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_________________________________________________________________
AGREEMENT AND PLAN OF MERGER
by and among
JACOR COMMUNICATIONS, INC.,
JCAC, INC.
and
CITICASTERS INC.
Dated as of February 12, 1996
_________________________________________________________________
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Table of Contents
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Page
ARTICLE 1 THE MERGER; EFFECTIVE TIME; CLOSING . . . . . . . . . . 1
1.1 The Merger. . . . . . . . . . . . . . . . . . 1
1.2 The Closing. . . . . . . . . . . . . . . . . . 2
1.3 Effective Time. . . . . . . . . . . . . . . . 2
ARTICLE 2 ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION . . . . . . . 2
2.1 Articles of Incorporation. . . . . . . . . . . 2
2.2 By-Laws. . . . . . . . . . . . . . . . . . . . 2
2.3 Directors. . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . 3
3.1 Conversion of Shares; Options. . . . . . . . . 3
3.2 Exchange Procedures. . . . . . . . . . . . . . 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . 6
4.1 Organization and Standing. . . . . . . . . . . 6
4.2 Authorization, Validity and Effect. . . . . . 7
4.3 Capitalization. . . . . . . . . . . . . . . . 7
4.4 Company Subsidiaries. . . . . . . . . . . . . 8
4.5 No Conflict; Required Filings and Consents. . 9
4.6 Company Reports; Financial Statements. . . . . 10
4.7 Tax and Accounting Matters. . . . . . . . . . 11
4.8 Properties. . . . . . . . . . . . . . . . . . 12
4.9 Compliance with Laws; FCC Authorizations. . . 12
4.10 Employee Benefit Plans. . . . . . . . . . . . 13
4.11 Material Contracts. . . . . . . . . . . . . . 15
4.12 Legal Proceedings. . . . . . . . . . . . . . . 16
4.13 Certain Information. . . . . . . . . . . . . . 17
4.14 No Brokers. . . . . . . . . . . . . . . . . . 17
4.15 Opinion of Financial Advisor. . . . . . . . . 18
4.16 Environmental. . . . . . . . . . . . . . . . . 18
4.17 Personnel. . . . . . . . . . . . . . . . . . . 19
4.18 Takeover Statutes. . . . . . . . . . . . . . . 19
4.19 Cash Flow. . . . . . . . . . . . . . . . . . . 19
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ACQUIROR
AND SUB . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Organization and Standing. . . . . . . . . . . 20
5.2 Authorization, Validity and Effect. . . . . . 20
5.3 Capitalization. . . . . . . . . . . . . . . . 20
5.4 No Conflict; Required Filings and Consents . . 20
5.5 Acquiror Reports; Financial Statements. . . . 21
5.6 Legal Proceedings. . . . . . . . . . . . . . . 22
5.7 Certain Information. . . . . . . . . . . . . . 23
5.8 Ownership of Company Common Stock. . . . . . . 23
5.9 Merger Sub. . . . . . . . . . . . . . . . . . 24
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5.10 Acquiror's Financing. . . . . . . . . . . . . . 24
5.11 Qualification as a Licensee. . . . . . . . . . . 24
5.12 No Brokers. . . . . . . . . . . . . . . . . . . 24
ARTICLE 6 COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . 24
6.1 No Solicitation and Other Actions. . . . . . . . 24
6.2 Interim Operations of the Company. . . . . . . . 26
6.3 Shareholder Approval. . . . . . . . . . . . . . 28
6.4 Information Statement; Registration Statement. . 29
6.5 Notification. . . . . . . . . . . . . . . . . . 30
6.6 Employee Benefits. . . . . . . . . . . . . . . . 30
6.7 Investigation and Confidentiality. . . . . . . . 31
6.8 Filings; Other Action. . . . . . . . . . . . . . 31
6.9 Indemnification and Insurance. . . . . . . . . . 32
6.10 Publicity. . . . . . . . . . . . . . . . . . . . 32
6.11 Transfer Taxes. . . . . . . . . . . . . . . . . 33
6.12 Letter of Credit. . . . . . . . . . . . . . . . 33
6.13 Environmental Inspection. . . . . . . . . . . . 33
6.14 Acknowledgement of Consents. . . . . . . . . . . 33
6.15 Rule 145 Affiliates. . . . . . . . . . . . . . . 33
6.16 Actions With Respect to the Warrants. . . . . . 34
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . 34
7.1 Conditions to Obligations of the Parties. . . . 34
7.2 Conditions to Obligations of the Company. . . . 35
7.3 Conditions to Obligations of Acquiror and Sub. . 36
ARTICLE 8 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . 37
8.1 Termination. . . . . . . . . . . . . . . . . . . 37
8.2 Effect of Termination. . . . . . . . . . . . . . 38
ARTICLE 9 MISCELLANEOUS AND GENERAL . . . . . . . . . . . . . . . . 40
9.1 Expenses. . . . . . . . . . . . . . . . . . . . 40
9.2 Successors and Assigns. . . . . . . . . . . . . 40
9.3 Third Party Beneficiaries. . . . . . . . . . . . 40
9.4 Notices. . . . . . . . . . . . . . . . . . . . . 40
9.5 Complete Agreement. . . . . . . . . . . . . . . 41
9.6 Captions; References. . . . . . . . . . . . . . 42
9.7 Amendment. . . . . . . . . . . . . . . . . . . . 42
9.8 Waiver. . . . . . . . . . . . . . . . . . . . . 42
9.9 Governing Law. . . . . . . . . . . . . . . . . . 42
9.10 Non-Survival of Representations,
Warranties and Covenants . . . . . . . . . . . . 42
9.11 Severability. . . . . . . . . . . . . . . . . . 42
9.12 Enforcement of Agreement. . . . . . . . . . . . 43
9.13 Counterparts. . . . . . . . . . . . . . . . . . 43
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 12, 1996, among CITICASTERS INC. (the "Company"), a Florida
corporation, JACOR COMMUNICATIONS, INC. ("Acquiror"), an Ohio corporation, and
JCAC, INC. ("Sub"), a Florida corporation and a direct wholly owned Subsidiary
of Acquiror.
RECITALS
WHEREAS, the respective Boards of Directors of the Company, Acquiror
and Sub have determined that a business combination between the Company,
Acquiror and Sub is in the best interests of their respective companies and
shareholders;
WHEREAS, concurrently with the execution hereof, in order to induce
Acquiror to enter into this Agreement, Acquiror is entering into a Stockholders
Agreement (the "Stockholders Agreement") with Great American Insurance Company,
American Financial Corporation, American Financial Enterprises, Inc., Xxxx X.
Xxxxxxx, S. Xxxxx Xxxxxxx and The Xxxx X. Xxxxxxx Foundation (the "Consenting
Stockholders") providing for certain voting and other restrictions with respect
to the shares of Company Common Stock (as defined in subsection 3.1(a))
beneficially owned by the Consenting Stockholders upon the terms and conditions
specified therein; and
WHEREAS, Acquiror, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, the Company, Acquiror and
Sub hereby agree as follows:
ARTICLE 1
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 THE MERGER. (a) Subject to the terms and conditions
contained in this Agreement, at the Effective Time (as defined in Section 1.3),
Sub shall be merged with and into the Company in accordance with the applicable
provisions of the Florida Business Corporation Act (the "FBCA"), and the
separate corporate existence of Sub shall thereupon cease (the "Merger").
Following the Merger, the Company shall continue as the surviving corporation
(sometimes hereinafter referred to as the "Surviving Corporation") and shall be
a wholly owned Subsidiary of Acquiror.
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(b) At the Effective Time, the corporate existence of
the Company, with all its rights, privileges, powers and franchises, shall
continue unaffected and unimpaired by the Merger. The Merger shall have the
effects specified in the FBCA.
1.2 THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Xxxxxxx,
Head & Xxxxxxx, 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, at 10:00 a.m., local
time, on the first business day immediately following the date on which the
last of the conditions (excluding conditions that by their terms cannot be
satisfied until the Closing Date) set forth in Article 7 is satisfied or waived
in accordance herewith, or at such other date, time and place as the Company
and Acquiror may agree in writing. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date".
1.3 EFFECTIVE TIME. At or as promptly as practicable after the
Closing, the parties hereto shall cause articles of merger, in the form
attached hereto as Schedule 1.3 (the "Articles of Merger"), executed in
accordance with the relevant provisions of the FBCA, to be filed with the
Department of State of the State of Florida as provided in Section 607.1105 of
the FBCA. Upon the completion of such filing, or at such other time as may be
specified in such filing, the Merger shall become effective in accordance with
the FBCA. The time and date on which the Merger becomes effective is herein
referred to as the "Effective Time".
ARTICLE 2
ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION
2.1 ARTICLES OF INCORPORATION. At the Effective Time and
without any further action on the part of the Company or Sub, the articles of
incorporation of Sub, as in effect immediately prior to the Effective Time and
amended as set forth in the Articles of Merger, shall become the articles of
incorporation of the Surviving Corporation until thereafter amended as provided
therein and under the FBCA.
2.2 BY-LAWS. At the Effective Time and without any further
action on the part of the Company or Sub, the by-laws of Sub, as in effect
immediately prior to the Effective Time, shall become the by-laws of the
Surviving Corporation until thereafter amended or repealed in accordance with
their terms and the articles of incorporation of the Surviving Corporation and
as provided under the FBCA.
2.3 DIRECTORS. The directors and officers of Sub at the
Effective time shall, from and after the Effective Time, be the
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directors and officers of the Surviving Corporation until the successors of all
such persons shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's articles of incorporation and by-laws.
ARTICLE 3
CONVERSION OF SHARES
3.1 CONVERSION OF SHARES; OPTIONS.
(a) At the Effective Time, each share of Class A
Common Stock, par value $.01 per share, of the Company (the "Company Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than Company Common Stock owned by the Company, Acquiror, Sub or any direct or
indirect Subsidiary of the Company, Acquiror or Sub, or any Company Common
Stock held in the treasury of the Company) shall, by virtue of the Merger and
without any action on the part of the holders thereof, be converted into and
represent the right to receive: (i) $29.50 in cash, plus, in the event that the
Closing does not occur prior to October 1, 1996, for each full calendar month
ending prior to the Closing, commencing with October, 1996, an additional
amount of $.22125 in cash (the "Cash Consideration"); plus (ii) a warrant to
acquire a fractional share (determined as provided below) of the Acquiror
Common Stock (as defined below) (the "Warrant Consideration") (the Cash
Consideration and the Warrant Consideration being collectively referenced as
the "Merger Consideration") on the terms described in the Warrant Agreement to
be executed at Closing substantially in the form attached hereto as Exhibit 3.1
(a "Warrant"). The Warrant Consideration shall consist of a fractional share
the numerator of which is 4,400,000 and the denominator of which is the number
of shares of Company Common Stock, on a fully diluted basis, outstanding on the
Closing Date. Subject to the terms of the Warrant Agreement, the Warrants
shall expire on the fifth anniversary of the Effective Time and shall have an
exercise price of $28.00 per full share if the Effective Time is prior to
October 1, 1996 and $26.00 per full share if the Effective Time is on or after
October 1, 1996. The Merger Consideration shall be paid net to the
shareholders (without interest) upon surrender of the certificate or
certificates that, immediately prior to the Effective Time, represented issued
and outstanding Company Common Stock (the "Certificates"). At the time of the
exercise of the Warrant each holder of a Warrant shall receive, in lieu of any
fractional share of Acquiror Common Stock, the fair market value of such
fractional share determined at the time of the exercise of the Warrant.
(b) At the Effective Time, all of the Company Common
Stock issued and outstanding immediately prior to the Effective
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Time, by virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be cancelled and retired and
shall cease to exist, and each holder of a Certificate representing any such
Company Common Stock shall thereafter cease to have any rights with respect to
such Company Common Stock, except each holder (other than the Company, Acquiror
or Sub or any direct or indirect Subsidiary of the Company, Acquiror or Sub)
will have the right to receive, without interest, the Merger Consideration for
such Company Common Stock upon the surrender of such Certificate or
Certificates in accordance with subsection 3.2(b).
