illinois. The Merger shall
not take place until and unless the Closing has been completed.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES
Each of the Selling Entities, for itself alone and not one for the other,
hereby represents and warrants to Jacor and the Purchaser as follows:
2.1 ORGANIZATION AND RELATED MATTERS.
(a) Each of the Selling Entities and Archon (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, (ii) has all requisite power and authority to
carry on its businesses as now conducted, and (iii) is qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
such qualification is necessary under applicable law, except to the extent that
the failure to have such power or authority or to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on it.
For purposes of this Agreement, the term "Material Adverse Effect" means,
with
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respect to Archon, either of the Selling Entities or Jacor, as the case may be,
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.
2.2 NON-CONTRAVENTION; BINDING EFFECT.
(a) The Selling Entities each have all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly and validly authorized, executed and
delivered by each of the Selling Entities and constitutes the valid and legally
binding obligation of each of the Selling Entities or Archon, enforceable
against such parties in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the rights of creditors generally or by general equitable
principles, regardless of whether such enforcement is sought at law or in
equity.
(b) Neither the execution and delivery of this Agreement by the Selling
Entities, nor the consummation by any of them of the transactions contemplated
hereby will (i) conflict with or result in a breach of any provision of their
respective articles of incorporation, by-laws or other similar governing
documents, or (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 any
of them pursuant to, any note, bond, mortgage, indenture, license, agreement,
lease or other instrument, contract or obligation to which any of them is a
party or by which any of their properties or assets may be bound; or (iii)
subject to receipt of the requisite approvals referred to in Section
2.2(c), violate any order, writ, injunction, decree, statute, rule or regulation
applicable to any of the Selling Entities or Archon, or to any of their
respective properties or assets.
(c) Other than (i) such filings as are required under Federal or state
securities or "blue sky" laws and the rules and regulations thereunder, (ii)
notices and completion of waiting periods under the Hart-Scott-Rodino Antitrust
improvements Act of 1976 (the "HSR Act"), (iii) filings with the Secretary of
State of the State of Delaware under the DGCL required to effect the Merger,
(iv) in connection or compliance with the applicable requirements of the
Internal Revenue Code of 1986 (the "Code") and state, local and foreign tax
laws, and (v) 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 on Archon or Jacor, no notice to, filing with,
authorization of, exemption by or consent or approval of any Governmental
Authority (as defined in Section 2.3(b)) is necessary for the consummation by
Archon or the Selling Entities of the transactions contemplated in this
Agreement.
2.3 COMPLIANCE WITH LAWS.
(a) Archon has conducted its business in compliance with all laws,
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regulations, ordinances, permits, reporting and licensing requirements and
orders applicable to its business or properties or to any of its employees.
(b) Except as set forth in Schedule 2.3(b), Archon has timely filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that it was required to file with any governmental
or regulatory agencies, authorities, corporations, boards, commissions,
departments or other governmental instrumentalities (each a "GOVERNMENTAL
AUTHORITY"), and has paid all fees and assessments due and payable in connection
therewith. Archon has not received any notification from any Governmental
Authority asserting that it is not in compliance with any of the statutes,
regulations or ordinances that such Governmental Authority enforces.
2.4 CAPITALIZATION.
(a) Archon is authorized to issue 18,000 shares of Class A non-voting
common stock, par value $0.01 per share, and 2,000 shares of Class B voting
common stock, par value $0.01 per share (collectively, the "ARCHON COMMON
STOCK"). As of the date hereof, no shares of preferred stock of Archon are
authorized, issued or outstanding, 10,000 shares of Archon Common Stock,
consisting of 9,000 shares of Class A common stock and 1,000 shares of Class B
common stock, are issued and outstanding, of which ACP owns, both of record and
beneficially, 5,000 shares (consisting of 4,500 shares of Class A common stock
and 500 shares of Class B common stock) and News America owns, both of record
and beneficially, 5,000 shares (consisting of 4,500 shares of Class A common
stock and 500 shares of Class B common stock).
(b) As of the date hereof, no bonds, debentures, notes or other
indebtedness, having the right to vote on any matters on which stockholders of
Archon may vote ("VOTING DEBT"), are issued or outstanding and no such
securities are authorized for issuance by Archon.
(c) The Shares to be sold to the Purchaser pursuant to this Agreement
constitute, and will as of the Closing Date constitute, all of the issued and
outstanding shares of Archon Common Stock as of the date hereof. All of such
Shares (i) have been duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of any preemptive rights of any
person or entity, and (ii) are owned of record and beneficially solely by ACP
and News America in the respective amounts set forth in (a) above, with full
right on the part of each to transfer sole legal and beneficial ownership
thereof to the Purchaser as provided in this Agreement, free and clear of any
lien, charge, encumbrance, security interest, restriction or right or claim of
any third party. Except for those employee stock options listed and described
in Schedule 2.4 hereto, there are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or commitments obligating
Archon to issue, transfer from treasury, deliver or sell any additional shares
of capital stock or Voting Debt of Archon, and no unissued shares of Archon
Common Stock are subject to any preemptive rights of stockholders of Archon or
any other party. There are no
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outstanding contractual obligations of Archon to repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of or other ownership interests
in Archon.
2.5 ASSETS, BUSINESS AND LIABILITIES; SUBSIDIARIES.
(a) Except as disclosed in Schedule 2.5(a) hereto, the business activities
of Archon consist, and have since the initial organization of Archon consisted,
solely of the ownership of shares of Common Stock, par value $0.01 per share,
and Class A Common Stock, par value $0.01 per share (collectively, the "PREMIERE
STOCK") and classes of warrants to purchase Premiere Stock (the "PREMIERE
WARRANTS") as listed and described in Schedule 2.5(a) hereto, the provision of
services to Premiere pursuant to the Securities Purchase Agreement (as defined
in Section 7.1(a) hereof), all matters related to the Securities Purchase
Agreement and the exercise of Archon rights under the various agreements
relating to Premiere. Such Premiere Stock and Premiere Warrants, together with
the cash and cash equivalents and certain other nonmaterial assets also listed
and described in Schedule 2.5(a) hereto, constitute the sole assets of Archon.
Archon is the sole record and beneficial owner of such Premiere Stock and
Premiere Warrants, free and clear of any liens, charges, encumbrances,
restrictions or claims of any third party.
(b) Except as listed and described in Schedule 2.5(a) hereto, which
Schedule includes, among other things, a list and description of all contracts
and other agreements to which Archon is a party or to which Archon or any of its
assets are subject, after the Closing Archon will have no contractual or other
liabilities or obligations of any kind, whether absolute, contingent or
otherwise.
(c) Archon has no subsidiaries or other entities in which it has any
investment, other than the investment that Archon has in the Premiere Stock and
Premiere Warrants indicated in Schedule 2.5(a) hereto.
(d) Except for the investment of its cash and the purchase of the Premiere
Stock and the Premiere Warrants, Archon has never made any other investment and
has never entered into any binding agreement to make any other investment.
2.6 LITIGATION. Archon is not a party to or the subject of any legal or
administrative proceedings of any kind or nature now pending or, to the best
knowledge of the Selling Entities, threatened before any court or administrative
body. Archon is not in default with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality.
2.7 TAX MATTERS.
(a) NO LIENS, ETC. Archon has not incurred any liabilities for Taxes
other than in the ordinary course of business. There are no liens on account of
any Taxes (other than liens for current Taxes not yet due and payable) upon the
properties or assets of Archon. Archon has not granted or been requested to
grant any waiver of any statute of
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limitations applicable to the assessment or collection of any Taxes. For
purposes of this Agreement, the term "TAXES" shall include all federal, state,
county, local or foreign taxes, charges, levies, imposts or other assessments of
any nature whatsoever, including, without limitation, corporate income tax,
corporate franchise tax, payroll tax, sales tax, use tax, property tax, excise
tax, withholding tax, and environmental tax, together with any interest thereon
and any penalties or additions to tax relating thereto imposed by any
governmental taxing authority for which Archon may be directly or contingently
liable in its own right, as collection agent for Taxes imposed on another
person, as a result of any guaranty or election, or as a transferee of the
assets of, or as successor to, any Person. For purposes of establishing the
Estimated Tax Amount, Archon's liability for Taxes shall be estimated by
applying the book-closing method as described in SECTION 4.5(b) or the pro-rata
method as described in SECTION 4.5(c), as applicable.
