<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
AND
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
HEFTEL BROADCASTING CORPORATION
(Name of Subject Company)
CLEAR CHANNEL RADIO, INC.
CLEAR CHANNEL COMMUNICATIONS, INC.
(Bidders)
CLASS A COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)
422799106
(CUSIP Number of Class of Securities)
-----------------------
L. LOWRY MAYS
CLEAR CHANNEL COMMUNICATIONS, INC.
200 CONCORD PLAZA, SUITE 600
SAN ANTONIO, TEXAS 78216
(210) 822-2828
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Bidders)
Copies to:
STEPHEN C. MOUNT
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
300 CONVENT STREET, SUITE 1500
SAN ANTONIO, TEXAS 78205
(210) 270-0800
-----------------------
JUNE 7, 1996
(Date of Event Which Requires Filing Amendent to Statement of Schedule 13D)
CALCULATION OF FILING FEE
================================================================================
Transaction valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
$109,747,950 $21,949.59
================================================================================
* For purposes of calculating fee only. This amount assumes the purchase of
4,771,650 shares of Class A Common Stock of Heftel Broadcasting
Corporation, at $23.00 in cash per share. The amount of the filing fee,
<PAGE> 2
calculated in accordance with Regulation 240.0-11 of the Securities
Exchange Act of 1934, as amended, equals 1/50 of one percentum of the value
of the shares to be purchased.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: None
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
<PAGE> 3
CUSIP No. 422799-10-6 14D-1 and 13D
- -------------------------------------------------------------------------------
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CLEAR CHANNEL COMMUNICATIONS, INC.
74-1787539
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(See Instructions):
(a) X
--------
(b)
--------
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Sources of Funds (See Instructions)
BK
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f): [ ]
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Texas
- -------------------------------------------------------------------------------
(7) Aggregate Amount Beneficially Owned by EACH REPORTING PERSON.
6,829,345
- -------------------------------------------------------------------------------
(8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares
(See Instructions) [ ]
- -------------------------------------------------------------------------------
(9) Percent of Class Represented by Amount in Row (7)
63.0%
- -------------------------------------------------------------------------------
(10) Type of Reporting Person (See Instructions)
CO
- -------------------------------------------------------------------------------
3
<PAGE> 4
CUSIP No. 422799-10-6 14D-1 and 13D
- -------------------------------------------------------------------------------
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CLEAR CHANNEL RADIO, INC.
74-2722883
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(See Instructions):
(a) X
--------
(b)
--------
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Sources of Funds (See Instructions)
AF
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f): [ ]
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Nevada
- -------------------------------------------------------------------------------
(7) Aggregate Amount Beneficially Owned by EACH REPORTING PERSON.
4,672,546
- -------------------------------------------------------------------------------
(8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares
(See Instructions) [ ]
- -------------------------------------------------------------------------------
(9) Percent of Class Represented by Amount in Row (7)
43.1%
- -------------------------------------------------------------------------------
(10) Type of Reporting Person (See Instructions)
CO
- -------------------------------------------------------------------------------
4
<PAGE> 5
Introduction
This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Clear Channel Radio, Inc., a Nevada corporation (the "Purchaser"), to purchase
any and all outstanding shares of Class A Common Stock, par value $.001 per
share (the "Shares"), of Heftel Broadcasting Corporation, a Delaware
corporation, at a price of $23.00 per Share net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
June 7, 1996 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"), copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively and which are
incorporated herein by reference. Purchaser is an indirect wholly-owned
subsidiary of Clear Channel Communications, Inc., a Texas corporation
("Parent").
Item 1. Security and Subject Company.
(a) The name of the subject company is Heftel Broadcasting
Corporation, a Delaware corporation (the "Company"), which has its principal
executive offices at 6767 West Tropicana Avenue, Las Vegas, Nevada 89103.