(c) At the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time and
owned by the Company, Acquiror, Sub or any direct or indirect Subsidiary of the
Company, Acquiror or Sub, or held in the treasury of the Company immediately
prior to the Effective Time, shall no longer be outstanding, shall be cancelled
without payment of any consideration therefor and shall cease to exist, and
each holder of a Certificate representing any such Company Common Stock shall
thereafter cease to have any rights with respect to such Company Common Stock.
(d) At the Effective Time, each share of common stock,
of Sub issued and outstanding immediately prior to the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof,
shall be converted into and become one fully-paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
(e) The Company shall use its reasonable best efforts
to (i) cause all outstanding options to purchase shares of Company Common Stock
(each, an "Option") issued pursuant to the Company's 1993 Stock Option Plan or
the 1994 Directors Stock Option Plan (collectively, the "Stock Option Plans")
to become fully vested and exercisable and (ii) obtain from each holder of any
Option an agreement, in form and substance reasonably satisfactory to Acquiror,
to surrender as of the Effective Time all outstanding Options, in consideration
of the payment at the Effective Time of an amount of cash per share subject to
each such Option equal to the difference between the exercise price of such
Option and the Cash Consideration (less an amount equal to all taxes required
to be withheld from such payment), plus for each share subject to such Option,
the Warrant Consideration, or, alternatively, acquire upon payment of the
exercise price an amount of cash equal to the Cash Consideration, less an
amount equal to all taxes required to be withheld, in lieu of each share
formerly covered thereby, plus for each share covered by such Option, the
Warrant Consideration.
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3.2 EXCHANGE PROCEDURES.
(a) Securities Transfer Company shall act as exchange
agent (the "Exchange Agent") for the payment of the Merger Consideration upon
surrender of Certificates converted into the right to receive the Merger
Consideration pursuant to the Merger. Immediately after the Effective Time,
Acquiror shall make available, or cause Sub or the Surviving Corporation to
make available, to the Exchange Agent immediately available funds in an amount
necessary for the payment of the Cash Consideration (the "Funds"), and the
Warrants necessary for payment of the Warrant Consideration.
(b) Promptly after the Effective Time, the Exchange
Agent shall mail to each Person (as defined in Section 6.1 hereof) who was, at
the Effective Time, a holder of record of a Certificate or Certificates (other
than the Company, Acquiror or Sub or any direct or indirect Subsidiary of the
Company, Acquiror or Sub), a letter of transmittal and instructions for use in
effecting the surrender of the Certificates, in exchange for payment of the
Merger Consideration therefor. The letter of transmittal shall specify that
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery to and receipt of such Certificates by the Exchange Agent and
shall be in such form and have such provisions as Acquiror shall reasonably
specify. Upon surrender to the Exchange Agent of such Certificates, together
with the letter of transmittal, duly executed and completed in accordance with
the instructions thereto and such other documents as may be reasonably required
by the Exchange Agent, the Exchange Agent shall promptly issue to the persons
entitled thereto, out of the Funds, by check, the amount of cash to which such
Persons are entitled pursuant to Section 3.1 after giving effect to any
required tax withholdings, and the Warrants to which such Persons are entitled,
and such Certificates shall forthwith be marked to evidence cancellation. No
interest will be paid or will accrue on any portion of the Merger
Consideration. If payment is to be made to a Person other than the registered
holder of the Certificates surrendered, it shall be a condition of such payment
that the Certificates so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the Person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a Person other
than the registered holder of the Certificates surrendered or establish to the
satisfaction of the Surviving Corporation or the Exchange Agent that such tax
has been paid or is not applicable. Until surrendered as contemplated by this
Section 3.2, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration into which the Company Common Stock represented by such
Certificate shall have been converted pursuant to Section 3.1.
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(c) One hundred eighty days following the Effective
Time, Acquiror shall be entitled to cause the Exchange Agent to deliver to it
any Funds (including any interest, dividends, earnings or distributions
received with respect thereto which shall be paid as directed by Acquiror) and
Warrants made available to the Exchange Agent by Acquiror which have not been
disbursed, and thereafter holders of Certificates who have not theretofore
complied with the instructions for exchanging their Certificates shall be
entitled to look only to the Acquiror for payment as general creditors thereof
with respect to the cash payable and Warrants issuable upon due surrender of
their Certificates.
(d) Acquiror shall pay all charges and expenses,
including those of the Exchange Agent, in connection with the exchange of the
Merger Consideration for Certificates.
(e) Notwithstanding anything to the contrary in this
Section 3.2, none of the Exchange Agent, Acquiror, the Company, the Surviving
Corporation or Sub shall be liable to a holder of a Certificate formerly
representing Company Common Stock for any amount properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
(f) From and after the Effective Time, there shall be
no transfers on the stock transfer books of the Surviving Corporation of
Company Common Stock that was outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to Acquiror,
the Surviving Corporation or the Exchange Agent, they shall be cancelled and
exchanged for the Merger Consideration, as provided in this Article 3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to Acquiror (the "Company Disclosure Memorandum") or in
the Company Reports (as defined in Section 4.6), the Company represents and
warrants to Acquiror as of the date of this Agreement as follows:
4.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. The Company is duly qualified to do business, and in good
standing, in the states of the United States in which the character of the
properties owned or leased by it or the conduct of its business requires it to
be so qualified, except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect. For purposes of this
Agreement, the term "Material Adverse Effect" means, with respect
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to the Company, the Surviving Corporation, Acquiror or Sub, a material adverse
effect on the business, assets, liabilities, financial condition or results of
operations of such party and its Subsidiaries taken as a whole or a material
adverse effect on the ability of such party to perform its obligations
hereunder; PROVIDED, HOWEVER, that results of operations shall not be a
component of Material Adverse Effect for events that occur after the date of
this Agreement, PROVIDED, FURTHER, HOWEVER, that no Material Adverse Effect
shall be deemed to have occurred by reason of a general deterioration in the
economy or in the broadcasting industry after the date of this Agreement. The
Company has furnished to Acquiror complete and correct copies of its Articles
of Incorporation and By-laws, as amended through the date hereof. Such
Articles of Incorporation and By-laws are in full force and effect and no other
organizational documents are applicable to or binding upon the Company.
4.2 AUTHORIZATION, VALIDITY AND EFFECT. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby to be executed and
delivered by it, and, subject to receipt of necessary shareholder approval, to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and such other agreements and documents, and the
consummation of the transactions contemplated herein and therein, have been
duly and validly authorized by all necessary corporate action in respect
thereof on the part of the Company, subject, with respect to this Agreement, to
the approval of the shareholders of the Company as set forth below. This
Agreement has been duly and validly executed and delivered by the Company and
represents the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
4.3 CAPITALIZATION. (a) The authorized capital stock of the
Company consists of (i) 500,000,000 shares of Company Common Stock, of which,
as of February 9, 1996, 20,236,633 shares were issued and outstanding, (ii)
125,000,000 shares of Class B Common Stock, par value $.01 per share (the
"Class B Shares"), of which no shares are issued and outstanding, and (iii)
9,500,000 shares of Preferred Stock, par value $.01 per share (the "Company
Preferred Shares"), of which no shares are issued and outstanding (the Company
Common Stock, the Class B Shares and the Company Preferred Shares are referred
to herein, collectively, as the "Company Capital Stock"). All of the issued
and outstanding shares of Company Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable. As of February 9, 1996, the
Company had outstanding Options representing the right to acquire from the
Company not more than 1,611,437.5 shares of Company Common Stock. All such
Options, the recipient of the Option, the grant date, exercise price, vesting
and other material terms are described in Section 4.3(b) of the Company
Disclosure Memorandum.
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(b) Except as set forth in subsection 4.3(a), there
are no shares of capital stock or other equity securities of the Company
outstanding, and except as set forth in subsection 4.3(b) of the Company
Disclosure Memorandum, no outstanding options, warrants or rights to subscribe
for, securities or rights convertible into or exchangeable for, or contracts,
commitments or arrangements by which the Company is or may be required to issue
or sell (collectively, "Equity Rights") additional shares of the Company
Capital Stock.
(c) Since February 9, 1996, the Company has not (i)
issued any shares of Company Capital Stock or Equity Rights for shares of
Company Capital Stock, other than pursuant to the exercise of Options that were
issued and outstanding on February 9, 1996, (ii) purchased, redeemed or
otherwise acquired, directly or indirectly through one or more Company
Subsidiaries, any shares of Company Capital Stock, or (iii) declared, set
aside, made or paid to the shareholders of the Company dividends or other
distributions on the outstanding Company Common Stock.
4.4 COMPANY SUBSIDIARIES. (a) Subsection 4.4(a) of the Company
Disclosure Memorandum lists all material Subsidiaries of the Company (the
"Material Company Subsidiaries") and all other Subsidiaries. No Subsidiary
other than the Material Company Subsidiaries has any material operations, or
any liabilities. Except as indicated in subsection 4.4(a) of the Company
Disclosure Memorandum, all of the outstanding shares of capital stock of each
such Material Company Subsidiary are owned by the Company either directly or
indirectly through another Material Company Subsidiary. Except as set forth in
subsection 4.4(a) of the Company Disclosure Memorandum, no equity securities of
any Material Company Subsidiary may be required to be issued (other than to the
Company or another Material Company Subsidiary) by reason of any Equity Rights
for shares of the capital stock of any Material Company Subsidiary. Except as
set forth in subsection 4.4(a) of the Company Disclosure Memorandum, there are
no contracts, commitments, understandings or arrangements by which the Company
or any Material Company Subsidiary is or may be obligated to transfer any
shares of the capital stock of any Material Company Subsidiary. Except as set
forth in subsection 4.4(a) of the Company Disclosure Memorandum, all of the
outstanding shares of capital stock of each Material Company Subsidiary held by
the Company or any Material Company Subsidiary are fully paid and nonassessable
and are owned by the Company or such Material Company Subsidiary free and clear
of any claim, lien or encumbrance. Each Material Company Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, has the corporate 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
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it to be so qualified, except for such jurisdictions in which the failure to be
so qualified and in good standing would not have a Material Adverse Effect. As
used in this Agreement, the term "Subsidiary" shall mean, with respect to the
Company or Acquiror, any corporation or other legal entity of which such party
or any of its subsidiaries controls or owns, directly or indirectly, more than
50% of the stock or other equity interest entitled to vote on the election of
members to the board of directors or similar governing body.
(b) Except for interests in the Company's Subsidiaries
and except as set forth in subsection 4.4(b) of the Company Disclosure
Memorandum, neither the Company nor any of the Material Company Subsidiaries
owns, directly or indirectly, any interest or investment (whether equity or
debt) in any corporation, partnership, joint venture, business, trust or
entity, other than (i) investments of less than $1,000,000 in the aggregate and
(ii) promotional activities undertaken in the ordinary course of business.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) None of the
execution and delivery of this Agreement by the Company, nor the consummation
by the Company of the transactions contemplated herein, nor compliance by the
Company with any of the provisions hereof, will (i) conflict with or result in
a breach of any provision of the articles of incorporation or by-laws or
equivalent organizational documents of the Company or any of the Material
Company Subsidiaries, (ii) except as set forth in clause 4.5(a)(ii) of the
Company Disclosure Memorandum, constitute or result in the breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result
in the creation of any lien, charge or encumbrance upon, any property or assets
of the Company or the Material Company Subsidiaries, pursuant to any note,
bond, mortgage, indenture, license, agreement, lease or other instrument or
obligation to which any of them is a party or by which any of them or any of
their properties or assets may be subject, and that would, in any such event,
have a Material Adverse Effect, or (iii) subject to receipt of the requisite
approvals referred to in subsection 4.5(b), violate any order, writ,
injunction, decree, statute, rule or regulation of any governmental,
quasi-governmental, judicial, quasi-judicial or regulatory authority with
jurisdiction, domestic or foreign (each, a "Governmental Authority") applicable
to the Company or any of the Material Company Subsidiaries or any of their
properties or assets.