(b) RETURNS; PAYMENT OF TAXES. Except as set forth in Schedule 2.7(b),
Archon has timely filed all federal, state and foreign corporate income and
franchise tax returns and all other filings, whether or not of returns, in
respect of Taxes as required by all applicable laws for all periods through and
including the Closing Date. Copies of all such returns and filings have been
provided to the Purchaser. All Taxes shown as due on all such returns and other
filings have been paid. Each such return and filing is true and correct.
Archon will not have any additional liability for Taxes with respect to any
return or other filing heretofore filed or which was required by law to be
filed, other than for amounts included in the Estimated Tax Amount (as defined
in Section 4.5(g)). None of the income tax returns or other filings of Archon
has ever been audited or investigated by any taxing authority, and no facts
exist which would constitute grounds for the assessment of any additional Taxes
by any taxing authority with respect to the taxable years covered by such
returns and filings. All Taxes which Archon is required by law to withhold or
collect, including, without limitation, payroll taxes and sales and use taxes,
have been duly withheld or collected, and, to the extent required, have been
paid over to the proper governmental authorities or are held in separate bank
accounts for such purpose.
(c) STATUS OF SELLING ENTITIES. Each Selling Entity represents that it is
not a "foreign person" as defined in SECTION 1445(f)(3) of the Internal Revenue
Code.
(d) DEFERRED ITEMS. Archon is not a party to and is not otherwise subject
to any arrangement having the effect of or giving rise to the recognition of a
deduction or loss in a taxable period ending on or before the Closing Date, and
a corresponding recognition of taxable income or gain in a taxable period ending
after the Closing Date, or any other arrangement that would have the effect of
or give rise to the recognition of taxable income or gain in a taxable period
ending after the Closing Date without the receipt of or entitlement to a
corresponding amount of cash.
(e) JOINT VENTURES, ETC. Archon is not a party to, or a partner or member
of, any joint venture, partnership, limited liability company, or other
arrangement or contract which is treated as a partnership for Federal income tax
purposes.
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(f) CONSOLIDATED AND COMBINED RETURNS. Archon has never been included in
any consolidated tax return for United states federal income tax purposes.
Archon has never been included in any combined report for California or other
state corporate franchise or income tax purposes, nor has Archon ever filed a
separate return for California or other state corporate franchise or income tax
purposes on which it treated itself as or reported that it was a member of a
unitary group for purposes of the California or other state corporate franchise
or income tax. Archon is not and has never been a party to any tax sharing
agreement.
(g) STATUS OF PROPERTY. None of the assets of Archon constitutes
tax-exempt bond financed property or tax-exempt use property within the meaning
of Section 168 of the Internal Revenue Code and none of its assets is subject to
a lease, safe harbor lease or other arrangement as a result of which Archon is
not treated as the owner of such asset for federal income tax purposes.
(h) CERTAIN PAYMENTS. Archon has not made or become obligated to make,
and will not as a result of any event connected with this Agreement or the
Merger Agreement or any other transaction contemplated herein become obligated
to make, any "excess parachute payment" as defined in Section 280G of the Code
(without regard to subsection (b)(4) thereof).
(i) NO SECTION 341(F) CONSENT. Archon has never filed a consent under
Section 341(f) of the Internal Revenue Code.
2.8 EMPLOYEE MATTERS. Archon has no more than seven employees. Except
for employment or consulting agreements set forth on Schedule 2.8 hereto,
neither Archon nor any of its ERISA Affiliates (as defined below) maintains, is
a party to, participates in or has any liability or contingent liability with
respect to (i) any employee benefit plan (as defined in section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended) or (ii) any
retirement or deferred compensation plan, incentive compensation plan, stock
plan, unemployment compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or any other fringe
benefit arrangements for any current or former employee, director, consultant or
agent, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an employee benefit plan. All of the
contracts and arrangements set forth on Schedule 2.8 hereto (the "Employee
Arrangements") can be terminated at or prior to the Closing without any cost or
liability to Archon and its ERISA Affiliates which would survive the Closing and
all such will be terminated by Archon as of the Closing. For purposes of this
Agreement, the term "ERISA Affiliate" means any person, corporation, trade or
business which, together with Archon, would be a member of a controlled group of
corporations or a group of trades or businesses under common control within the
meaning of sections 414(b), (c), (m) or (o) of the Code.
2.9 BROKER'S AND FINDER'S FEES. None of the Selling Entities or Archon
has any liability to any broker, finder, or similar agent, nor have any of them
agreed to pay any brokerage fee, finder's fee or commission with respect hereto
or to the transactions contemplated hereby that in any such case could result in
any obligation or liability of Jacor or the Purchaser.
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2.10 INFORMATION TRUE, COMPLETE AND CORRECT. None of the information
supplied by the Selling Entities or Archon in connection with the investigation
conducted by Jacor and the Purchaser of the businesses of Archon or to be filed
with any Governmental Authority in connection with the purchase and sale of the
Shares, or with any HSR filing by Premiere, Archon or the Selling Entities,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances in which they were made, not
misleading. Jacor and the Purchaser have been provided all such information and
full access to all such corporate books and records of Archon as they have
requested to date.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Jacor and the Purchaser represent and warrant to the Selling Entities as
follows:
3.1 ORGANIZATION AND RELATED MATTERS. Except where the failure to do so
would not prevent the consummation of the transactions contemplated under this
Agreement, (i) each of Jacor and the Purchaser is duly organized, validly
existing and in good standing under the jurisdiction of its incorporation and
(ii) each of Jacor and the Purchaser has all requisite corporate power and
authority to carry on its businesses as now conducted.
3.2 BINDING EFFECT. Each of Jacor and the Purchaser has all requisite
corporate power and authority to enter into this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly and validly authorized, executed and delivered by each
of Jacor and the Purchaser and constitutes the valid and legally binding
obligation of Jacor and the Purchaser, enforceable against each of Jacor and the
Purchaser in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the rights of creditors generally, or general equitable principles
regardless of whether such enforcement is sought at law or in equity.
3.3 INVESTMENT REPRESENTATIONS. The Purchaser is purchasing the Shares
pursuant to this Agreement solely for investment for its own account and not
with a view to any public distribution pursuant to the Securities Act of 1933
(the "SECURITIES ACT") thereof.
3.4 BROKER'S AND FINDER'S FEES. Neither Jacor nor the Purchaser has
engaged any broker, finder or similar agent, nor have any of them agreed to pay
or otherwise incurred any liability for any brokerage fee, finder's fee or
commission, with respect hereto or to the transactions contemplated hereby that
in any such case could result in any obligation or liability of the Selling
Entities.
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3.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) None of the execution and delivery of this Agreement by Jacor or the
Purchaser, nor the consummation by Jacor or the Purchaser of the transactions
contemplated herein, nor compliance by Jacor or the Purchaser with any of the
provisions hereof, will, except where the events set forth in clauses (i), (ii)
or (iii) below would not prevent the consummation of the transactions
contemplated in this Agreement, (i) conflict with or result in a breach of any
provision of the certificate of incorporation or by-laws or equivalent
organizational documents of Jacor or the Purchaser, (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 Jacor or the Purchaser or, 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 their
respective properties or assets may be subject, and that would, in any such
event, have a material adverse effect on Jacor, or (iii) subject to receipt of
the requisite approvals referred to in Section 3.5(b), violate any order, writ,
injunction, decree, statute, rule, or regulation of any Governmental Authority
applicable to Jacor or the Purchaser or any of their respective properties or
assets.
(b) Other than (i) such filings as are required under Federal or state
securities or "blue sky" laws and the rules and regulations thereunder, (ii)
notices and completion of waiting periods under the HSR Act, (iii) filings with
the Secretary of State of the State of Delaware under the DGCL required to
effect the Merger, (iv) in connection or compliance with the applicable
requirements of the Code and state, local, and foreign tax laws, and (v) where
the failure to give such notice, make such filing, or receive such order,
authorization, exemption, consent, or approval would not prevent the
consummation of the transactions contemplated under this Agreement, no notice
to, filing with, authorization of, exemption by or consent or approval of any
Governmental Authority is necessary for the consummation by Jacor or the
Purchaser of the transactions contemplated under this Agreement.
3.6 JACOR'S FINANCING. Jacor has or will have sufficient funds available
to consummate the transactions contemplated under this Agreement.
