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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 Exchange Act of 1934
Date of Report (Date of earliest event reported) . . . . . . . . April 7, 1997
PREMIERE RADIO NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20065 95-4083971
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
15260 Ventura Boulevard, Suite 500
Los Angeles, California 91403
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(Address of principal executive offices)
Registrant's telephone number, including area code . . . . . . . (818) 377-5300
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 7, 1997 Premiere Radio Networks, Inc. (the "Company") entered into
an Agreement and Plan of Merger (the "Merger Agreement") with Jacor
Communications, Inc. ("JCI"), Jacor Communications Company ("JCC") and PRN
Holding Acquisition Corp. ("PRN") (the "Merger"), a copy of which is attached
hereto as EXHIBIT 99.1 and incorporated herein by reference. Pursuant to the
Merger Agreement, among other things, PRN will be merged with and into the
Company, with the Company as the surviving corporation (the "Merger"). In the
Merger each outstanding share of Common Stock, par value $.01 per share ("Common
Stock"), and Class A Common Stock, par value $.01 per share ("Class A Common
Stock"), of the Company, other than (i) shares held by Archon Communications,
Inc. ("Archon"), (ii) shares held by any direct or indirect subsidiary of the
Company or JCI, or (iii) shares held by persons who perfect dissenters' rights
under the Delaware General Corporation Law, will be converted into (i) $13.50 in
cash, and (ii) a fraction of share of common stock, no par value per share (the
"Jacor Stock"), of JCI equal to .25 multiplied by .61016949 (the "Exchange
Ratio"); provided, that the Exchange Ratio will be adjusted as provided in the
Merger Agreement in the event that the average closing trading price of the
Jacor Stock for the ten trading days preceding the date which is three days
prior to the closing date is less than $26.50 per share or greater than $32.50
per share. The cash and stock to be paid to the Company's stockholders is
valued at approximately $18 per share. The Merger is subject to customary
conditions, including receipt of all necessary regulatory approvals, and is
expected to be consummated during the summer of 1997.
Also on April 7, 1997, in order to facilitate the Merger, the shareholders
of Archon Communications, Inc. ("Archon"), the largest shareholder of the
Company's capital stock, entered into a Stock Purchase Agreement pursuant to
which, among other things, JCC will acquire all the outstanding common stock and
common stock equivalents of Archon (the "Archon 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 business activities are limited to the ownership of
Premiere common stock, Premiere Class A common stock and options and warrants to
acquire Premiere common stock. 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 purchase of the Archon Stock is subject to
customary conditions, including receipt of all necessary regulatory approvals,
and will be consummated immediately prior to the consummation of the Merger.
In addition, on April 7, 1997 certain shareholders of the Company
representing more than 50% of the voting power of the Common Stock and Class A
Common Stock entered into a Shareholders Agreement (the "Shareholders
Agreement"), a copy of which is attached hereto as EXHIBIT 99.2 and incorporated
herein by reference. Pursuant to the Shareholders Agreement, among other
things, such shareholders (i) approved, adopted and consented to the Merger
Agreement and the transactions contemplated thereby, (ii) agreed not to take
certain actions
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which would make it more difficult to consummate the transactions contemplated
by the Merger Agreement, (iii) granted to JCI and JCC a proxy to vote the shares
of Common Stock and Class A Common Stock in any vote to consummate the
transactions contemplated by the Merger Agreement, and (iv) agreed not to
dispose of any shares of Common Stock or Class A Common Stock without the
consent of JCI.
On April 7, 1997 the Company issued the press release attached hereto as
EXHIBIT 99.3 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
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99.1 Agreement and Plan of Merger
dated April 7, 1997 among the
Company, JCC, JCI, PRN
99.2 Shareholders Agreement dated April
7, 1997 among JCI, JCC and the
other parties named therein
99.3 Press release dated April 7, 1997
issued by the Company
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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.
Date: April 10, 1997 Premiere Radio Networks, Inc.
by: /s/ Dan Yukelson
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Dan Yukelson
Vice President/Finance and Chief
Financial Officer and Secretary
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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.
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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:
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."
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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.
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
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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 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
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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 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).
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(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 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
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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 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
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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
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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 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, 4,256,794 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
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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 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,
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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.
(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,
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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 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
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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 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
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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;
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(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 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,
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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
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,
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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:
(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
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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 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.
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(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
agreement requiring the payment of compensation in excess
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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
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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, 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
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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 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
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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 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
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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 are in full force and effect (subject to the consummation of the
transactions contemplated hereby) and have not been materially breached.
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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,
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Communications or Acquisition Corp., nor the consummation by Jacor,
Communications or Acquisition Corp. of the 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
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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
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
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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
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
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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.