(b) Other than (i) in connection or compliance with
the provisions of applicable state and federal securities laws, and the rules
and regulations of the Securities and Exchange Commission (the "SEC")
thereunder, (ii) notices under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (iii) applicable approvals of the Federal
Communications Commission
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(the "FCC") pursuant to applicable laws and regulations ("Communications Law");
(iv) filings with the Department of State of the State of Florida required to
effect the Merger under the FBCA, (v) in connection or compliance with the
applicable requirements of the Internal Revenue Code of 1986, as amended, (the
"Code") and state, local and foreign tax laws, (vi) as set forth in subsection
4.5(b) of the Company Disclosure Memorandum, and (vii) where the failure to
give such notice, make such filing or receive such order, authorization,
exemption, consent or approval would not have a Material Adverse Effect, no
notice to, filing with, authorization of, exemption by or consent or approval
of any Governmental Authority is necessary for the consummation by the Company
of the transactions contemplated in this Agreement.
(c) The affirmative written consents of the Consenting
Stockholders are the only votes or consents of the holders of any class or
series of Company Capital Stock necessary to approve this Agreement, the Merger
and the transactions contemplated hereby on behalf of the Company.
4.6 COMPANY REPORTS; FINANCIAL STATEMENTS. (a) The Company has
filed all forms, reports and documents required to be filed by it with the SEC
since January 1, 1994 (collectively, the "Company Reports"). As of their
respective dates, the Company Reports and any such reports, forms and other
documents filed by the Company with the SEC after the date of this Agreement
(i) complied when made, or shall comply when made, as to form in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated thereunder and
(ii) did not when made, or shall not when made, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The representation in clause (ii)
of the preceding sentence does not apply to any misstatement or omission in any
Company Report filed prior to the date of this Agreement that was superseded by
a subsequent Company Report filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Company and
its Subsidiaries as of December 31, 1993 and December 31, 1994 and the related
statements of operations, changes in shareholders' equity and cash flows for
the year ended December 31, 1994, together with the notes thereto, are included
in the Company's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1993 and December 31, 1994, respectively, as filed with the SEC,
and the unaudited consolidated balance sheets of the Company and its
Subsidiaries as of March 31, 1995, June 30, 1995 and September 30, 1995, and
the related unaudited statements of operations, changes in shareholders' equity
and cash flows for the periods then
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ended are included in the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995,
respectively, as filed with the SEC (together, the "Company Financial
Statements"). The Company Financial Statements have been prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis (except as disclosed therein) and fairly present,
in all material respects, the consolidated financial position and the
consolidated results of operations, changes in shareholders' equity and cash
flows of the Company and its consolidated Subsidiaries as of the dates and for
the periods indicated (subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which are expected to be
material, and the absence of footnote disclosure).
(c) As of the date of this Agreement, except as set
forth in the Company Financial Statements or the notes thereto, or as described
in the Company Disclosure Memorandum, neither the Company nor any Subsidiary
has any material outstanding claims against it, liabilities or indebtedness,
contingent or otherwise, nor does there exist any condition, fact or
circumstances which the Company reasonably anticipates will create such claim
or liability, other than liabilities incurred subsequent to September 30, 1995,
in the ordinary course of business, consistent with past practices and which
individually and in the aggregate do not have a Material Adverse Effect.
(d) Since December 31, 1994 and except as disclosed in
the Company Reports, the Company and the Material Company Subsidiaries have
conducted their respective businesses only in the ordinary course and
consistent with past practices and have not subjected any of their assets or
properties to any Liens (except in connection with acquisitions disclosed in
the Company Reports).
(e) From December 31, 1994 through the date of this
Agreement, except as disclosed in the Company Disclosure Memorandum and the
Company Reports, there has been no event, condition or operation that has
caused or is reasonably anticipated to cause a Material Adverse Effect on the
Company.
4.7 TAX AND ACCOUNTING MATTERS. The Company and each of the
Material Company Subsidiaries have filed all material federal, state, county,
local and foreign tax returns, including information returns, required to be
filed by it, and paid or made adequate provision for the payment of all taxes
shown on such returns to be owed by it, including those with respect to income,
withholding, social security, unemployment, workers compensation, franchise, ad
valorem, premium, excise and sales taxes. The federal income tax returns of
the Company and the Material Company Subsidiaries for the fiscal year ended
December 31, 1985 and for all fiscal years prior thereto and fiscal years ended
December 31, 1989, December 31, 1990 and December 31, 1991 are closed by the
relevant statute
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of limitations, and no claims for additional taxes for such fiscal years are
pending. Except as disclosed in Section 4.7 of the Company Disclosure
Memorandum, neither the Company nor any of the Material Company Subsidiaries is
a party to any pending action or proceeding, nor, to the actual knowledge of
the officers of the Company listed in Section 4.7 of the Company Disclosure
Memorandum (the "Company's Knowledge"), is any such action or proceeding
threatened, by any Governmental Authority for the assessment or collection of
taxes, interest, penalties or deficiencies that would reasonably be expected to
have a Material Adverse Effect.
4.8 PROPERTIES. Except as disclosed or reserved against in the
Company Financial Statements, the Company and the Material Company Subsidiaries
have good and marketable title to all of the material properties and assets,
tangible or intangible, reflected in the Company Financial Statements as being
owned by the Company and the Material Company Subsidiaries as of the dates
thereof, free and clear of all liens, encumbrances, charges, defaults or
equities of whatever character, except such imperfections or irregularities of
title, liens, encumbrances, charges or defaults that are publicly disclosed or
such imperfections or irregularities of title as do not affect the use thereof
in any material respect and statutory liens securing payments not yet due
("Liens"). All leased buildings and all leased fixtures, equipment and other
property and assets that are material to its business on a consolidated basis
are held under leases or subleases that are valid instruments enforceable in
accordance with their respective terms. Section 4.8 of the Company Disclosure
Memorandum contains a list of all real estate owned or leased by the Company or
a Material Company Subsidiary, identifying which properties are owned and which
are leased. All such leases were entered into in the ordinary course of
business. Other than as indicated in the Company Disclosure Memorandum, none
of the leases are with an Affiliate or contain any material terms or conditions
which make any such lease unreasonably onerous or commercially unreasonable.
4.9 COMPLIANCE WITH LAWS; FCC AUTHORIZATIONS. (a) Except as
set forth in subsection 4.9(a) of the Company Disclosure Memorandum, and except
for environmental matters, which shall be covered by Section 4.16 and which
shall not be covered by this Section 4.9, to the Company's Knowledge, each of
the Company and the Material Company Subsidiaries:
(i) is in material compliance with all laws,
regulations, reporting and licensing requirements and orders
applicable to its business or employees conducting its business, the
breach or violation of which would have a Material Adverse Effect;
(ii) has received no notification or communication from
any Governmental Authority (i) asserting that the Company or any of
the Material Company Subsidiaries is
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not in compliance with any of the statutes, regulations or ordinances
that such Governmental Authority enforces, which noncompliance would
have a Material Adverse Effect or (ii) threatening to revoke any
license, franchise, permit or authorization of any Governmental
Authority, which revocation would have a Material Adverse Effect.
(b) Set forth in subsection 4.9(b) of the Company
Disclosure Memorandum is a list of the FCC licenses (the "Station Licenses")
that are required for the lawful conduct of the radio and television
broadcasting business and operations of the Company and its Material Company
Subsidiaries (the "Stations") in the manner and to the full extent they are now
conducted. The Company or a Subsidiary thereof is the authorized legal holder
of the Station Licenses, none of which is subject to any material restriction
or condition which would limit the full operation of the Stations as now
operated. Except as set forth in subsection 4.9(b) of the Company Disclosure
Memorandum, there are no applications, complaints or proceedings pending or, to
the Company's Knowledge, threatened before the FCC relating to the business or
operations of the Stations other than applications, complaints or proceedings
which generally affect the radio or television broadcasting industries or those
that would not have, individually or in the aggregate, a Material Adverse
Effect on the Company. The Station Licenses listed in subsection 4.9(b) of the
Company Disclosure Memorandum are validly held, are in good standing and are in
full force and effect and are unimpaired by any act. Except as set forth in
subsection 4.9(b) of the Company Disclosure Memorandum, to the Company's
Knowledge, there is no reason related to the Company why the FCC would not
approve the transfer of control of the Company to Acquiror or any of its
Subsidiaries and the renewal of the Station Licenses upon the expiration of the
current term of each such Station License. Except as set forth in subsection
4.9(b) of the Company Disclosure Memorandum, all reports, forms and statements
required to be filed by the Company with the FCC with respect to the Stations
since the grant of the last renewal of the Station Licenses have been timely
filed and are complete and accurate, except where the failure to so file or
where the failure to be complete and accurate would, individually or in the
aggregate, not have a Material Adverse Effect on the Company. Except as set
forth in subsection 4.9(b) of the Company Disclosure Memorandum, each Station
is being operated in compliance with the Communications Law and the
specifications of the Station Licenses, in each case in all material respects.
4.10 EMPLOYEE BENEFIT PLANS.
(a) Except as specified in the Company Disclosure
Memorandum, neither the Company nor any Material Company Subsidiary has an
"employee pension benefit plan" as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including any
"multiemployer plan" as defined in Section
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3(37) of ERISA (such plans so noted shall be referred to as the "Retirement
Plans"), "employee welfare benefit plan" as defined in Section 3(1) of ERISA
including without limitation post-employment benefit and retiree medical plans,
funds and programs ("Benefit Plans") or a "specified fringe benefit plan" as
defined in Section 6039D of the Code ("SFB Plans") (together, the Retirement
Plans, Benefit Plans and SFB Plans noted in the Company Disclosure Memorandum
shall be referred to collectively as the "Plans" and individually as a "Plan").
All Plans are maintained by the Company.
(b) Each Plan is, and has been at all times, operated
in material compliance with all statutes, orders or governmental rules or
regulations, including but not limited to ERISA and the Code, and any and all
collective bargaining agreements and other contracts applicable thereto.
(c) The Retirement Plans, and their related trusts, if
any, are qualified and tax-exempt under Sections 401 and 501 of the Code. The
Company has received favorable determination letters from the Internal Revenue
Service with respect to the qualification and tax exempt status of the
Retirement Plans and their related trusts, if any, under the Code, and nothing
has occurred (or failed to occur) since the receipt of such determination
letters to cause a loss of the Plans' qualification and tax-exempt status.
(d) All material required reports and descriptions of
the Plans (including IRS Form 5500 Annual Reports, Summary Annual Reports and
Summary Plan Descriptions) have been appropriately filed and distributed.
(e) All material notices required by ERISA, the Code
or any other state or federal law, ruling or regulation with respect to the
Plans have been appropriately filed.
(f) All contributions to the Plans for all periods
ending on or before the Closing Date will be made prior to the Closing Date by
the Company and each Material Company Subsidiary in accordance with past
practice and no Plans are currently or shall be unfunded or underfunded as of
the Closing Date.
(g) All insurance premiums (including premiums to the
Pension Benefit Guaranty Corporation) relating to the Plans have been paid in
full in a timely manner.
(h) With respect to the Plans, no prohibited
transactions (as defined in Section 406 of ERISA or Section 4975 of the Code)
that would result in liability to the Company have occurred and no reportable
events (as defined in Section 4043 of ERISA) have occurred.
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(i) There is not, and has not been, an accumulated
funding deficiency with respect to the Retirement Plans subject to the minimum
funding requirements of Section 412 of the Code or Section 302 of ERISA that
has resulted in any material liability to the Company that has not been
satisfied in full.
(j) No material action, suit, grievance, arbitration
or other manner of litigation, or claim with respect to the Plans or the assets
thereof (other than routine claims for benefits made in the ordinary course of
plan administration) are pending, threatened against or with respect to the
Plans, the Company, any Material Company Subsidiary or any fiduciaries (as
defined in Section 3(21) of ERISA) of the Plans (including any action, suit,
grievance, arbitration or other manner of litigation, or claim regarding
conduct which allegedly interferes with the attainment of rights under a Plan).
(k) Except as set forth in the Company Disclosure
Memorandum, neither the Company nor any Material Company Subsidiary has ever
contributed, nor has it ever been required to contribute, to any "multiemployer
plans" (as defined in Section 3(37) of ERISA) and neither the Company nor any
Material Company Subsidiary has or will incur any withdrawal liability with
respect to any such plans.
(l) Except as set forth in the Company Disclosure
Memorandum, neither the Company nor any Material Company Subsidiary has any
stock purchase plan, stock option plan, phantom stock plan, stock appreciation
rights plan, bonus plan or any severance, deferred compensation or retirement
plans or similar agreements (whether or not subject to ERISA).