3.7 JACOR REPORTS. Jacor has filed all forms, reports and documents
required to be filed by it with the Commission since January 1, 1994,
(collectively, the "Jacor Reports") pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations promulgated thereunder. As of their respective dates, the Jacor
Reports (i) complied when filed as to form in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations
promulgated thereunder and (ii) did not when filed 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.
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(b) The consolidated balance sheets of Jacor and its subsidiaries as of
December 31, 1996 and December 31, 1995 and the related statements of
operations, changes in stockholders' equity and cash flows for each of the years
in the three-year period ended December 31, 1996, together with the notes
thereto, included in Jacor's Annual Reports on Form 10-K for the fiscal year
ended December 31, 1996, as filed with the Commission (together, with "Jacor
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 stockholders' equity and cash flows of Jacor
and its consolidated subsidiaries as of the dates and for the periods indicated.
3.8 SUITS. As of the date of this Agreement, there are no actions, suits
or proceedings instituted or pending, or to the actual knowledge of Jacor's
president ("Jacor's Knowledge"), overtly threatened, against Jacor, the
Purchaser or Acquisition Corp., or any of their respective subsidiaries or
against any property, asset, interest or right of any of them, or any of their
respective subsidiaries, that would have, either individually or in the
aggregate, a Material Adverse Effect on Jacor. None of Jacor or Communications
is subject to any judgment, order, writ, injunction or decree that would have a
Material Adverse Effect on Jacor.
3.9 COMPLIANCE. Jacor, the Purchaser and each subsidiary thereof:
(a) is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or employees conducting it
business, the breach or violation of which would have a Material Adverse Effect
on Jacor;
(b) has received no notification or communication from any Governmental
Authority (i) asserting that it or any of its 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 on
Jacor or (ii) threatening to revoke any license, franchise, permit or
authorization of any Governmental Authority, which revocation would have a
Material Adverse Effect on Jacor.
3.10 JACOR SHARES. When issued at the Closing, the Jacor Shares comprising
part of the Purchase Consideration will be duly issued, fully paid and
nonassessable.
ARTICLE IV.
COVENANTS OF THE SELLING ENTITIES AND THE PURCHASER
4.1 MUTUAL COVENANTS OF THE PURCHASER AND THE SELLING ENTITIES. Jacor,
the Purchaser and the Selling Entities shall each:
(a) FILINGS AND APPROVALS. Cooperate with the other in providing
necessary information, and in the preparation and filing, as soon as
practicable, of (i) all notices,
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registration statements, applications and other documents necessary to obtain
all clearances, consents, approvals, orders, resolutions or forbearances by or
from any Governmental Authorities necessary for the completion of the
transactions contemplated by this Agreement, including without limitation the
filing of an appropriate registration statement with the Securities and Exchange
Commission (the "SEC") for registration of the sale of the Jacor Shares that are
to be issued pursuant to this Agreement and pursuant to the Merger Agreement and
filings with the United States Department of Justice and Federal Trade
Commission pursuant to the HSR Act (collectively, the "REGULATORY APPROVALS"),
and (ii) all other documents necessary to obtain any other approvals and
consents required to complete such transactions. Without limiting the
generality of the foregoing, Jacor, the Purchaser and the Selling Entities shall
promptly apprise each other of all communications with Governmental Authorities
regarding the transactions provided for herein and related applications and
proceedings.
(b) REASONABLE BEST EFFORTS. Use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
complete and make effective as promptly as practicable the transactions
contemplated by this Agreement, including, without limitation, using their
respective reasonable best efforts to bring about the completion of the Merger
provided for in the Merger Agreement. Such efforts shall include, without
limitation, (i) using reasonable best efforts to obtain all necessary consents,
approvals or waivers from third parties and Governmental Authorities and the
satisfaction of all conditions necessary for the completion of the transactions
contemplated by this Agreement, PROVIDED, HOWEVER, that nothing in this
Agreement shall require Jacor or any other party to this Agreement, or require
any subsidiary, affiliate or parent of any party to this Agreement, to divest or
hold separate any radio or television 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,
(ii) opposing vigorously any litigation seeking to enjoin or otherwise prevent
the transactions contemplated by this Agreement, and (iii) using reasonable best
efforts in connection with any administrative proceeding or with respect to any
directive relating to this Agreement or the transactions contemplated hereby to
ensure that the transactions can be completed as soon as possible.
(c) FURTHER ASSURANCES; COOPERATION. If at any time after the Closing
Date any party to this Agreement shall reasonably determine that any further
assignment, instrument of transfer or other document or action is necessary,
desirable or appropriate to evidence, confirm or complete the transactions
provided for in this Agreement, cooperate with such party in executing and
delivering any such assignment, instrument of transfer or other document and the
taking of such further action as may reasonably be requested of it.
(d) PUBLICITY. Archon and Jacor shall, subject to their respective legal
obligations (including, in the case of Jacor, requirements of the National
Association of Securities Dealers and the Commission), consult with each other
regarding the text of
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any press release relating to the transactions contemplated hereby before
issuing any such press release and in making any filings with any Governmental
Authority or with the National Association of Securities Dealers with respect
thereto.
4.2 AFFIRMATIVE COVENANTS OF ARCHON AND THE SELLING ENTITIES.
(a) ACCESS; INFORMATION. Archon shall, during normal business hours and
upon reasonable prior notice, afford to the Purchaser and its counsel,
accountants or any other duly authorized representatives of the Purchaser full
access to, and shall permit the Purchaser to, inspect and make copies of all
stock records, minute books, books of account, and other records, and furnish to
the Purchaser such counterpart originals or certified or other copies of such
documents or such information with respect to its businesses and affairs as the
Purchaser may from time to time reasonably request. The Selling Entities and
Archon shall also provide the Purchaser prompt notice of (i) any material
changes of which they become aware regarding the business operations or
prospects of Archon, (ii) any complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any Governmental
Authority regarding the same or the purchase and sale of the Shares or (iii) the
institution or the threat of material litigation involving Archon. From and
after the Closing, all of Archon's books and records shall remain with Archon.
The Selling Entities shall be entitled following the Closing to inspect or make
copies of such books and records for the period prior to the Closing.
(b) FINAL LIABILITIES STATEMENT; PAYMENT OR SETTLEMENT. The Selling
Entities shall cause Archon to prepare and deliver to the Purchaser, not later
than three days prior to the Closing Date hereunder, a final statement of all
liabilities of Archon, if any, existing as of the date of delivery thereof,
together with estimates of any additional liabilities of Archon that may exist
as of the Closing Date (including the Estimated Tax Amount (as defined in
SECTION 4.5(G)), together with a statement of the steps that Archon has taken or
will take to pay, settle or otherwise terminate all of such liabilities at or
prior to the Closing Date, it being understood and agreed that such payment or
provision for such payment shall, in the case of the Estimated Tax Amount, and
in the case of any other liability approved by the Purchaser for treatment in
such manner, be made through retention in Archon of a sufficient amount of cash
to make such payments.
(c) EMPLOYEE STOCK OPTIONS. The Selling Entities shall use their
reasonable best efforts to cause all holders of employee stock options
heretofore granted by Archon (the "Employee Stock Options") to release and agree
to the cancellation of, or otherwise to terminate, all of such options to the
satisfaction of Jacor and the Purchaser on or prior to the Closing Date with no
cost or liability to Archon surviving the Closing.
4.3 NEGATIVE COVENANTS OF THE SELLING ENTITIES.
(a) ACQUISITION PROPOSALS. The Selling Entities agree that none of them,
nor any of their respective officers and directors or affiliates shall, and the
Selling Entities shall direct their employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by them) not to, initiate or solicit
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any inquiries or the making of any proposal or offer with respect to a merger,
consolidation business combination or similar transaction involving, or any
purchase of any equity securities of, or any substantial assets of, Premiere or
Archon (any such proposal or offer being referred to as an "ACQUISITION
PROPOSAL"), or engage in any negotiations concerning, or provide any
confidential information or data to, or initiate or have any discussions with,
any person relating to an Acquisition Proposal. The Selling Entities shall
promptly cease and cause to be terminated any existing discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. The Selling Entities shall immediately notify the Purchaser of any
offer or inquiry of the foregoing type that they receive from any third party,
including a complete description of the proposed terms thereof.
(b) NONALIENATION. The Selling Entities shall not sell, hypothecate or
otherwise transfer, whether with or without consideration, any shares of Archon
Common Stock or any other security of Archon held by them, or any interest
therein, other than in connection with the sale thereof to the Purchaser as
provided in this Agreement.