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
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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 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
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(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 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
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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
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reference therein not misleading or to comply with applicable law.
Notwithstanding the foregoing, each party shall be responsible for the
information and disclosures which it makes or incorporates by reference in all
regulatory filings, the 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
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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 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
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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 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
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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 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
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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.
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:
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(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:
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(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
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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 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,
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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.
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
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(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 $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
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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
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
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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
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
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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 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.
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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>
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:
-----------------------------------
Name:
Title:
JACOR COMMUNICATIONS COMPANY
By:
-----------------------------------
Name:
Title:
PRN HOLDING ACQUISITION CORP.
By:
-----------------------------------
Name:
Title:
PREMIERE RADIO NETWORKS, INC.
By: /s/ Stephen C. Lehman
-----------------------------------
Name: Stephen C. Lehman
Title: CEO
<PAGE>
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,
<PAGE>
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 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.
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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.
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
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<PAGE>
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 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.
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<PAGE>
(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 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
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<PAGE>
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 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
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<PAGE>
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 Premiere; (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.
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<PAGE>
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
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.
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<PAGE>
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.
(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
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<PAGE>
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:
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
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<PAGE>
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 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
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"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.
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<PAGE>
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>
ARCHON COMMUNICATIONS INC.
both in its individual capacity and as the Proxy
By: /s/ illegible
---------------------------
Title: President
------------------------
Address for Notices:
c/o Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
<PAGE>
ARCHON COMMUNICATIONS PARTNERS LLC
By: /s/ illegible
---------------------------
Title: Manager
------------------------
Address for Notices:
c/o Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
NEWS AMERICA HOLDINGS, INC.
By:
---------------------------
Title:
------------------------
Address for Notices:
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
<PAGE>
ARCHON COMMUNICATIONS PARTNERS LLC
By:
---------------------------
Title:
------------------------
Address for Notices:
c/o Richard V. Sandler
Maron & Sandler
844 Moraga Drive
Los Angeles, California 90049
NEWS AMERICA HOLDINGS, INC.
By: /s/ illegible
----------------------------
Title: Executive Vice President
-------------------------
Address for Notices:
10201 West Pico Boulevard
Building 88, Room 142
Los Angeles, California 90035
<PAGE>
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
West Lake Village, CA 91361
Spouse: /s/ Lisa Kitchin
-----------------------
Typed Name: Lisa Kitchin
<PAGE>
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>
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>
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.
------------------------------
Dated: ______________, 1997
NUMBER OF SHARES
Common Stock:
Class A Common Stock:
Address for Notices:
Spouse: ______________________
Typed Name: __________________
<PAGE>
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:__________________________
Name:________________________
Title:_______________________
Dated: ________________, 1997
<PAGE>
FOR IMMEDIATE RELEASE
CONTACT: HAROLD WROBEL
818/377-5300
JACOR TO ACQUIRE
PREMIER RADIO NETWORKS, INC.
FOR $185 MILLION
LOS ANGELES, CA --APRIL 7, 1997 - Jacor Communications Inc. (NASDAQ: JACOR)
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 Premiere and a
newly formed Jacor acquisition subsidiary, is subject to regulatory review and
other customary closing considerations. 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. Under Premiere's by-laws, holders
of Premiere's Common Stock and Class A Common Stock shall each receive the same
merger consideration.
Premiere Radio Networks, Inc. is a leading independent creator, producer
and distributor of innovative comedy, entertainment, music radio programs,
research and other services. Founded in 1987, Los Angeles-based Premiere
produces 52 syndicated programs and services and has more than 6,300 radio
station affiliates under contract that broadcast its programming and use its
services. Premiere is the largest producer of syndicated comedy programming on
radio in the United States. Premiere 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 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's Chief Executive Officer, said, "The acquisition of
Premiere Radio Networks fits perfectly with our plans to synergize the
complementary business of our rapidly growing broadcast company."
"Premiere has a wide array of successful programming products and services;
it's nearly impossible to listen to the radio station that does not feature at
least one Premiere product. Jacor
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itself has used many of Premiere's products and services for years."
"Premiere provides us with several additional marquee radio personalities,
including Leeza Gibbons, Jim Rome and Michael Reagan, to add to our growing
stable and strong national and local on-air personalities. Additionally, the
research services of Premiere's Mediabase division provide a wonderful
complement to the capabilities of Critical Mass Media, Jacor's highly successful
research affiliate, " Michaels said.
Steve Lehman, Premier'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 will reshape the future of network radio."
Jacor and Premiere's management group will remain with the company after
the merger.
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.
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's shareholders
from a financial point of view.
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