(m) The Company and each Material Company Subsidiary
has complied with COBRA in all material respects.
(n) Any and all post-employment benefit plans, funds
and programs and retiree medical plans, funds and programs of the Company or
its Material Company Subsidiaries have been fully funded and neither the
Company nor any Material Company Subsidiary has any further obligation to make
any additional contributions to such plans.
4.11 MATERIAL CONTRACTS. Set forth in Section 4.11 of the
Company Disclosure Memorandum is a list, as of the date hereof, of the
following agreements (the "Company Contracts"):
(a) each partnership or joint venture agreement to
which the Company or any Material Company Subsidiary is a party;
(b) each agreement limiting the right of the Company
or any Material Company Subsidiary to engage in or compete with any Person in
any business or geographical area;
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(c) each agreement or other arrangement of or
involving the Company or any Material Company Subsidiary with respect to
indebtedness for money borrowed, including letters of credit, guaranties,
indentures, swaps and similar agreements;
(d) each management, consulting, employment, severance
or similar agreement requiring the payment of compensation in excess of
$150,000 annually, to which the Company or any of the Material Company
Subsidiaries is a party, other than agreements with on-air talent;
(e) each collective bargaining agreement to which the
Company or any Material Company Subsidiary is a party;
(f) each agreement with a national sales
representative to which the Company or any Material Company Subsidiary is a
party;
(g) each network affiliation agreement to which the
Company or any Material Company Subsidiary is a party; and
(h) each agreement with any Affiliate of the Company
(other than employment agreements) to which the Company or any Material Company
Subsidiary is a party which involves total payments or liabilities to or from
the Company or any Material Company Subsidiary in excess of $60,000.
Each of the Company Contracts is in full force and effect and is a legal, valid
and binding contract or agreement, and there is no default or breach (or, to
the Company's Knowledge, any event that, with the giving of notice or lapse of
time or both would result in a material default or breach) by the Company or
any of the Material Company Subsidiaries, or, to the Company's Knowledge, any
other party, in the timely performance of any obligation to be performed or
paid thereunder or any other material provision thereof, that, individually or
in the aggregate, would have a Material Adverse Effect. The Company
acknowledges that there are certain material contracts (including without
limitation agreements concerning radio syndicated programming and network
affiliation and other material agreements which are not available at the
Company's corporate offices on the date hereof), some of which are listed on
Section 4.11 of the Company Disclosure Memorandum and some of which are not,
that have not been furnished to Acquiror as of the date of this Agreement (the
"Undisclosed Contracts"). Within ten days after the date hereof, the Company
will deliver to Acquiror copies of all Undisclosed Contracts.
4.12 LEGAL PROCEEDINGS. As of the date of this Agreement, except
as disclosed in the Company Reports or as set forth in Section 4.12 of the
Company Disclosure Memorandum, there are no actions, suits, investigations or
proceedings instituted or pending, or to the Company's Knowledge, overtly
threatened, against
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the Company or any of the Material Company Subsidiaries, or against any
property, asset, interest or right of any of them, that involve more than
$100,000 in controversy, or that seek relief other than money damages from the
Company or a Subsidiary, or that would have, either individually or in the
aggregate, a Material Adverse Effect if adversely decided. Neither the Company
nor any of the Material Company Subsidiaries is subject to any judgment, order,
writ, injunction or decree that would have a Material Adverse Effect.
4.13 CERTAIN INFORMATION. (a) When the Registration Statement
(as defined in Section 6.4) to be filed with the SEC by Acquiror pursuant to
Section 6.4 hereof or any post-effective amendment thereto shall become
effective, and at all times subsequent to such effectiveness up to and
including the Effective Time, such Registration Statement and all amendments or
supplements thereto, with respect to all information set forth therein
furnished by the Company relating to the Company or its Subsidiaries, shall
comply as to form in all material respects with the provisions of all
applicable securities laws. Any written information supplied or to be supplied
by the Company specifically for inclusion in the Registration Statement will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made not misleading.
(b) None of the information supplied or to be supplied
by the Company for inclusion in the Information Statement (as defined in
Section 6.4) shall, at the time such document is filed with the SEC and when it
is first mailed to the shareholders of the Company, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event occurs which should be described in the Information Statement or any
supplement or amendment thereto, the Company will file and disseminate, as
required, a supplement or amendment which complies as to form in all material
respects with the provisions of all applicable securities laws. Prior to its
filing with the SEC, the Information Statement and each amendment or supplement
thereto shall be delivered to Acquiror and its counsel. All documents that the
Company is responsible for filing with the SEC or any other Governmental
Authority in connection with the transactions contemplated hereby shall comply
as to form in all material respects with the provisions of applicable law and
the applicable rules and regulations thereunder.
4.14 NO BROKERS. The Company has not entered into any contract,
arrangement or understanding with any Person or firm that may result in the
obligation of the Company, Acquiror or Sub to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated
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hereby, except that the Company has retained Salomon Brothers Inc as its
financial advisor (the "Company Financial Advisor"), which Financial Advisor
may be entitled to an advisor fee of up to $3.0 million in connection with the
transactions contemplated hereby. In addition, the Company may reimburse
certain third parties for legal expenses incurred by such third parties not to
exceed $250,000 in the aggregate.
4.15 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of the Company Financial Advisor to the effect that, as of the date
hereof, the consideration to be received by the holders of the Company Common
Stock in the Merger is fair to such holders from a financial point of view. A
copy of such opinion shall be delivered to Acquiror within 24 hours of its
receipt by the Company.
4.16 ENVIRONMENTAL. Except insofar as inaccuracies in the
following statements would not have a Material Adverse Effect on the Company:
(i) The properties owned or leased by the Company or any Subsidiary and
properties formerly owned or leased by the Company or any Subsidiary for which
the Company has contractual liability (the "Company Properties") are in
compliance in all material respects with all applicable federal, state and
local environmental and hazardous waste laws and regulations; (ii) no
enforcement actions are pending or threatened against the Company or any
Subsidiary and no notice of potential liability or administrative or judicial
proceedings (including notices regarding clean up of off-site third party
hazardous waste sites) has been received; (iii) there does not now exist on the
Company Properties, and there has not occurred on, from or under the Company
Properties, a material disposal or release of, Hazardous Substances, Hazardous
Wastes or Contaminants; (iv) the Company Properties contain no unregistered
underground storage tanks; (v) neither the Company nor any Subsidiary nor any
of their respective predecessors has any contingent liability in connection
with the release of any Hazardous Substances, Hazardous Wastes or Contaminants
into the environment; (vi) all broadcast facilities operated by the Company or
any Subsidiary are, and at all times prior hereto were, in compliance with all
applicable rules and regulations relating to RF radiation produced by a
broadcast station; and (vii) neither the Company or any Subsidiary nor any of
their respective predecessors has (A) given any release or waiver of liability
that would waive or impair any claim based on Hazardous Substances, Hazardous
Wastes or Contaminants to any current or prior tenant or owner of any real
property owned or leased at any time by either the Company or any Subsidiary or
to any party who may be potentially responsible for the presence of Hazardous
Substances, Hazardous Wastes or Contaminants on any such real property; or (B)
made any promise of indemnification to any party regarding Hazardous
Substances, Hazardous Wastes or Contaminants that may be located on any real
property owned or leased at any time by either the Company or any Subsidiary or
any
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of their respective predecessors. Section 4.16 of the Company Disclosure
Memorandum contains a description of environmental indemnities of which either
the Company or any Subsidiary is a beneficiary.
4.17 PERSONNEL.
(a) Except as disclosed in Sections 4.10 and 4.11 of
the Company Disclosure Memorandum, or as required pursuant to Section 6.6(c)
hereof, there is no employment agreement, employee benefit or incentive
compensation plan or program or severance policy or program to which the
Company or any Material Company Subsidiary is a party (i) that is or could,
pursuant to its terms, be triggered or accelerated by reason of or in
connection with the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement or (ii) which contains "change in
control" provisions pursuant to which the payment, vesting or funding of
compensation or benefits is or by reason of or in connection with the execution
of or consummation of the transactions contemplated by this Agreement or the
transactions contemplated by this Agreement.
(b) Except as set forth on Section 4.11 of the Company
Disclosure Memorandum, there are no labor disputes existing, or to the
Company's Knowledge, threatened, involving strikes, work stoppages, slow downs
or lockouts. There are no grievance proceedings or claims of unfair labor
practices filed or, to the Company's Knowledge, threatened to be filed with the
National Labor Relations Board against the Company or any Material Company
Subsidiary. To the Company's Knowledge, there is no union representation or
organizing effort pending or threatened against the Company or any Material
Company Subsidiary. Neither the Company nor any Material Company Subsidiary
has agreed to recognize any union or other collective bargaining unit except
those governed by the terms of the agreements listed in Section 4.11 of the
Company Disclosure Memorandum.
4.18 TAKEOVER STATUTES. No "fair price", "moratorium", "control
share acquisition" or other similar anti-takeover statute or regulation enacted
under any federal or state or other foreign law, applicable to the Company is
applicable to the Merger or the other transactions contemplated hereby.
4.19 CASH FLOW. The sum of the Company's (i) operating income,
(ii) amortization and depreciation and (iii) corporate, general and
administrative expenses, each as reflected in the Company's Audited Statement
of Operations contained in its Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, shall not be less than $52,711,000.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUB
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to the Company (the "Acquiror Disclosure Memorandum"),
Acquiror and Sub represent and warrant to the Company as of the date of this
Agreement as follows:
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5.1 ORGANIZATION AND STANDING. Each of Acquiror and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of its incorporation. Each of Acquiror and Sub is duly
qualified to do business, and in good standing, in the states of the United
States in which the character of the properties owned or leased by it or in
which the conduct of its business requires it to be so qualified, except where
the failure to be so qualified or to be in good standing would not have a
Material Adverse Effect. Acquiror has furnished to the Company complete and
correct copies of its Articles of Incorporation and Code of Regulations as
amended, through the date hereof. Such Articles of Incorporation and Code of
Regulations are in full force and effect and no other organizational documents
are applicable to or binding upon Acquiror.
5.2 AUTHORIZATION, VALIDITY AND EFFECT. Each of Acquiror and
Sub has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby to be executed
and delivered by it, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and such other
agreements and documents, and the consummation of the transactions contemplated
herein and therein, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of each of Acquiror and Sub.
This Agreement has been duly and validly executed and delivered by each of
Acquiror and Sub and represents the legal, valid and binding obligation of each
of Acquiror and Sub, enforceable against each of them in accordance with its
terms.
5.3 CAPITALIZATION. The authorized capital stock of Acquiror
consists of 40,000,000 Common Shares, of which, as of February 1, 1996,
18,163,425 shares were issued and outstanding (the "Acquiror Common Stock").
The Automatic Conversion (as such term is defined in the Amended and Restated
Articles of Acquiror) has occurred. Except as set forth in this Section 5.3 or
Section 5.3 of the Acquiror Disclosure Memorandum, there are no shares of
capital stock or other equity securities of Acquiror outstanding and there are
no outstanding Equity Rights for additional shares of Acquiror Capital Stock.
All of the issued and outstanding shares of Acquiror Common Stock are duly and
validly issued and outstanding and are fully paid and nonassessable.
5.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) None of the
execution and delivery of this Agreement by Acquiror or Sub, nor the
consummation by Acquiror or Sub of the transactions contemplated herein, nor
compliance by Acquiror or Sub with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of the articles of
incorporation or by-laws or equivalent organizational documents of Acquiror or
Sub, (ii) constitute or result in the breach of any term, condition or
provision of, or constitute a default under, or give rise to any
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right of termination, cancellation or acceleration with respect to, or result
in the creation of any lien, charge or encumbrance upon, any property or assets
of Acquiror or Sub or, pursuant to any note, bond, mortgage, indenture,
license, agreement, lease or other instrument or obligation to which either of
them is a party or by which either of them or their respective properties or
assets may be subject, and that would, in any such event, have a Material
Adverse Effect, or (iii) subject to receipt of the requisite approvals referred
to in subsection 5.4(b) of the Acquiror Disclosure Memorandum, to the actual
knowledge of the officers of Acquiror listed in clause 5.4(a)(iii) of the
Acquiror Disclosure Memorandum ("Acquiror's Knowledge"), violate any order,
writ, injunction, decree, statute, rule or regulation of any Governmental
Authority applicable to Acquiror, Sub or any of their respective properties or
assets.