(c) COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. The Selling Entities
shall not knowingly take any other action that would result in a violation of
any of the Selling Entities' representations and warranties herein, or any
covenant made by the Selling Entities herein.
4.4 ADDITIONAL NEGATIVE COVENANTS RELATING TO ARCHON. From the date
hereof through the Closing Date, except with the prior consent of the Purchaser,
Archon shall not, and the Selling Entities shall not permit Archon to:
(a) ORGANIZATIONAL DOCUMENTS. Amend its certificate of incorporation or
by-laws.
(b) DIVIDENDS. Declare or pay any dividend (whether in cash, stock or
other property) or make any other distribution in respect of its capital stock,
except that cash dividends may be paid in such amount as the Purchaser and the
Selling Entities shall agree as being appropriate to reduce the amount of cash
and cash equivalents held by Archon to an amount equal to the Estimated Tax
Amount, and any other liabilities approved by the Purchaser pursuant to SECTION
4.2(b) above, of Archon in respect of taxable periods (or portions of taxable
periods) ending on or prior to the Closing Date.
(c) SECURITIES. Issue, grant, reissue, sell, adjust, split, combine,
reclassify or acquire shares of its capital stock, other equity securities or
Voting Debt or rights, options or warrants to acquire any such shares of stock
or other equity securities or Voting Debt or stock appreciation rights.
(d) BORROWINGS. Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity.
(e) SALE OR TRANSFER OF ASSETS. Sell, transfer, mortgage, encumber or
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otherwise dispose of any of the Premiere Stock or Premiere Warrants or any other
material assets, it being agreed by the Purchaser that none of the office
furniture or office equipment of Archon shall be deemed to be material assets.
(f) INVESTMENTS. Make any material investment, either by purchase of
stock or securities, in any corporation or other person or entity.
(g) AGREEMENTS REGARDING THE ABOVE. Agree to, or make any commitment to,
take any of the actions covered by this SECTION 4.4.
4.5 TAX COVENANTS.
(a) GENERAL. To the extent Archon's Taxes for all periods included in the
"TAX INDEMNIFICATION PERIOD" (as defined in SECTION 7.2(a)) exceed the Estimated
Tax Amount, the Selling Entities shall pay or cause to be paid all such Taxes or
shall reimburse the Purchaser therefor as provided in SECTIONS 4.5(b) AND 4.5(c)
and the Tax Indemnitors (as defined in SECTION 7.2(a)) shall indemnify and hold
harmless the Tax Indemnitees (as defined in SECTION 7.2(b)) therefrom as
provided in SECTION 7.2.
(b) SHORT PERIOD RETURNS. Archon shall close its books as of the Closing
Date. Not later than 90 days following the Closing, the Selling Entities shall
cause Schwartz Kales Accountancy Corp. (at the expense of the Selling Entities)
to prepare and deliver to the Purchaser for the Purchaser's review and approval
prior to filing (which approval shall not be unreasonably withheld or delayed),
Archon's federal and applicable state income and franchise tax returns for its
short taxable year ended on the Closing Date. For purposes of determining
Archon's taxable income for any short taxable year ended on the Closing Date,
Archon shall take into account, in accordance with its applicable methods of
accounting, all items of income, gain, deduction, loss or credit accrued on or
prior to the Closing Date (as determined based on such closing of its books) and
shall not make the election provided in Treasury Regulations Section
1.1502-76(b)(2)(ii)(D) to allocate tax items ratably. To the extent that the
amount of such Taxes reflected as a liability on any such short-year return
exceeds the amount included therefor in the computation of the Estimated Tax
Amount, the Selling Entities shall pay such excess to the applicable
governmental authority upon the filing of such return or shall reimburse the
Purchaser therefor within fifteen (15) days after payment thereof by the
Purchaser or Archon.
(c) RETURNS FOR OTHER PERIODS. The Purchaser shall prepare and file or
cause to be prepared and filed all Tax returns for Archon for periods which
begin before the Closing Date and end after the Closing Date. To the extent
that the amount of Taxes reflected as a liability on any such return that is
attributable to the portion of such taxable period ending on the Closing Date
exceeds the amount included therefor in the computation of the Estimated Tax
Amount, the Selling Entities shall pay such excess to the applicable
governmental authority upon the filing of such return or shall reimburse the
Purchaser therefor within fifteen (15) days after payment thereof by the
Purchaser or Archon. In the case of any Taxes (other than corporate income or
franchise Taxes and other than Taxes based on sales or gross receipts) that are
imposed on a periodic
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basis and are payable for a taxable period that includes (but does not end on)
the Closing Date, the portion of such Tax which relates to the portion of such
taxable period ending on the Closing Date shall be deemed to be the amount of
such Tax for the entire taxable period multiplied by a fraction the numerator of
which shall be the number of days in the taxable period before the Closing Date
and the denominator of which shall be the number of days in the entire taxable
period. The allocation of Taxes based on income, sales or gross receipts shall
be determined on the basis of the closing of Archon's books on the Closing Date.
(d) REFUNDS. The Selling Entities shall be entitled to any refunds of
Taxes (including interest thereon) payable with respect to the assets or
operations of Archon for any period included in the Tax Indemnification Period,
and Archon shall promptly remit to the Selling Entities any refunds of Taxes to
which such Selling Entities are so entitled; provided, however, that nothing
contained in this Agreement shall be deemed to entitle the Selling Entities to
receive payments attributable to the utilization by Archon (or any successor of
Archon) of net operating or capital loss carryovers attributable to deductions
or losses arising in any period included in the Tax Indemnification Period. For
purposes of the preceding sentence, the amount of any Taxes relating to the Tax
Indemnification Period shall be determined consistently with the methods
provided in SECTIONS 4.5(b) AND 4.5(c). Any refunds of Taxes other than those
described in the first sentence of this SECTION 4.5(d) shall constitute refunds
to which the Selling Entities are not entitled. Refunds to which the Selling
Entities are not entitled shall be retained by Archon.
(e) POST-CLOSING TAXES. Jacor and the Purchaser shall pay or cause to be
paid all Taxes that accrue with respect to the operations or assets of Archon
for any taxable period (or portion thereof) after the Tax Indemnification
Period, and shall indemnify and hold the Selling Entities harmless therefrom as
provided for in SECTION 7.2(g).
(f) COOPERATION. The Selling Entities and the Purchaser shall cooperate
fully in connection with (A) the preparation and filing of any Tax returns or
similar filings that include the business and operations of Archon for any
period (or portion of a period) included within the Tax Indemnification Period,
and (B) any audit examination by any governmental taxing authority of any such
returns or other filings. Such cooperation shall include, without limitation,
the furnishing or making available of records, books of account or other
materials necessary or helpful for the preparation of any such return or filing,
the defense of any deficiencies in Taxes asserted by any such authority relating
to the operations of Archon during the Tax Indemnification Period, and the
pursuit of any refund claims relating to the operations of Archon during the Tax
Indemnification Period. Archon shall have the sole authority and responsibility
for handling all audits and controversies relating to its liability for Taxes
and for contesting or compromising any asserted deficiencies in Taxes and any
claims for refund for any taxable period (whether or not included in the Tax
Indemnification Period), and none of Archon, the Purchaser, Jacor, their
respective Affiliates, or the directors, officers, employees, affiliates,
successors or assigns of any of them, shall be liable to the Selling Entities
for any decisions made or actions taken relating thereto; provided, however,
that the Selling
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Entities shall have the rights provided in SECTION 7.2(E).
(g) ESTIMATED TAX AMOUNT. Not later than 30 days prior to the Closing
Date, Archon shall prepare, and shall submit to the Purchaser, an estimate
(which shall set forth each applicable category of Tax and the period to which
it relates) of all of the unpaid Taxes accrued or expected to be accrued with
respect to the operations or assets of Archon for all periods (or portions
thereof) ending prior to or on the Closing Date (the "ESTIMATED TAX AMOUNT").
The Estimated Tax Amount shall not be less than (i) $40,000 less (ii) any tax
payments with respect to the receipt of Premiere Warrants made by Archon between
the date of this Agreement and the Closing.
(h) TRANSFER TAXES. The Selling Entities shall pay all transfer,
documentary, sales, use, stamp, registration and other Taxes incurred in
connection with the transactions contemplated by this Agreement, and the Selling
Entities shall, at their own expense, file all necessary returns or other
filings relating thereto; PROVIDED, that the Purchaser shall pay any stock
transfer taxes that may arise from the issuance of Jacor Shares in connection
with the transactions provided for herein to the Selling Entities, but not to
any transferee thereof.