(b) Other than (i) in connection or compliance with
the provisions of applicable state and federal securities laws, and the rules
and regulations of the SEC thereunder, including the registration of Warrants
issuable in the Merger at the Effective Time pursuant to the Registration
Statement, (ii) notices and completion of waiting periods under the HSR Act,
(iii) applicable approvals of the FCC, (iv) filings with the Department of
State of the State of Florida required to effect the Merger under the FBCA, (v)
in connection or compliance with the applicable requirements of the Code and
state, local and foreign tax laws, (vi) as set forth in subsection 5.4(b) of
the Acquiror Disclosure Memorandum, and (vii) where the failure to give such
notice, make such filing, or receive such authorization, exemption, consent or
approval would not have a Material Adverse Effect, no notice to, filing with,
authorization of, or exemption by, or consent or approval of any Governmental
Authority is necessary for the consummation by Acquiror or Sub of the
transactions contemplated in this Agreement.
(c) The affirmative vote of the shares of Acquiror
Common Stock beneficially owned by The Xxxx/Chilmark Fund L.P. at a meeting of
the shareholders of Acquiror duly called for such purpose is sufficient, and no
further vote or consent of any class or series of capital stock of Acquiror is
necessary, to approve the authorization for issuance by Acquiror of shares of
Acquiror Common Stock and Warrants in an amount necessary for payment of the
Merger Consideration.
5.5 ACQUIROR REPORTS; FINANCIAL STATEMENTS. (a) The Acquiror
has filed all forms, reports and documents required to be filed by it with the
SEC since January 1, 1994 (collectively, the "Acquiror Reports"). As of their
respective dates, the Acquiror Reports and any such reports, forms and other
documents filed by the Acquiror with the SEC after the date of this Agreement
(i) complied when made, or shall comply when made, as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations
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promulgated thereunder and (ii) did not when made, or shall not when made,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The representation in clause (ii) of the preceding sentence does
not apply to any misstatement or omission in any Acquiror Report filed prior to
the date of this Agreement that was superseded by a subsequent Acquiror Report
filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Acquiror
and its Subsidiaries as of December 31, 1993 and December 31, 1994 and the
related statements of operations, changes in shareholders' equity and cash
flows for the year ended December 31, 1994, together with the notes thereto,
are included in the Acquiror's Annual Reports on Form 10-K for the fiscal years
ended December 31, 1993 and December 31, 1994, respectively, as filed with the
SEC, and the unaudited consolidated balance sheets of the Acquiror and its
Subsidiaries as of March 31, 1995, June 30, 1995 and September 30, 1995, and
the related unaudited statements of operations, changes in shareholders' equity
and cash flows for the periods then ended are included in the Acquiror's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30,
1995 and September 30, 1995, respectively, as filed with the SEC (together, the
"Acquiror Financial Statements"). The Acquiror Financial Statements have been
prepared in accordance with GAAP applied on a consistent basis (except as
disclosed therein) and fairly present, in all material respects, the
consolidated financial position and the consolidated results of operations,
changes in shareholders' equity and cash flows of the Acquiror and its
consolidated Subsidiaries as of the dates and for the periods indicated
(subject, in the case of interim financial statements, to normal recurring
year-end adjustments, none of which are expected to be material, and the
absence of footnote disclosure). The Acquiror and its Subsidiaries do not have
any material liabilities not disclosed on the Acquiror Financial Statements.
5.6 LEGAL PROCEEDINGS. As of the date of this Agreement and
except as set forth in Section 5.6 of the Acquiror Disclosure Memorandum, there
are no actions, suits or proceedings instituted or pending, or to Acquiror's
Knowledge, overtly threatened, against Acquiror or Sub, or against any
property, asset, interest or right of any of them, that involve more than
$100,000 in controversy, or that seek relief other than money damages from the
Acquiror or any Subsidiary, or that would have, either individually or in the
aggregate, a Material Adverse Effect on Acquiror if adversely decided. Neither
Acquiror nor Sub is subject to any judgment, order, writ, injunction or decree
that would have a Material Adverse Effect.
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5.7 CERTAIN INFORMATION.
(a) When the Registration Statement or any
post-effective amendment thereto shall become effective, and at times
subsequent to such effectiveness up to and including the Effective Time, the
Registration Statement and all amendments or supplements thereto, shall comply
as to form in all material respects with the provisions of all applicable
securities laws. If at any time prior to the Effective Time any event occurs
which should be described in the Registration Statement or any supplement or
amendment thereto, Acquiror will file and disseminate, as required, a
supplement or amendment which complies as to form in all material respects with
the provisions of all applicable securities laws. Prior to its filing with the
SEC, the Registration Statement and each amendment or supplement thereto shall
be delivered to the Company and its counsel. With respect to any information
supplied by Acquiror, the Registration Statement will not, at the time the
prospectus included therein is mailed to shareholders of the Company, and at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) None of the information supplied or to be supplied
by Acquiror or Sub for inclusion in the Information Statement shall, at the
time such document is filed with the SEC or when it is first mailed to the
shareholders of the Company, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading. All documents that Acquiror or Sub are responsible for
filing with the SEC or any other Governmental Authority in connection with the
transactions contemplated hereby shall comply as to form in all material
respects with the provisions of applicable law and the applicable rules and
regulations thereunder.
(c) When the Registration Statement or any
post-effective amendment thereto shall become effective, and at times
subsequent to such effectiveness up to and including the Effective Time, the
Registration Statement and all amendments or supplements thereto, except with
respect to information set forth therein provided by the Company, shall not be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
5.8 OWNERSHIP OF COMPANY COMMON STOCK. Except as set forth in
Section 5.8 of the Acquiror Disclosure Memorandum, none of Acquiror nor, to
Acquiror's Knowledge, any Affiliates (as defined below) of Acquiror or Sub,
owns any shares of Company Common Stock or other securities convertible into
shares of Company Common Stock. For purposes of this Agreement, an "Affiliate"
of a
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specified Person is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
5.9 MERGER SUB. Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby. Sub is, and shall be on the
Closing Date, a wholly owned direct Subsidiary of Acquiror. Except for
obligations or liabilities incurred in connection with its incorporation or
organization, and the transactions contemplated hereby, Sub has not incurred
any obligations or liabilities or engaged in any business or activities of any
type or kind whatsoever or entered into any agreements or arrangements with any
Person or entity.
5.10 ACQUIROR'S FINANCING. Acquiror has or will have sufficient
funds available to consummate the transactions contemplated by this Agreement
and to pay all transaction related fees and expenses.
5.11 QUALIFICATION AS A LICENSEE. Acquiror will, from and after
the date upon which Acquiror executes the applications described in subsection
6.8, be legally, financially and otherwise qualified under the Communications
Law to be owner and operator of the properties and assets of the Surviving
Corporation, any of its Material Company Subsidiaries, or any Station. Except
as disclosed in Section 5.11 of the Acquiror Disclosure Memorandum or in the
Acquiror Reports, no fact exists that would under the Communications Law
disqualify Acquiror as the owner and operator of the properties or assets of
any Station.
5.12 NO BROKERS. Neither Acquiror nor Sub has entered into a
contract, arrangement or understanding with any Person or firm that may result
in the obligation of Acquiror, Sub or the Company to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 NO SOLICITATION AND OTHER ACTIONS. (a) From and after the
date of this Agreement and except as set forth in subsection 6.1(b), the
Company shall not, and the Company shall direct and use its reasonable best
efforts to cause the officers, directors, employees, agents, advisors and other
representatives of the Company not to, directly or indirectly, (i) solicit,
initiate, knowingly encourage, or participate in discussions or negotiations
regarding, any proposals or offers from any individual, corporation,
partnership, limited liability corporation, joint
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venture, trust, association, unincorporated organization, other entity, group
or Governmental Authority ("Person") relating to any Competing Transaction (as
defined in subsection 6.1(c)) or (ii) furnish to any other Person any nonpublic
information or access to such information with respect to, or otherwise
concerning, any Competing Transaction. The Company shall immediately cease and
cause to be terminated any existing discussions or negotiations with any third
parties conducted heretofore with respect to any proposed Competing
Transaction. The Company shall promptly disclose the identity of any Person
who attempts to initiate any discussions contemplating a Competing Transaction.
(b) Notwithstanding anything to the contrary contained
in this Section 6.1 or in any other provision of this Agreement, until the
consents required by the Stockholders Agreement have been duly executed and
delivered, the Company shall not be prohibited by this Agreement from (i)
participating in discussions or negotiations with, and, during such period, the
Company may furnish information to, a Person that seeks to engage in
discussions or negotiations, requests information or makes a proposal to
acquire the Company pursuant to a Competing Transaction, if the Company's
directors determine in good faith that such action is required for the
discharge of their fiduciary obligations, based upon the written advice of
independent legal counsel, who may be the Company's regularly engaged legal
counsel (a "Director Duty"); (ii) complying with Rule 14d-9 or Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer;
(iii) making any disclosure to the Company's shareholders in accordance with a
Director Duty; (iv) failing to make, modifying or amending its recommendations,
consents or approvals referred to herein in accordance with a Director Duty; or
(v) terminating this Agreement and entering into an agreement providing for a
Competing Transaction in accordance with a Director Duty. In the event that
the Company or any of its officers, directors, employees, agents, advisors or
other representatives participate in discussions or negotiations with, or
furnish information to a Person that seeks to engage in such discussions or
negotiations, requests information or makes a proposal to acquire the Company
pursuant to a Competing Transaction pursuant to this subsection 6.1(b), then:
(i) the Company shall immediately disclose to the Acquiror the decision of the
Company's directors; (ii) the identity of the Person; and (iii) copies of all
information or material not previously furnished to Acquiror which the Company,
or its agents, provides or causes to be provided to such Person or any of its
officers, directors, employees, agents, advisors or representatives.
(c) For the purposes of this Agreement, "Competing
Transaction" shall mean any of the following involving the Company: (i) any
merger, consolidation, share exchange, business combination or other similar
transaction; (ii) any sale, lease, exchange, transfer or other disposition of
all or substantially all of the assets of the Company and the Material Company
Subsidiaries, taken
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as a whole, in a single transaction or series of related transactions; or (iii)
any tender offer or exchange offer for shares of Company Common Stock.
6.2 INTERIM OPERATIONS OF THE COMPANY. Prior to the Effective
Time, except as contemplated by any other provision of this Agreement or as set
forth in Section 6.2 of the Company Disclosure Memorandum, unless Acquiror has
previously consented in writing thereto (which consent may be withheld only
after substantive discussions with representatives of the Company) the Company
shall not, and shall not permit any of the Material Company Subsidiaries to:
(a) grant any general increase in compensation or
benefits to its employees or to its officers, except in the ordinary course
consistent with past practice or as required by law; pay any bonus compensation
except in the ordinary course consistent with past practice or in accordance
with the provisions of any applicable program or plan adopted by the Board of
Directors of the Company or such Material Company Subsidiary prior to the date
hereof; enter into or amend the terms of any severance agreements with its
officers; or effect any change in retirement benefits for any class of its
employees or officers (unless such change is required by applicable law) that
would materially increase the retirement benefit liabilities of the Company and
the Material Company Subsidiaries on a consolidated basis; PROVIDED, HOWEVER,
that nothing in this subsection (a) shall prevent the payment or other
performance of any award or grant made prior to the date hereof and disclosed
in the Company Reports filed prior to the date hereof, the Company Disclosure
Memorandum or pursuant to this Agreement;
(b) amend, alter or revise any existing employment
contract, understanding, arrangement or agreement between the Company or any of
the Material Company Subsidiaries and any Person receiving compensation
(including salary and bonus) in excess of $150,000 per year (unless such
amendment is required by law) to increase the compensation (including bonus) or
benefits payable thereunder or pursuant thereto or enter into any new
employment contract, understanding, arrangement or agreement with any Person
having a salary thereunder in excess of $150,000 that the Company or such
Material Company Subsidiary does not have the unconditional right to terminate
without liability (other than liability for services already rendered) at any
time on or after the Effective Time;
(c) adopt any new employee benefit plan or make any
change in or to any existing Company ERISA Plans or Company Benefit
Arrangements other than any such change that (i) is required by law, (ii) in
the opinion of counsel is necessary or advisable to maintain the tax qualified
status of any such, plan, or (iii) would not materially increase, in the
aggregate, the employee benefit
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plan liabilities of the Company and the Material Company Subsidiaries, taken as
a whole;
(d) sell, lease or otherwise dispose of any of its
assets (including capital stock of Material Company Subsidiaries) or acquire
any business or assets, except in the ordinary course of business, in each case
for an amount not exceeding $1,000,000;
(e) incur any material amount of indebtedness for
borrowed money or make any loans, advances or capital contributions to, or
investments (other than non-controlling investments in the ordinary course of
business) in, any other Person other than a Subsidiary of the Company, or issue
or sell any debt securities, other than (i) borrowings in connection with
acquisitions permitted by subsection 6.2(d), (ii) borrowings under existing
lines of credit in the ordinary course of business not to exceed $5,000,000 in
the aggregate at any time outstanding and (iii) borrowings made or indebtedness
incurred to fund payments made in connection with the exercise of Options
pursuant to Section 3.1(e).