4.6 NOTIFICATION. Each party to this Agreement shall notify the other
parties hereto promptly after becoming aware of the occurrence of, or the
impending or threatened occurrence of, any event that would constitute a breach
on its part of any covenant or other obligation under this Agreement or the
occurrence of any event that would cause any representation or warranty made by
it herein to be false or misleading, or if it becomes a party or is threatened
with becoming a party to any legal or equitable proceeding or governmental
investigation or upon the occurrence of any event that would result in a change
in the circumstances of any party described in the representations and
warranties contained herein.
4.7 CORPORATE NAME CHANGE. Within 60 days following the Closing
hereunder, the Purchaser shall cause Archon to take appropriate action to amend
its Certificate of Incorporation to change its corporate name to one not using
the word "Archon" or any variant thereof, and shall relinquish all right to use
such name effective as of the effective date of such amendment.
4.8 NO OTHER PROMISES BY ARCHON. None of Archon, the Selling Entities,
nor any director, officer, employee, agent or representative of any of the
foregoing are making any representations, warranties, covenants or agreements
relating to Premiere, Archon, the Selling Entities, the transactions
contemplated by this Agreement or the Merger Agreement, except only that Archon
and the Selling Entities are making the representations, warranties, covenants
and agreements expressly contained in this Agreement or the Shareholders'
Agreement (as defined in the Merger Agreement).
4.9 NO OTHER PROMISES BY JACOR. Jacor is not making any representations,
warranties, covenants or agreements with Archon, the Selling Entities, or any
directors, officers, employees, agents or representatives of any of the
foregoing, relating to the transactions contemplated by this Agreement or the
Merger Agreement, except for
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those expressly contained in this Agreement or the Shareholders' Agreement (it
being understood that Jacor is making the agreements contained in Section 6.8 of
the Merger Agreement for the benefit of, among others, certain persons who are
officers, directors or employees of Archon).
4.10 TERMINATION OF AGREEMENTS. Archon shall use its reasonable best
efforts to cause the satisfaction of the condition contained in Section 7.3(h)
of the Merger Agreement with respect to agreements to which Archon or any Archon
Affiliates are parties and to terminate the Employee Arrangements at no cost to
Archon that survives the Closing.
ARTICLE V.
CONDITIONS TO CLOSING
5.1 CONDITIONS TO OBLIGATIONS OF THE SELLING ENTITIES. The obligations of
the Selling Entities to complete the transactions provided for in this Agreement
are subject to the satisfaction or waiver on or before the Closing Date of each
of the following conditions:
(a) CONTINUED ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Jacor and the Purchaser contained in this
Agreement shall be true and correct (except where the failure to be true and
correct would not have a material adverse effect on the reasonably expected
benefits to the Selling Entities of the transactions contemplated under this
Agreement) on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date;
Jacor and the Purchaser shall have performed and satisfied in all material
respects all covenants, agreements and conditions required by this Agreement to
be performed or satisfied by them at or prior to the Closing Date; and there
shall have been delivered to the Seller on the Closing Date a certificate
executed by duly authorized officers of Jacor and the Purchaser certifying
compliance with the provisions of this SECTION 5.1(a).
(b) REGULATORY APPROVALS. All Regulatory Approvals necessary for the
consummation of the transactions contemplated by this Agreement shall have been
obtained; such approvals shall be in effect and no adverse proceedings shall
have been initiated challenging or questioning such approvals by any
governmental agency with jurisdiction relating thereto; all applicable waiting
periods with respect to such approvals shall have expired, and all conditions
and requirements prescribed by law or otherwise imposed in connection with such
Regulatory Approvals shall have been satisfied.
(c) NO INJUNCTION. There shall not be in effect any temporary restraining
order or preliminary or permanent injunction, order or decree of a court or
other Governmental Authority of competent jurisdiction restraining or
prohibiting consummation of the transactions contemplated hereby, nor shall any
Governmental Authority have commenced or threatened any material proceedings to
issue or obtain any such
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temporary restraining or preliminary or permanent injunction, order or decree.
5.2 CONDITIONS TO JACOR AND THE PURCHASER'S OBLIGATIONS. The obligations
of Jacor and the Purchaser to complete the transactions provided for in this
Agreement are subject to the satisfaction or waiver on or before the Closing
Date of each of the following conditions:
(a) CONTINUED ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Selling Entities contained in Section 2.4
and in Section 2.5(a) hereof shall be true and correct in all respects and the
representations and warranties of the Selling Entities set forth in this
Agreement other than those contained in Sections 2.4 and 2.5(a) shall be true
and correct except where the failure to be true and correct would not have a
material adverse effect on the reasonably expected benefits to Jacor or
Communications of the transactions contemplated in this Agreement and the Merger
Agreement, in each case as of the date of this Agreement and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of the Closing Date (except for any such representations and
warranties made as of a specified date, which shall be true and correct (subject
to the qualifications set forth above) as of such date; the Selling Entities
shall have performed and satisfied in all material respects all covenants,
agreements and conditions required by this Agreement to be performed and
satisfied by them at or prior to the Closing Date; and there shall have been
delivered to the Purchaser on the Closing Date certificates executed by duly
authorized officers of each of the Selling Entities certifying compliance with
all the provisions of this SECTION 5.2(a).
(b) REGULATORY APPROVALS. All Regulatory Approvals necessary for the
consummation of the transactions contemplated by this Agreement shall have been
obtained without the imposition of any unusual condition which is so materially
burdensome upon the conduct of the business of Jacor or the Purchaser or which
would so adversely impact the economic and business benefits of the transactions
contemplated hereby to Jacor or the Purchaser as to make it unreasonable, in the
reasonable judgment of Jacor or the Purchaser, for the Purchaser to purchase the
Shares; such approvals shall be in effect and no adverse proceedings shall have
been instituted with respect thereto; all applicable waiting periods with
respect to such approvals shall have expired; and all conditions and
requirements prescribed by law or otherwise imposed in connection with the
Regulatory Approvals shall have been satisfied.
(c) NO INJUNCTION. There shall not be in effect any temporary restraining
order, preliminary or permanent injunction, order or decree of a court or other
Governmental Authority of competent jurisdiction restraining or prohibiting
consummation of the transactions contemplated hereby, nor shall any Governmental
Authority have commenced or threatened any material proceedings to issue or
obtain any such temporary restraining order, preliminary or permanent
injunction, order or decree. No law, rule or regulation shall have been adopted
by any Governmental Authority having jurisdiction over any of the Selling
Entities, the Purchaser or any of their respective subsidiaries challenging or
seeking to restrain, materially limit or prohibit the completion
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of the transactions contemplated hereby or the ownership by the Purchaser.
(d) CONSENTS. The Selling Entities shall have obtained the consent or
approval (in addition to the Regulatory Approvals) of any person or entity whose
consent or approval is required in order to permit the succession of the
Purchaser to ownership of the Shares.
(e) NO MATERIAL ADVERSE CHANGE. There shall not have been any material
adverse change in the business, properties, assets or operations of Archon since
the date of this Agreement, provided that a change of value of the Premiere
Shares or Premiere Warrants shall not be considered to be a material adverse
change.
(f) MERGER AGREEMENT. All conditions precedent to the Merger provided for
in the Merger Agreement (other than the closing hereunder) shall have been
satisfied such that the Merger may be completed immediately following the
Closing hereunder.
(g) STOCK OPTIONS. All Employee Stock Options shall have been cancelled
or otherwise terminated to the satisfaction of Jacor and the Purchaser.
(h) PAYMENT OF LIABILITIES. All final liabilities of Archon shall have
been paid or provided for to the satisfaction of Jacor and the Purchaser as
contemplated pursuant to SECTION 4.2(B) hereof.
(i) EMPLOYEE ARRANGEMENTS. All Employee Arrangements shall have been
terminated at no cost to or liability of Archon which survives the Closing,
except as described in Section 7 of this Agreement.
(j) OFFICER RESIGNATIONS. Archon shall have received an executed
instrument substantially in the form of Exhibit 5.2(j) to this Agreement from
all of its officers, directors and employees resigning from their respective
offices or positions and releasing Archon from liability in connection with
their offices or positions with Archon except as described in Article 7 of this
Agreement.
ARTICLE VI.
TERMINATION
6.1 TERMINATION. This Agreement and the obligations of the parties
hereunder may be terminated by mutual written consent of the parties at any time
and shall automatically be terminated upon and at the same time as any
termination of the Merger Agreement.
6.2 EFFECT OF TERMINATION. In the event of a termination under
SECTION 6.1 hereof, this Agreement shall have no further effect, and, except as
set forth below, there shall be no liability on the part of any party hereto or
any of such party's directors, officers, employees or agents to any other party;
PROVIDED that the obligations set forth
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in SECTION 8.8 shall survive the termination of this Agreement; and PROVIDED,
FURTHER, that a termination under SECTION 6.1 shall not relieve any party of any
liability for any breach of this Agreement.
ARTICLE VII.
INDEMNIFICATION
7.1 GENERAL INDEMNITY.
(a) Except for the representations and warranties in Sections 3.5, 3.6,
3.7, 3.8, 3.9 and 3.10, which shall not survive the Closing, all
representations, warranties, covenants and agreements set forth in this
Agreement shall survive the Closing. Except as provided below, from and after
the Closing, News Corporation shall indemnify and hold Archon, Jacor, the
Purchaser, and the present and former employees, agents, officers and directors
of Jacor and the Purchaser (the "Indemnified Parties") harmless from any and all
damages, losses, interest, liabilities, costs and expenses (including attorneys'
fees and expenses) (collectively, "Losses") incurred or suffered by any
Indemnified Party (i) arising out of, relating to or as a result of any
liabilities or obligations of Archon (regardless of whether such liabilities or
obligations have been disclosed) resulting from the transactions contemplated
under this Agreement or the Merger Agreement or arising out of, relating to or
resulting from the conduct of Archon's business prior to the Closing or acts or
omissions that occurred prior to the Closing, (ii) that result from, relate to,
or arise out of the breach of any representation, warranty, agreement or
covenant made or given by either of the Selling Entities or Archon in this
Agreement (regardless of whether such representation, warranty, covenant or
agreement was made by News America or ACP), or (iii) arising out of, relating to
or as a result of payments made or liabilities incurred pursuant to or to cancel
Employee Arrangements, to cancel or purchase Employee Stock Options, or to
purchase shares acquired through the exercise of Employee Stock Options, in each
case after the Closing. The indemnification obligations set forth in this
SECTION 7.1 shall be in addition to, and not to the exclusion of, the
indemnification regarding tax matters provided for in SECTION 7.2 hereof (it
being understood that claims relating to tax matters shall be governed by
Section 7.2). Notwithstanding anything to the contrary in this Section 7.1,
from and after the Closing (i) Jacor shall cause Premiere not to assert any
claims against Archon's former employees, agents, officers and directors (the
"Archon Affiliates") or Archon arising out of or relating to services performed
for Premiere by Archon or the Archon Affiliates under the Securities Purchase
Agreement dated January 17, 1995 between Archon and Premiere (the "Securities
Purchase Agreement") or otherwise (the "Services"); (ii) if a third party brings
a claim against Archon or the Archon Affiliates arising out of or relating to
the Services, News Corporation shall be free to assert any defense, affirmative
defense, or affirmative claim on behalf of the Selling Entities or Archon (and
such claims are hereby assigned to News Corporation by Archon for such purpose
only) to assert that Premiere, or any third party, rather than Archon or any
Archon Affiliate, is liable under such claim except that News Corporation shall
not assert any contractual right of indemnification or contribution from
Premiere
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belonging to Archon or the Archon Affiliates (including without limitation any
right of indemnification or contribution under the Securities Purchase
Agreement); (iii) the indemnity in this Section 7.1 shall not cover liabilities
for which the Consenting Stockholders (as defined in the Merger Agreement) are
indemnified under Section 14 of the Shareholders' Agreement; (iv) the indemnity
in this Section 7.1 shall not extend to the first $30,000 of Losses incurred by
the Indemnified Parties which are in excess of any amount established pursuant
to Section 4.2(b) hereof; and (v) the indemnification in this Section 7.1 shall
not apply to Jacor, the Purchaser, or the present or former employees, agents,
officers, or directors of Jacor and the Purchaser (but, subject to the
qualifications set forth above, shall apply to Archon) if the claim relates to
the Services. Jacor shall cause the originals of any of Archon's books and
records to be available if needed pursuant to any claim under this Article VII.
(b) If any lawsuit, enforcement action, or other claim is filed or made
against an Indemnified Party (a "Third-Party Claim") and is covered by the
indemnity set forth in (a) above, written notice thereof (the "Third-Party Claim
Notice") shall be given to the Selling Entities as promptly as practicable (and
in any event within ten (10) calendar days after the receipt of such Third-Party
Claim); provided that failure to give such notice shall not affect the indemnity
provided herein unless the Selling Entities can demonstrate that they were
materially prejudiced as a consequence of such failure. After the receipt of
such Third-Party Claim Notice, the Selling Entities shall be entitled, upon
written notice to the Indemnified Parties, if the Selling Entities so elect and
at the Selling Entities' sole cost, risk, and expense: (i) to take control of
the defense and investigation of such Third-Party Claim, (ii) to employ and
engage attorneys of their own choice, subject to the reasonable approval of the
Indemnified Parties to handle and defend the same, and (iii) to compromise or
settle such Third-Party Claim, which compromise or settlement shall be made only
with the written consent of the Indemnified Parties, such consent not to be
unreasonably withheld. If the Selling Entities do elect to take control of the
defense of a Third-Party Claim, the Indemnified Parties shall fully cooperate in
the defense of such Third-Party Claim. If the Selling Entities do not elect to
take control of the defense of a Third-Party Claim, the Indemnified Parties may
not compromise or settle such Third-Party Claim without the consent of the
Selling Entities, such consent not to be unreasonably withheld.
7.2 TAX INDEMNITY.
(a) For purposes of this Agreement, the term "TAX INDEMNIFICATION PERIOD"
shall mean the period (including all prior taxable years) ending on and
including the Closing Date, and the term "TAX INDEMNITOR" shall mean News
Corporation.
(b) The Tax Indemnitor indemnifies the Purchaser, Jacor, their Affiliates,
and the directors, employees and successors or assigns of each of them (the "TAX
INDEMNITEES") from and against any and all Net Tax Losses (as hereinafter
defined). For purposes of this SECTION 7.2, "NET TAX LOSSES" shall mean the
excess of (i) Tax Losses (as defined in SECTION 7.2(C)), over (ii) the Estimated
Tax Amount.
(c) "TAX LOSSES" shall mean Taxes (other than: (i) any interest or
penalties which result solely from the failure after the Closing Date by Archon
or the Purchaser to take any action known by it to be reasonably required to
avoid the imposition of such interest or penalty or reasonably requested in
writing by the Selling Entities or (ii) Taxes incurred on income recognized by
Archon in connection with any transaction entered into by Archon and Premiere
during the Tax Indemnification Period, but only to the extent of any tax benefit
actually realized by Premiere as a result of Premiere's claiming a deduction
corresponding to such income item of Archon.
(d) Within ten (10) days after receipt by a Tax Indemnitee of a written
notice (including a revenue agent's report, "thirty-day letter" or "ninety-day
letter," and similar
<PAGE>
Page 24
notices issued by a state taxing authority, but not including requests for
information or documents issued in the ordinary course of a tax audit ("Tax
Notice")) issued by any taxing authority of any demand, claim or circumstances
which, with the lapse of time, would or might give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation that may result in a Tax Loss (an "ASSERTED TAX LIABILITY"), such
Tax Indemnitee shall give notice thereof (the "TAX CLAIM NOTICE") to the Selling
Entities. The Tax Claim Notice shall contain factual information (to the extent
known to the Tax Indemnitee) describing the Asserted Tax Liability in reasonable
detail, shall include copies of any notice or other document received from any
taxing authority in respect of any such Asserted Tax Liability, and shall, to
the extent known to the Tax Indemnitee, indicate the amount of the Tax Loss that
has been or may be suffered by the Tax Indemnitee as a result of such Asserted
Tax Liability. If the Tax Indemnitee fails to give the Selling Entities notice
of an Asserted Tax Liability as required by this SECTION 7.2(D), and such
failure prevents the Selling Entities from exercising the rights provided to the
Selling Entities pursuant to SECTION 7.2(E), the Tax Indemnitor shall have no
obligation to indemnify for any loss arising out of such Asserted Tax Liability.