(f) except as set forth in subsection 6.2(f) of the
Company Disclosure Memorandum, authorize, commit to or make capital
expenditures in each case in an amount exceeding $6,000,000;
(g) mortgage or otherwise encumber or subject to any
Lien any material amount of properties or assets owned by the Company or any of
the Material Company Subsidiaries as of the date of this Agreement except for
such of the foregoing as are in the normal course of business;
(h) make any material change to its accounting
(including tax accounting) methods, principles or practices, except as may be
required by GAAP;
(i) amend or propose to amend its articles of
incorporation or by-laws or equivalent organizational documents;
(j) declare or pay any dividend or distribution with
respect to the Company Capital Stock;
(k) except pursuant to Options already granted as of
the date of this Agreement, issue, sell, deliver or agree to issue, sell,
deliver (whether through issuance or granting of options, warrants,
commitments, subscriptions or rights to purchase) any Company Capital Stock or
split, combine, reclassify or subdivide the Company Capital Stock;
(l) make any tax election or settle or compromise any
material tax liability for an amount greater than reflected on the Company's
Financial Statements;
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(m) except pursuant to Options already granted as of
the date of this Agreement, directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock or other securities;
(n) enter into any new lines of business or otherwise
make material changes to the operation of its business;
(o) except as to liabilities accrued on the books of
the Company as of the date of this Agreement, pay or agree to pay in settlement
or compromise of any suits or claims of liability against the Company, its
directors, officers, employees or agents, more than an aggregate of $100,000
for all such suits and claims;
(p) enter into any agreement providing the
acceleration or payment or performance or other consequence as a result of a
change in control of the Company;
(q) purchase any radio or television stations, enter
into any local marketing arrangements, joint sales agreement or similar
agreements;
(r) except as permitted under Sections 6.2(d), 6.2(e),
6.2(f) and 6.2(l), enter into any contract, agreement or understanding, whether
in the ordinary course of business or not, which would be the type of agreement
which, if entered into prior to the date hereof, would have to be disclosed
pursuant to Section 4.11 or which would obligate the Company or any Subsidiary
to make payments of more than $150,000 per year;
(s) take any action or agree, in writing or otherwise,
to take any of the foregoing actions or any action which would make any
representation or warranty in Article 4 hereof materially untrue or incorrect;
or
(t) commit to any of the foregoing.
6.3 SHAREHOLDER APPROVAL. (a) With respect to the Company, this
Agreement, the Merger, and the other transactions contemplated hereby are
subject to approval of the shareholders of the Company, and in connection
therewith, the Consenting Stockholders have entered into the Stockholders
Agreement, which requires the Consenting Stockholders to execute written
consents in favor of this Agreement and the Merger by 5:00 p.m. Eastern
Standard Time on the thirtieth day after the execution of this Agreement by the
Company unless the Agreement is terminated prior to such date.
(b) The authorization for issuance of shares of Acquiror
Common Stock and Warrants is subject to the approval of the shareholders of
Acquiror and in connection therewith, Xxxx/Chilmark L.P., the holder of in
excess of 69% of the outstanding Acquiror Common Stock has entered into the
Jacor
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Shareholder Agreement, the form of which is attached as Exhibit 6.3, pursuant
to which Xxxx/Chilmark L.P. has granted an irrevocable proxy to the Company
solely for the purpose of voting its shares of Acquiror Common Stock in favor
of any proposal for the authorization for issuance of such number of shares of
Acquiror Common Stock and Warrants as are necessary for payment of the Merger
Consideration.
(c) The Company and Acquiror shall each cause an
information statement to be mailed to their respective shareholders, and the
Company and Acquiror shall each furnish to the other all information concerning
itself that the other may reasonably request in connection with the
preparation, filing and mailing of such information statement.
6.4 INFORMATION STATEMENT; REGISTRATION STATEMENT. (a) As soon
as practicable following the date hereof, Acquiror and the Company shall
cooperate to prepare promptly and file with the SEC an Information Statement
with respect to the Merger (the "Information Statement") and a registration
statement on Form S-4 relating to the Warrants issuable in the Merger at the
Effective Time (the "Registration Statement"), subject, however, to deferral
until such time as Acquiror and the Company may reasonably agree in writing.
As soon as practicable following receipt of final comments from the staff of
the SEC on the Information Statement and Registration Statement (or advice that
such staff will not review such filing), Acquiror shall use its best efforts to
have the Registration Statement declared effective by the SEC and to maintain
the effectiveness of such Registration Statement until completion of the
Merger. Promptly after the effectiveness of the Registration Statement, the
Company shall mail the Information Statement to all holders of Company Common
Stock and holders of Acquiror Common Stock. Acquiror and the Company shall
cooperate with each other in the preparation of the Information Statement and
the Registration Statement and shall advise the other in writing if, at any
time prior to the Effective Time, any such party shall obtain knowledge of any
facts that might make it necessary or appropriate to amend or supplement the
Information Statement or the Registration Statement in order to make the
statements contained or incorporated by reference therein not misleading or to
comply with applicable law. Notwithstanding the foregoing, each party shall be
responsible for the information and disclosures which it makes or incorporates
by reference in all regulatory filings, the Information Statement and the
Registration Statement.
(b) Acquiror shall file, no later than the third business
day following the Closing, a registration statement with the SEC relating to
the issuance of shares of Acquiror Common Stock issuable upon exercise of the
Warrants ("Warrant Shares") (such registration statement to be referred to
herein as the "Warrant Shares Registration Statement"). Acquiror shall use its
reasonable best efforts to have the Warrant Shares Registration Statement
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declared effective and to cause the issuance of Warrant Shares to be
registered, qualified or exempted under applicable state securities laws as
soon as is reasonably practicable. Acquiror shall use its reasonable best
efforts to amend or supplement the Warrant Shares Registration Statement or the
prospectus contained therein and to take such actions as may be necessary to
cause the Warrant Shares Registration Statement to remain effective until the
earlier of (i) the seventh anniversary of the Closing and (ii) the expiration
or exercise of all outstanding Warrants. Prior to the Effective Time, Acquiror
will exercise its reasonable best efforts to cause the Warrants to be included
for trading in the National Association of Securities Dealers quotation system.
6.5 NOTIFICATION. Each of the Company and Acquiror shall, after
obtaining knowledge of the occurrence, non-occurrence or threatened occurrence
or non-occurrence of any fact or event that would cause or constitute a
material breach or failure of any of the representations and warranties,
covenants or conditions set forth herein, or that would constitute or result in
a Material Adverse Effect to such party, notify the other parties in writing
thereof with reasonable promptness.
6.6 EMPLOYEE BENEFITS. (a) For a period of at least two years
after the Effective Time, Acquiror shall cause the Surviving Corporation and
each Material Company Subsidiary to maintain compensation and benefit
arrangements, plans and programs for the benefit of current, former and retired
salaried employees of the Company and such subsidiaries and their respective
predecessors that are, in the aggregate, considering all compensation and
benefits, not less favorable than those provided by Acquiror or any of its
Affiliates to their similarly situated current, former and retired salaried
employees; provided, however, that nothing in this Agreement shall preclude or
restrict the Surviving Corporation from terminating the employment of any
employee.
(b) If any salaried employee of the Company or any
Material Company Subsidiary becomes a participant in any employee benefit plan,
practice or policy of Acquiror, any of its Affiliates or the Surviving
Corporation, Acquiror shall cause such employee to be given credit under such
plan, practice or policy for all service prior to the Effective Time with the
Company and its subsidiaries, or any predecessor employer, for all purposes
(including eligibility, vesting and determination of benefits) for which such
service is either taken into account or recognized.
(c) Following the Effective Time, Acquiror shall, or
shall cause the Surviving Corporation to, honor the terms of all consulting,
employment, severance and similar agreements set forth in Section 4.11 of the
Company Disclosure Memorandum that were in effect immediately prior to the date
hereof. Within sixty days after the date hereof, the Company shall offer to
enter into Employment Continuation Agreements which will be binding upon the
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Surviving Corporation with each of the persons and at the compensation listed
on Exhibit 6.6(c) substantially in the forms attached hereto as Exhibit
6.6(c)(i) and Exhibit 6.6.(c)(ii).
6.7 INVESTIGATION AND CONFIDENTIALITY. Prior to the Effective
Time, Acquiror and the Company each shall keep the other advised of all
material developments relevant to the transactions contemplated hereby and may
make or cause to be made such investigation, if any, of the business and
properties of the other party and its subsidiaries and of their respective
financial and legal condition as Acquiror or the Company reasonably deems
necessary or advisable to familiarize itself and its advisors with such
business, properties and other matters; PROVIDED, HOWEVER, that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. Acquiror
and, except as otherwise may be required by a Director Duty, the Company each
agree to furnish the other party and the other party's advisors with such
financial and operating data and other information with respect to its
businesses, properties and employees as Acquiror or the Company shall from time
to time reasonably request. All information furnished to the Company or
Acquiror by the other party hereunder (including, without limitation, all
environmental information obtained pursuant to Section 6.13 or otherwise) shall
be maintained by such party pursuant to the terms of the confidentiality
agreement (the "Confidentiality Agreement") between the Company and Acquiror
dated February 1, 1996, which shall survive the execution of this Agreement and
remain in full force and effect until the Effective Time.
6.8 FILINGS; OTHER ACTION. Subject to the terms and conditions
herein provided, the parties shall (a) within seven business days hereof make
their respective filings and thereafter make any other required submissions
under the HSR Act and the Communications Law; (b) use their reasonable best
efforts to cooperate with each other in (i) determining which filings are
required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, Governmental Authorities in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and (ii) timely making all such filings and timely seeking
all such consents, approvals, permits or authorizations; and (c) use their
reasonable best efforts to take, or cause to be taken, all other action and do,
or cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this Agreement
and satisfy the conditions to the transactions contemplated hereby; PROVIDED,
HOWEVER, that nothing in this Section 6.8 shall require the Acquiror or Sub, or
require the Acquiror or Sub to cause the Surviving Corporation, to divest or
hold separate any Station or Stations, or asset or groups of assets, or enter
into new
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arrangements or terminate any existing arrangement, or take any other specific
action requested by any Governmental Authorities. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement, subject to the remaining provisions hereof, the
officers and directors of the parties shall promptly take all such necessary
action.
6.9 INDEMNIFICATION AND INSURANCE.
(a) For not less than six years following the
Effective Time, Acquiror shall indemnify and hold harmless each present and
former employee, agent, director or officer of the Company and its Subsidiaries
("Indemnified Parties") from and against any and all claims arising out of or
in connection with activities in such capacity, or on behalf of, or at the
request of, the Company, its Subsidiaries or their Affiliates, and shall
advance expenses incurred with respect to the foregoing, as they are incurred,
to the fullest extent permitted under applicable law; PROVIDED, HOWEVER, that
if any claim or claims are asserted or made within such six-year period, all
rights to indemnification in respect of such claims shall continue until the
final disposition of any and all such claims.
(b) Acquiror shall cause the Surviving Corporation to
keep in effect provisions in the Company's Restated Articles of Incorporation
and By-laws providing for exculpation of director and officer liability and its
indemnification of or advancement of expenses to the Indemnified Parties to the
fullest extent permitted under the FBCA, which provisions shall not be amended
except as required by applicable law or except to make changes permitted by law
that would enhance the Indemnified Parties' right of indemnification or
advancement of expenses.
(c) If, after the Effective Time, Acquiror or any of
its successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers all or substantially all of its
property and assets to any Person, then, in each such case, proper provision
shall be made so that the successors and assigns of Acquiror assume all of the
obligations set forth in this Section 6.9. The provisions of this Section 6.9
are intended to be for the benefit of, and shall be enforceable by each Person
who is now, or has been at any time prior to the date of this Agreement, or who
becomes prior to the Effective Time, an officer, director, employee or agent of
the Company or any of its Subsidiaries (and their heirs and representatives).
6.10 PUBLICITY. Acquiror and the Company shall each issue press
releases relating to this Agreement. Each such release will be reviewed by the
other party and all such initial press releases
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shall be mutually satisfactory to the parties. Thereafter the Company and
Acquiror shall, subject to their respective legal obligations (including
requirements of national securities exchanges and other similar regulatory
bodies), consult with each other regarding the text of any press release before
issuing any such press release with respect to the transactions contemplated
hereby and in making any filings with any Governmental Authority or with any
national securities exchange with respect thereto.
6.11 TRANSFER TAXES. Acquiror shall pay any and all transfer
taxes (including, without limitation, any real estate transfer taxes) incurred
in connection with the Merger, whether such taxes are imposed on Acquiror, the
Company, their respective Subsidiaries or their shareholders.
6.12 LETTER OF CREDIT. Simultaneously with the execution and
delivery of the consents of the Consenting Stockholders in accordance with
Section 6.3, the parties shall enter into the Letter of Credit Escrow Agreement
substantially in the form attached hereto as Exhibit 6.13 (the "Letter of
Credit Escrow Agreement"). Pursuant to the Letter of Credit Escrow Agreement,
the Acquiror will deliver or cause to be delivered to the Escrow Agent (as
defined in the Letter of Credit Escrow Agreement) an irrevocable letter of
credit in the amount of $75,000,000 to be issued by an issuer reasonably
acceptable to the Company (the "Letter of Credit"). The Letter of Credit shall
be held and drawn on only as provided in Section 8.2(b) and in the Letter of
Credit Escrow Agreement.
6.13 ENVIRONMENTAL INSPECTION. Within 100 days of the date of
this Agreement, Acquiror and Sub shall have the right, at their own expense, to
cause the inspection of the properties of the Company and its subsidiaries to
verify the accuracy of the Company's representations and warranties in Section
4.16. Any invasive testing or sampling, including, without limitation, testing
of soil, ground or surface water, at any of such properties shall be conducted
only following reasonable advance written notice to the Company and without any
unreasonable interference with the conduct of the Company's business.
6.14 ACKNOWLEDGEMENT OF CONSENTS. The Company shall promptly
forward to Acquiror a copy of all consents received from the Consenting
Stockholders and shall promptly acknowledge in writing to Acquiror that
consents have been received from the holders of a majority of the outstanding
voting stock of the Company and that accordingly the Agreement and Plan of
Merger has been duly approved pursuant to Florida law.
6.15 RULE 145 AFFILIATES. At least 40 days prior to the Closing,
the Company shall deliver to Acquiror a letter identifying all persons who are,
at the time the Consenting Stockholders approve this Agreement and the Merger,
deemed to be "affiliates" of
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the Company for purposes of Rule 145 under the Securities Act (the "Rule 145
Affiliates"). The Company shall use its reasonable best efforts to cause each
Rule 145 Affiliate to deliver to Acquiror at least 30 days prior to the Closing
an agreement substantially in the form of Exhibit 6.15 to this Agreement.
6.16 ACTIONS WITH RESPECT TO THE WARRANTS. If, after the date
hereof and prior to issuance of the Warrants, Acquiror shall take any action
which, if the Warrants had been issued and outstanding as of the date of any
such action, would have required an adjustment in the exercise price of the
Warrants or in the number of shares purchasable upon exercise of the Warrants,
then the exercise price of the Warrants or such number of shares shall be
adjusted upon issuance of the Warrants to give effect to the adjustment which
would have been required as a result of such action.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 CONDITIONS TO OBLIGATIONS OF THE PARTIES. The respective
obligations of the Company, Acquiror and Sub to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) This Agreement and the transactions contemplated
hereby shall have been approved in the manner required by applicable law by the
holders of a majority of the Company Common Stock as required by the
Stockholders Agreement and by the holders of Acquiror Common Stock as required
by the By-Laws of the National Association of Securities Dealers.
(b) The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any
order or injunction of a court or Governmental Authority of competent
jurisdiction that prohibits the consummation of the transactions contemplated
by this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable best efforts to have any such
order overturned or injunction lifted.
(d) All orders, approvals, and consents of the FCC
required in connection with the consummation of the transactions contemplated
hereby shall have been obtained or granted, whether or not any appeal or
request for reconsideration of such order is pending, or whether the time for
filing any such appeal or request
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for reconsideration or for any sua sponte action by the FCC has expired.
(e) All consents, authorizations, orders and approvals
of (or filings or registrations with) any Governmental Authority (other than
the FCC) required in connection with the execution, delivery and performance of
this Agreement shall have been obtained or made, except for filings in
connection with the Merger and any other documents required to be filed after
the Effective Time and except where the failure to have obtained or made any
such consent, authorization, order, approval, filing or registration would not
have a Material Adverse Effect on the Surviving Corporation following the
Effective Time.
(f) The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and remain in effect.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations
of the Company to effect the Merger shall be subject to the satisfaction or
waiver at or prior to the Closing of each of the following additional
conditions:
(a) The representations and warranties of Acquiror and
Sub set forth in this Agreement shall be true and correct in all respects as of
the date of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of the
Effective Time (except for any such representations and warranties made as of
specified date, which shall be true and correct in all respects as of such
date), except to the extent that the aggregate effect of the inaccuracies in
such representations and warranties as of the applicable times (each considered
without any exclusions for lack of Material Adverse Effect set forth in the
individual representation or warranty) does not constitute a Material Adverse
Effect on Acquiror when compared to the state of facts which would exist if all
such representations and warranties were true in all respects as of the
applicable times.
(b) Each of the agreements and covenants of Acquiror
and Sub to be performed and complied with by Acquiror and Sub pursuant to this
Agreement prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(c) Acquiror shall have delivered to the Company a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, as to the satisfaction by it
of the conditions set forth in subsections 7.2(a) and 7.2(b).
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7.3 CONDITIONS TO OBLIGATIONS OF ACQUIROR AND SUB. The
obligations of Acquiror and Sub to effect the Merger shall be subject to the
satisfaction or waiver at or prior to the Closing of the following conditions:
(a) The representations and warranties of the Company
set forth in this Agreement shall be true and correct in all respects as of the
date of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of the
Effective Time (except for (i) any such representations and warranties made as
of specified date, which shall be true and correct in all respects as of such
date) and (ii) the representations and warranties in Section 4.16, the accuracy
of which shall be tested pursuant to Section 8.1(i) and therefore shall not be
a condition to the obligations of Acquiror and Sub to effect the Merger),
except to the extent that the aggregate effect of the inaccuracies in such
representations and warranties as of the applicable times (each considered
without any exclusions for lack of Material Adverse Effect set forth in the
individual representation or warranty) does not constitute a Material Adverse
Effect on the Company when compared to the state of facts which would exist if
all such representations and warranties were true in all respects as of the
applicable times.
(b) Each of the agreements and covenants of the
Company to be performed and complied with by the Company pursuant to this
Agreement prior to the Effective Time shall have been duly performed and
complied with except to the extent that the aggregate effect of any
non-performance or noncompliance by the Company (each considered without any
exclusions for lack of Material Adverse Effect set forth in the individual
covenant or agreement) does not constitute a Material Adverse Effect on the
Company when compared to the state of facts which would exist if all such
agreements and covenants had been performed and complied with by the Company.
(c) From the date of this Agreement through June 30,
1996, the Cash Flow (as defined in Section 7.3 of the Company Disclosure
Memorandum) of the Company shall have been at least 90% of that projected in
the forecast set forth in Section 7.3 of the Company Disclosure Memorandum (the
"Forecast"), and from July 1, 1996 through September 30, 1996 (or through the
end of the month preceding the month in which the Closing occurs if the Closing
occurs after August 1, 1996, but earlier than September 30, 1996), the Cash
Flow of the Company shall have been at least 75% of that projected in the
Forecast.
(d) The Company shall have delivered to Acquiror a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, as to the satisfaction by it
of the conditions set forth in subsections 7.3(a), 7.3(b) and 7.3(c).
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ARTICLE 8
TERMINATION OF AGREEMENT
8.1 TERMINATION. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time prior to the Effective
Time:
(a) by mutual written consent of the Company and
Acquiror;
(b) by the Company or Acquiror, upon written notice to
the other party, if the Merger shall not have been consummated on or prior to
May 31, 1997 (the "Outside Date"), unless such failure of consummation shall be
due to the failure of the party seeking such termination to perform or observe
in all material respects the covenants and agreements hereof to be performed or
observed by such party;
(c) by the Company or Acquiror, upon written notice to
the other party, if a Governmental Authority of competent jurisdiction shall
have issued an injunction, order or decree enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement, and such
injunction, order or decree shall have become final and non-appealable or if a
Governmental Authority has otherwise made a final determination that any
required Regulatory Authorization would not be forthcoming; PROVIDED, HOWEVER,
that the party seeking to terminate this Agreement pursuant to this clause has
used all required efforts as specified in Section 6.8 to remove such
injunction, order or decree;
(d) by the Company or Acquiror, if any condition to
such party's obligations to consummate the transactions contemplated hereby is
incapable of being satisfied on or prior to the Outside Date; PROVIDED,
HOWEVER, that (i) the terminating party has not breached the terms of this
Agreement; (ii) if the Company is the terminating party, the Consenting
Stockholders have not breached the terms of the Stockholders Agreement; and
(iii) if Acquiror is the terminating party, Xxxx/Chilmark Fund L.P. has not
breached the terms of the Jacor Shareholders Agreement, in each case in any
manner that proximately contributes to the failure to consummate the Merger by
the Outside Date;
(e) by the Company or Acquiror, if the FCC shall have
issued an order or ruling or taken other action denying approval of the
transactions contemplated by this Agreement, and such order, ruling or other
action shall have become final and non-appealable; PROVIDED, HOWEVER, that the
party seeking to terminate this Agreement pursuant to this clause has used all
required efforts as specified in Section 6.8 to obtain such FCC approval;
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(f) by the Company, if prior to the delivery of the
consents of the Consenting Stockholders delivered pursuant to the Stockholder
Agreement, the Board of Directors of the Company determines in accordance with
a Director Duty that such termination is required by reason of a Competing
Transaction being proposed;
(g) by the Company or Acquiror, if prior to the
delivery of the consents of the Consenting Stockholders delivered pursuant to
the Stockholders Agreement, the Board of Directors of the Company shall have
withdrawn or modified in a manner materially adverse to Acquiror its approval
of the adoption of this Agreement or the approval of the Merger, because the
Board of Directors has determined to recommend to the Company's shareholders or
approve a Competing Transaction, in accordance with a Director Duty;
(h) by Acquiror, if any Consenting Stockholder shall
have breached any material representation or warranty, or failed to perform any
covenant or duty contained in, the Stockholders Agreement, other than a breach
or noncompliance that would not materially affect the benefits Acquiror is
receiving from the Stockholders Agreement;
(i) by Acquiror, within 100 days of the date of this
Agreement, if Acquiror reasonably believes, on the basis of the inspection
conducted pursuant to Section 6.13, that the Company's representations and
warranties in Section 4.16 are not true and correct both as of the date of this
Agreement and at all times within 100 days after the date of this Agreement;
(j) by Acquiror, within 20 days of the date of this
Agreement, if (i) the termination, if any, of any of the Undisclosed Contracts
because of the consummation of the Merger would constitute a Material Adverse
Effect on the Company or (ii) any or all of the Undisclosed Contracts
constitute a Material Adverse Effect on the Company when compared to the state
of facts which would exist if the Company were not a party to any or all of the
Undisclosed Contracts; or
(k) by the Company if (i) Xxxx/Chilmark Fund L.P.
shall have breached any material representation or warranty, or failed to
perform any covenant or duty contained in, the Jacor Shareholders Agreement,
other than a breach or noncompliance that would not materially affect the
benefits the Company is receiving from the Jacor Shareholders Agreement, or
(ii) in the event that all required authorizations of the shareholders of
Acquiror to effect the transactions contemplated by this Agreement shall not be
obtained.