If Archon receives from the Internal Revenue Service or the California Franchise
Tax Board any Tax Notice of an Asserted Tax Liability or if Archon grants to the
Internal Revenue Service or the California Franchise Tax Board any extension of
the applicable statute of limitations on the assessment of corporate income or
franchise tax for any taxable year included in the Tax Indemnification Period,
Premiere shall use its reasonable best efforts to file a timely protective claim
for refund if such action is necessary to preserve Premiere's ability to claim a
corresponding deduction ("Corresponding Deduction") relating to any potential
audit adjustment increasing the taxable income of Archon based on any
transaction entered into between Archon and Premiere during the Tax
Indemnification Period. If, under the circumstances described in the preceding
sentence, Premiere fails to use its reasonable best efforts to file a timely
protective claim for refund, and such failure prevents Premiere from claiming a
Corresponding Deduction which, if timely claimed, would have reduced Premiere's
liability for Taxes, the obligation of the Tax Indemnitor to indemnify for Net
Tax Losses shall be reduced by the amount of the reduction in Premiere's
liability for Taxes which would have resulted had Premiere claimed a
Corresponding Deduction.
(e) After the receipt of a Tax Claim Notice, the Selling Entities shall be
entitled, upon written notice to the Tax Indemnitees within ten (10) days of the
receipt of the Tax Claim Notice, if the Selling Entities so elect and at the
Selling Entities sole cost, risk, and expense: (i) to take control of the
defense and investigation of the Asserted Tax Liability, (ii) to employ and
engage attorneys of their own choice, subject to the reasonable approval of the
Tax Indemnitees, to handle and defend the same, and (iii) to compromise or
settle such Asserted Tax Liability, which compromise or settlement shall be made
only with the written consent of the Tax Indemnitees, such consent not to be
unreasonably withheld. If the Selling Entities elect to take control of the
defense and investigation of an Asserted Tax Liability, the Tax Indemnitees
shall fully cooperate in such defense. If the Selling Entities fail to so
notify the Tax Indemnitees, the Tax Indemnitees shall be entitled to contest or
compromise such Asserted Tax Liability without the involvement of the Selling
Entities; provided, however, that the Tax
<PAGE>
Page 25
Indemnitees shall not compromise such Asserted Tax Liability without the consent
of the Selling Entities, such consent not to be unreasonably withheld.
(f) Upon the expiration of the statute of limitations for the assessment
of Federal income tax for all taxable years of Archon included in the Tax
Indemnification Period, Archon shall pay to the Selling Entities in proportion
to each such Selling Entity's Interest in the Purchase Price, an amount equal to
the lesser of the excess, if any, of the Estimated Tax Amount over the
cumulative Tax Losses.
(g) From and after the Closing Date, the Purchaser and Jacor shall
reimburse, indemnify and hold harmless the Selling Entities against any damages,
losses, deficiencies, liabilities, costs and expenses (including reasonable
attorneys' fees) incurred or suffered by any Selling Shareholder that result
from, relate to, or arise out of the breach of any warranty, agreement or
covenant on the part of the Purchaser for payment of Taxes pursuant to SECTION
4.6(C).
7.3 INDEMNIFICATION OF ARCHON AFFILIATES. Notwithstanding anything to the
contrary in this Agreement, Merger Agreement or any other instrument being
executed in connection with the transaction, from and after the Closing, Jacor
shall cause Archon to keep in place the provisions in Archon's certificate of
incorporation and bylaws in effect as of the date of this Agreement providing
for the indemnification of, and advancement of expenses to, the Archon
Affiliates (the "Indemnification Provisions"); provided, however, that Jacor may
at its option substitute equivalent protections from Jacor. Jacor or Archon
shall be entitled to indemnification from News America under Section 7.1 above
for any payments made by Archon or Jacor to any Archon Affiliate pursuant to the
Indemnification Provisions or a substitute arrangement.
7.4 OTHER. Nothing contained in this Agreement, or in any instrument
referred to herein or to be executed pursuant hereto, including, but not limited
to, the employment agreement terminations described in this Agreement shall
diminish or modify the rights of Robert Fell and the employees of Archon under
Section 6.8 of the Merger Agreement. The employees of Archon and Robert Fell
are intended third party beneficiaries of Section 7.3 and this provision. News
Corporation shall not be responsible for payments made by Premiere or Jacor
under Section 6.8 of the Merger Agreement. News America shall be responsible
for the indemnities of News Corporation hereunder if News Corporation does not
honor those indemnities.
ARTICLE VIII.
MISCELLANEOUS
8.1 NOTICES. Any notice or other communication required or permitted
hereunder shall be made in writing and shall be delivered personally or sent by
an overnight delivery or courier service, by certified or registered mail
(postage prepaid), by telegraph or by facsimile transmission as follows:
<PAGE>
Page 26
To Jacor or the Purchaser:
Paul F. Solomon
Jacor Communications, Inc.
50 East RiverCenter Boulevard
Twelfth Floor
Covington, Kentucky 41011
Scott J. Davis
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
To ACP:
Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
With a courtesy copy to:
Kenin Spivak
c/o Stephen Silbert
Christensen, Miller, Fink,
Jacobs, Glaser, Weil &
Shapiro, LLP
2121 Avenue of the Stars
18th Floor
Los Angeles, California 90067
Robert Fell
10550 Wilshire Blvd.
Suite 1105
Los Angeles, California 90024
To News America:
Jay Itzkowitz
News America
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
To News Corporation:
<PAGE>
Page 27
Jay Itzkowitz
The News Corporation Limited
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
Such notice or other communication shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission, or, if sent
by overnight delivery or courier service, the day after sent from within the
United states, or if mailed, four days after the date of deposit in the United
states mails.
8.2 GOVERNING LAW. This Agreement and the legal relations between the
parties hereto shall, to the extent not governed by federal law, be governed by
and construed in accordance with the internal laws of the state of Delaware,
without taking into account Delaware statutory provisions or judicial decisions
regarding choice of law questions.
8.3 ENTIRE AGREEMENT. The parties intend that the terms of this Agreement
shall be the final expression of their agreement with respect to the subject
matter hereof and may not be contradicted by evidence of any prior or
contemporaneous agreement, except as provided below. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative or other legal proceeding involving this Agreement.
This Agreement, including all schedules and exhibits hereto, constitutes the
entire agreement between the parties and supersedes all prior negotiations,
undertakings, representations and agreements, if any, of the parties hereto,
other than the Merger Agreement and the Shareholders' Agreement (as such term is
defined in the Merger Agreement).
8.4 AMENDMENTS AND WAIVERS. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto. By an
instrument in writing, any party may waive compliance by any other party with
any term or provision of this Agreement that such other party was or is
obligated to comply with or perform; PROVIDED, HOWEVER, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy or power hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy or power
provided herein or by law or in equity. The waiver by any party of the time for
performance of any act or condition hereunder does not constitute a waiver of
the act or condition itself.
8.5 SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such
<PAGE>
Page 28
provisions as applied to other persons, places and circumstances shall remain in
full force and effect.
8.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
8.7 INTERPRETATION OF AGREEMENT. The article, section and other headings
used in this Agreement are for reference purposes only and shall not constitute
a part hereof or affect the meaning or interpretation of this Agreement. The
term "PERSON" shall include any individual, partnership, joint venture,
corporation, trust or unincorporated organization, any other business entity and
any government or any department or agency thereof, whether acting in an
individual, fiduciary or other capacity. Whenever the context so requires, the
use of the singular shall be deemed to include the plural and vice versa.
8.8 EXPENSES. Each of the parties hereto shall bear its own fees and
out-of-pocket expenses incurred in connection with the transactions contemplated
by this Agreement except that the Selling Entities shall pay the expense
(including reasonable attorneys' fees attributable to any HSR filing required to
consummate the transactions contemplated hereunder) of any HSR filing required
under this Agreement when such expenses are incurred.
8.9 ATTORNEYS' FEES. If any legal action is brought for the enforcement
of this Agreement or because of an alleged dispute, breach or default in
connection with this Agreement the prevailing parties shall be entitled to
recover reasonable attorneys' fees and other costs incurred in such action or
proceeding in addition to any other relief to which it may be entitled.
8.10 BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns; PROVIDED, HOWEVER, that this Agreement may not be assigned by any party
without the prior written consent of the other party.