8.2 EFFECT OF TERMINATION. (a) In the event that (i) this
Agreement is terminated pursuant to clause 8.1(f), clause 8.1(g), or clause
8.1(h) and (ii) at the time of termination, there has been no misrepresentation
by or breach of any obligation of
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Acquiror or Sub under this Agreement other than a breach of or noncompliance
with any obligation which would not constitute a Material Adverse Effect on
Acquiror, then the Company shall pay the Acquiror a fee of $20,000,000, which
amount shall be payable by wire transfer of same day funds within two business
days after the date this Agreement is terminated. Such amount shall be in
addition to the amounts payable by certain of the Consenting Stockholders to
the Acquiror pursuant to the Stockholders Agreement.
(b) If after the execution of the Letter of Credit
Escrow Agreement and the issuance of the Letter of Credit this Agreement is
terminated: (i) pursuant to Section 8.1(b), except if there has been a failure
to satisfy any of the conditions specified in Section 7.3; (ii) pursuant to
Section 8.1(c); (iii) by the Company, pursuant to Section 8.1(d); (iv) pursuant
to Section 8.1(e); or (v) pursuant to Section 8.1(k), then the Company shall be
permitted to draw on the Letter of Credit. The Company shall not be permitted
to draw on the Letter of Credit under any other circumstances. The obligations
of the parties to this Agreement under the last sentence of Section 6.7 and
under Sections 8.2 and 9.1 shall survive any termination of this Agreement.
(c) From and after the execution of the Letter of
Credit Escrow Agreement and the issuance of the Letter of Credit and except as
set forth in Section 8.2(d), the right to terminate this Agreement and receive
$75 million pursuant to a draw on the Letter of Credit under the circumstances
permitted in Sections 8.1 and 8.2(b) shall be the Company's exclusive remedy
and $75 million shall be the maximum measure of damages for any claim the
Company might have against Acquiror or its Affiliates in connection with the
transactions contemplated by this Agreement, including without limitation, any
claim for breach or nonperformance of this Agreement or any tort claim.
(d) If (i) the Merger has not been consummated, (ii)
this Agreement has not been terminated by the Company, (iii) the Letter of
Credit Escrow Agreement has been executed and the Letter of Credit has been
issued, and (iv) the Company believes that Acquiror has wilfully breached this
Agreement, the Company may choose to irrevocably waive the right to draw on the
Letter of Credit and instead bring an action against Acquiror or its Affiliates
for such alleged wilful breach of this Agreement (a "Letter of Credit Waiver").
A Letter of Credit Waiver must be made in writing and delivered by the Company
to Acquiror and the Escrow Agent (as defined in the Letter of Credit Escrow
Agreement). If the Company makes a Letter of Credit Waiver, the Company and
the Acquiror will take all necessary steps to cancel the Letter of Credit.
(e) Prior to the execution of the Letter of Credit
Escrow Agreement and the issuance of the Letter of Credit, the
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Company's sole remedies in connection with the transactions contemplated in
this Agreement shall be to terminate this Agreement (if permitted under Section
8.1) and/or bring an action against Acquiror or its Affiliates for wilful
breach of this Agreement if the Company believes that Acquiror has wilfully
breached this Agreement; PROVIDED, HOWEVER, that the bringing of such an action
shall not affect Acquiror's right to immediately receive any fee it is entitled
to under Section 8.2(a) and that if such a lawsuit is brought or the Company
exercises such a right of termination, the Letter of Credit Escrow Agreement
shall not be executed and the Letter of Credit shall not be issued.
ARTICLE 9
MISCELLANEOUS AND GENERAL
9.1 EXPENSES. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses except as expressly provided herein and except that (a) the filing fee
in connection with the HSR Act filing, (b) the filing fee in connection with
the filing of the Information Statement with the SEC, (c) the filing fees in
connection with necessary applications to the FCC, and (d) the expenses
incurred in connection with printing and mailing the Information Statement
shall be shared equally by the Company and Acquiror.
9.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, but shall not be assignable by any party hereto without
the prior written consent of the other parties hereto, provided however that
Acquiror may assign its rights under this Agreement to an Affiliate at any time
and to a non-Affiliate if the Acquiror, in its sole discretion, determines that
it is appropriate to do so because of difficulties encountered in satisfying
the conditions in Article 7 of this Agreement. Any such assignment shall not
affect Acquiror's liability hereunder.
9.3 THIRD PARTY BENEFICIARIES. Except as set forth in Article
3 and Sections 6.4(b), 6.6 and 6.9 (all of which shall inure to the benefit of
the persons or entities benefitting from the provisions thereof, which persons
are intended to be third party beneficiaries thereof), each party hereto
intends that this Agreement shall not benefit or create any right or cause of
action in or on behalf of any Person other than the parties hereto.
9.4 NOTICES. Any notice or other communication provided for
herein or given hereunder to a party hereto shall be sufficient if in writing,
and sent by facsimile transmission (electronically confirmed), delivered in
Person, mailed by first class registered
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or certified mail, postage prepaid, or sent by Federal Express or other
overnight courier of national reputation, addressed as follows:
If to Acquiror or Sub:
Xxxxx Xxxxxxxx
Jacor Communications, Inc.
1300 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxx, Head & Xxxxxxx
1900 Fifth Third Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
and
---
Xxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to the Company:
Citicasters Inc.
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address with respect to a party as such party shall notify the
other parties in writing as above provided.
9.5 COMPLETE AGREEMENT. This Agreement, the Company Disclosure
Memorandum, the Acquiror Disclosure Memorandum and the other documents and
agreements delivered by the parties in
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connection herewith, together with the Confidentiality Agreement, contain the
complete agreement among the parties hereto with respect to the Merger and the
other transactions contemplated hereby and thereby and supersede all prior
agreements and understandings among the parties hereto with respect thereto.
9.6 CAPTIONS; REFERENCES. The captions contained in this
Agreement are for convenience of reference only and do not form a part of this
Agreement. When a reference is made in this Agreement to a clause, a Section,
a subsection or an Article, such reference shall be to such clause, Section,
subsection or Article of this Agreement unless otherwise indicated.
9.7 AMENDMENT. At any time, the parties hereto, by action taken
by their respective Board of Directors or pursuant to authority delegated by
their respective Boards of Directors, may amend this Agreement; PROVIDED,
HOWEVER, that no amendment after approval by the shareholders of the Company
shall be made that changes in a manner adverse to such shareholders the Merger
Consideration without the further approval of such shareholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
9.8 WAIVER. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements
or conditions contained herein, to the extent permitted by applicable law. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a writing signed on behalf of such party.
9.9 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida,
without regard to its rules of conflict of laws.
9.10 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Except as set forth in this Section 9.10, no representation, warranty or
covenant contained in this Agreement shall survive the Merger or, except as set
forth in Section 8.2, the earlier termination of this Agreement. The
obligations set forth in Article 3 and Sections 6.4(b), 6.6, 6.9 and 6.11 shall
survive the Merger.
9.11 SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of
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this Agreement in any other jurisdiction. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
9.12 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which they are entitled at law or in equity.
9.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above written.
CITICASTERS INC.
By:________________________
Its:_______________________
JACOR COMMUNICATIONS, INC.
By:________________________
Its:_______________________
JCAC, INC.
By:________________________
Its:_______________________
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INDEX OF DEFINED TERMS
Page
Acquiror . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquiror Common Stock . . . . . . . . . . . . . . . . . . 20
Acquiror Disclosure Memorandum . . . . . . . . . . . . . 19
Acquiror Financial Statements . . . . . . . . . . . . . . 22
Acquiror Reports . . . . . . . . . . . . . . . . . . . . 21
Acquiror's Knowledge . . . . . . . . . . . . . . . . . . 21
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . 23
Agreement . . . . . . . . . . . . . . . . . . . . . . . . 1
Articles of Merger . . . . . . . . . . . . . . . . . . . 2
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 14
Cash Consideration . . . . . . . . . . . . . . . . . . . 3
Certificates . . . . . . . . . . . . . . . . . . . . . . 3
Class B Shares . . . . . . . . . . . . . . . . . . . . . 7
Closing . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Date . . . . . . . . . . . . . . . . . . . . . . 2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Communications Law . . . . . . . . . . . . . . . . . . . 10
Company . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Capital Stock . . . . . . . . . . . . . . . . . . 7
Company Common Stock . . . . . . . . . . . . . . . . . . 3
Company Contracts . . . . . . . . . . . . . . . . . . . . 15
Company Disclosure Memorandum . . . . . . . . . . . . . . 6
Company Financial Advisor . . . . . . . . . . . . . . . . 18
Company Financial Statements . . . . . . . . . . . . . . 11
Company Preferred Shares . . . . . . . . . . . . . . . . 7
Company Properties . . . . . . . . . . . . . . . . . . . 18
Company Reports . . . . . . . . . . . . . . . . . . . . . 10
Company's Knowledge . . . . . . . . . . . . . . . . . . . 12
Competing Transaction . . . . . . . . . . . . . . . . . . 25
Confidentiality Agreement . . . . . . . . . . . . . . . . 31
Consenting Stockholders . . . . . . . . . . . . . . . . . 1
Director Duty . . . . . . . . . . . . . . . . . . . . . . 25
Effective Time . . . . . . . . . . . . . . . . . . . . . 2
Employee pension benefit plan . . . . . . . . . . . . . . 13
Employee welfare benefit plan . . . . . . . . . . . . . . 14
Equity Rights . . . . . . . . . . . . . . . . . . . . . . 8
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exchange Act . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Agent . . . . . . . . . . . . . . . . . . . . . 5
FBCA . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Governmental Authority . . . . . . . . . . . . . . . . . 9
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indemnified Parties . . . . . . . . . . . . . . . . . . . 32
Information Statement . . . . . . . . . . . . . . . . . . 29
Letter of Credit . . . . . . . . . . . . . . . . . . . . 33
Letter of Credit Escrow Agreement . . . . . . . . . . . . 33
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 12
48
Material Adverse Effect . . . . . . . . . . . . . . . . . 6
Material Company Subsidiaries . . . . . . . . . . . . . . 8
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 1
Merger Consideration . . . . . . . . . . . . . . . . . . 3
Multiemployer plan . . . . . . . . . . . . . . . . . . . 13
Multiemployer plans . . . . . . . . . . . . . . . . . . . 15
Option . . . . . . . . . . . . . . . . . . . . . . . . . 4
Outside Date . . . . . . . . . . . . . . . . . . . . . . 37
Person . . . . . . . . . . . . . . . . . . . . . . . . . 25
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Registration Statement . . . . . . . . . . . . . . . . . 29
Retirement Plans . . . . . . . . . . . . . . . . . . . . 14
Rule 145 Affiliates . . . . . . . . . . . . . . . . . . . 34
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Securities Act . . . . . . . . . . . . . . . . . . . . . 10
SFB Plans . . . . . . . . . . . . . . . . . . . . . . . . 14
Station Licenses . . . . . . . . . . . . . . . . . . . . 13
Stations . . . . . . . . . . . . . . . . . . . . . . . . 13
Stock Option Plans . . . . . . . . . . . . . . . . . . . 4
Stockholders Agreement . . . . . . . . . . . . . . . . . 1
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 9
Surviving Corporation . . . . . . . . . . . . . . . . . . 1
Undisclosed Contracts . . . . . . . . . . . . . . . . . . 16
Warrant . . . . . . . . . . . . . . . . . . . . . . . . . 3
Warrant Consideration . . . . . . . . . . . . . . . . . . 3
Warrant Shares . . . . . . . . . . . . . . . . . . . . . 29
Warrant Shares Registration Statement . . . . . . . . . . 29
ii