8.11 NO THIRD PARTY BENEFIT. Each party intends that this Agreement shall
not benefit or create any right or cause of action in any person other than the
parties to this Agreement, except as otherwise set forth herein.
8.12 GENDER; NUMBER. Whenever the context of this Agreement requires, the
masculine gender shall include the feminine or neuter, and the singular number
shall include the plural.
8.13 SURVIVAL. The representations, warranties, agreements and covenants
of the respective parties set forth in this Agreement shall survive and shall
continue in effect following the Closing of the transaction provided for herein.
8.14 CONSENT TO JURISDICTION. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the state
<PAGE>
Page 29
of Delaware and of the United states of America located in the state of Delaware
(the "DELAWARE COURTS") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such Delaware Courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum.
8.15 CORPORATE OPPORTUNITY MATTERS. Jacor and the Purchaser agree that and
from and after the Closing hereunder any former Archon employee may pursue any
business opportunities that would, prior to the Closing, have been foreclosed to
such employee as a result of the corporate opportunity doctrine or similar
principles of fiduciary duty, and Jacor and the Purchaser hereby waive the right
to assert the benefits of any such principle in such circumstance.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JACOR THE SELLING ENTITIES
JACOR COMMUNICATIONS, INC. ARCHON COMMUNICATIONS
PARTNERS LLC
By:/S/ JEROME L. KERSTING By: /S/ RICHARD SANDLER
-------------------------- ------------------------
RICHARD SANDLER
Its: SENIOR VICE PRESIDENT Its: MANAGER
------------------------ -----------------------
THE PURCHASER
JACOR COMMUNICATIONS COMPANY NEWS AMERICA HOLDINGS,
INCORPORATED
By:/S/ JEROME L. KERSTING By:/S/ CHASE CAREY
--------------------------- ---------------------------
CHASE CAREY
Its: SENIOR VICE PRESIDENT Its: EXECUTIVE VICE PRESIDENT
-------------------------- ---------------------------
THE INDEMNITOR
THE NEWS CORPORATION LIMITED
<PAGE>
Page 30
By:
---------------------------
Its:
--------------------------
<PAGE> Page 1
EXHIBIT 99.1
------------
CONTACT: Chris Weber
(606) 655-2267
JACOR TO ACQUIRE
PREMIERE RADIO NETWORKS
COVINGTON, KY, APRIL 7, 1997 -- JACOR COMMUNICATION INC.(NASDAQ: JCOR)
today announced that it has signed a definitive agreement to acquire the
outstanding shares of Premiere Radio Networks, Inc. (NASDAQ: PRNI and PRNIA)
for cash and stock valued at approximately $18 per Premiere share, consisting
of $13.50 in cash with the balance in Jacor common stock. The acquisition
price is subject to adjustment in certain circumstances.
The transaction, which will be effected through a merger of Premier and a
newly formed Jacor acquisition subsidiary, is subject to regulatory review
and other customary closing considerations. Premiere's common stock and
Class A common stock will be treated the same in the merger. The total
consideration to be paid by Jacor, including payment for certain Premiere
warrants and stock options, is expected to be approximately $185 million.
Net of Premiere's cash on hand and excess working capital to be assumed by
Jacor, the total net consideration to be paid by Jacor is expected to be
$165 million.
Premiere is a leading independent creator, producer and distributor of
innovative comedy, entertainment, music radio programs, research and other
services. The company produces 52 syndicated programs and services, and has
more that 6,300 radio station affiliates under contract that broadcast its
programming and use its services. Premiere is the largest syndicator of comedy
programming in the United States. The company distributes these programs and
services in exchange for commercial broadcast time.
The merger must be approved by Premiere's shareholders, which is assured
because certain management shareholders and Archon Communications Inc.,
Premiere's largest single shareholder, have executed agreements to vote their
shares in favor of the merger. Archon and the management shareholders
together own shares representing more than 50% of the voting power of
Premiere. The merger is expected to close during the summer of 1997.
Randy Michaels, Jacor Chief Executive Officer, said, "The acquisition of
Premiere Networks fits perfectly with our plans to synergize the complementary
businesses of our rapidly growing broadcast company."
"The acquisition of Premiere establishes Jacor as the leader in
assembling a fully integrated radio company. Jacor's acquisition plan has
centered on three areas. First, Jacor has built the largest radio group in
the United States in terms of number of radio stations owned. Second, the
recent acquisition of E.F.M. Media (Rush Limbaugh and Dr. Dean Edell) along
with Premiere propels Jacor to the forefront in programming content. Finally,
the acquisition of NSN Network Services places Jacor in front of all other
broadcast companies in terms of satellite and internet connectivity to feed
content to its radio stations as well as others in the industry."
"Premiere has a wide array of successful programming products and
services appealing to radio stations throughout the country.
<PAGE> Page 2
Jacor itself has used many of Premiere's products and services for
years," Michaels said.
"Premiere provides us several additional marquee radio personalties
including Leeza Gibbons, Jim Rome and Michael Reagan, to add to our growing
stable of strong national and local air personalties."
Steve Lehman, Premiere's President and Chief Executive Officer, said, "We
are elated to be aligned with a group that has such tremendous synergies both
operationally and culturally. Jacor and Premiere are both aggressive,
cutting-edge companies that when combined will reshape the future of network
radio."
Jacor said Premiere's management group is expected to remain with the
company after the merger.
Alex. Brown & Co. served as a financial advisor to Premiere in connection
with the merger transaction and has rendered an opinion to Premiere that the
merger agreement between Premiere and Jacor is fair to Premiere shareholders
from a financial point of view.
Jacor Communications is headquartered in Covington, Ky. Including
announced pending acquisitions, Jacor owns, operates represents or provides
programming for approximately 130 radio stations in 27 broadcast areas. The
company also owns WKRC-TV in Cincinnati. In addition, Jacor's E.F.M. subsidiary
syndicates programming, including Rush Limbaugh and Dr. Dean Edell, to
approximately 800 stations throughout the country. Jacor plans to pursue growth
through continued acquisitions of complementary stations in its existing
broadcast locations, and radio groups or individual stations with significant
presence in other attractive locations. The company may also grow through
acquisition of other broadcast-related businesses.
<PAGE>
Page 1
EXHIBIT 99.2
CONTACT: Chris Weber
(606) 655-2267
JACOR TO PURCHASE ASSETS OF NSN,
LEADER IN DEVELOPMENT AND DEVELOPMENT
OF RADIO CONNECTIVITY
VIA SATELLITE AND INTERNET
COVINGTON, KY, APRIL 7 -- JACOR COMMUNICATIONS INC. (NASDAQ: JCOR) today
announced it has reached a definitive agreement to purchase the assets of NSN
Network Services, a leading provider of satellite and network services for the
radio broadcasting industry.
Jacor Chief Executive Officer Randy Michaels said, "NSN is at the forefront
of developing and implementing connectivity technologies for radio broadcasters,
a need that is beginning to be recognized as a key avenue to radio growth. We
intend to use them for our own stations' needs and for our burgeoning radio
syndication business."
NSN will provide Jacor with back-office backbone, internet and other
capabilities that will allow cost-efficient operations of Jacor's expanding
radio company. In addition, Jacor intends to use these capabilities to
pursue state-of-the-art program delivery for its growing syndication business.
"NSN will also remain a provider of networking services for other radio
broadcasting companies, and will continue its business designing and installing
satellite systems for paging, private and remote office telephone and data
links, and worldwide internet services," Michaels said.
"We're very pleased to be joining the Jacor family," said Muffy Montemayor,
NSN's Chief Operating Officer. "Both of us are at the forefront of developing
technologies for the radio business, and together we'll be able to lead the
development of some very creative applications."
Jacor will pay $11 million for NSN's assets, of which $1.65 million will be
in Jacor common stock. Jacor said NSN's management will remain associated with
the company.
<PAGE>
Page 2
Jacor Communications is headquarted in Covington, Ky. Including announced
pending acquisitions, Jacor owns, operates, represents or provides programming
for approximately 130 radio stations in 27 broadcast areas. The company also
owns WKRC-TV in Cincinnati. In addition, Jacor's E.F.M. subsidiary syndicates
programming, including Rush Limbaugh and Dr. Dean Edell, to approximately 800
stations throughout the country. Jacor plans to pursue growth through
continued acquisitions of complementary stations in its existing broadcast
locations, and radio groups or individual stations with significant presence in
other attractive locations. The company may also grow through acquisition of
other broadcast-related businesses.