(b) This Statement relates to the offer by Purchaser to purchase
all outstanding Shares at a price of $23.00 per Share net to the Seller in
cash. The information set forth in the INTRODUCTION and Section 1 ("Terms of
the Offer") of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the
Shares; Dividends on the Shares") of the Offer to Purchase is incorporated
herein by reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Statement on Schedule 14D-1 is being filed
by the Purchaser, a Nevada corporation and Parent, a Texas corporation. All of
the persons listed in Schedule I of the Offer to Purchase are United States
Citizens. The Purchaser is an indirect wholly-owned subsidiary of the Parent.
The information set forth in the INTRODUCTION, Section 9 ("Certain Information
Concerning the Purchaser and Parent") and Schedule I of the Offer to Purchase
is incorporated herein by reference.
5
<PAGE> 6
(e) During the last five years, neither of Parent or Purchaser,
and, to the best of their knowledge, none of the persons listed in Schedule I
of the Offer to Purchase has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(f) During the last five years, neither of Parent or Purchaser,
and, to the best of their knowledge, none of the persons listed in Schedule I
of the Offer to Purchase was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violations of such laws.
Item 3. Past Contracts, Transactions or Negotiations with the Subject
Company.
(a) and (b) The information set forth in Section 9 ("Certain
Information Concerning the Purchaser and Parent") and Section 11 ("Contacts
with the Company; Background of the Offer") of the Offer to Purchase is herein
incorporated by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a) and (b) The information set forth in Section 10 ("Source and
Amount of Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in Section 12 ("Purpose of the
Offer; The Tender Offer Agreement, Stock Purchase Agreement, Settlement
Agreements and Agreements Not to Compete") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Effect of
the Offer on the Market for the Class A Common Stock, Stock Quotation and
Exchange Act Registration") of the Offer to Purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company.
(a)-(b) The information set forth in the INTRODUCTION, Section 9
("Certain Information Concerning the Purchaser and Parent") and Section 12
("Purpose of the Offer, The Tender Offer Agreement,
6
<PAGE> 7
Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete")
of the Offer to Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
The information set forth in the INTRODUCTION, Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 11 ("Contacts with
the Company; Background of the Offer") and Section 12 ("Purpose of the Offer;
The Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and
Agreements Not to Compete") of the Offer to Purchase is incorporated herein by
reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in the INTRODUCTION and Section 16
("Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
Item 10. Additional Information.
(a) The information set forth in Section 11 ("Contacts with the
Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The
Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and
Agreements Not to Compete") of the Offer to Purchase is incorporated herein by
reference.
(b) and (c) The information set forth in Section 15 ("Certain
Regulatory and Legal Matters") of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in Section 7 ("Effect of the
Offer on the Market for the Class A Common Stock, Stock Quotation and Exchange
Act Registration") of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase, a copy of
which is attached as Exhibit (a)(1) hereto, the Letter of Transmittal, a copy
of which is attached as Exhibit (a)(2) hereto, the
7
<PAGE> 8
Tender Offer Agreement between the Purchaser and the Company, a copy of which
is attached as Exhibit (c)(1) hereto, the Stockholder Purchase Agreement, a
copy of which is attached as Exhibit (c)(2) hereto, the Settlement Agreements,
copies of which are attached as Exhibits (c)(5) and (c)(6) hereto and the
Agreements Not to Compete, copies of which are attached as Exhibits (c)(3) and
(c)(4) hereto, is incorporated in its entirety herein by reference.
Item 11. Material to be Filed as Exhibits.
99(a)(1) . . . . . Offer to Purchase dated June 7, 1996.
99(a)(2) . . . . . Letter of Transmittal.
99(a)(3) . . . . . Notice of Guaranteed Delivery.
99(a)(4) . . . . . Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
99(a)(5) . . . . . Letter to Clients from Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
99(a)(6) . . . . . Text of Press Release dated June 2, 1996.
99(a)(7) . . . . . Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
99(a)(8) . . . . . Summary Advertisement dated June 7, 1996.
99(b) . . . . . . Amended and Restated Credit Agreement dated
as of October 19, 1995, among Parent, the
Lenders from time to time party thereto, and
NationsBank of Texas, N.A.
99(c)(1) . . . . . Tender Offer Agreement dated as of June 1,
1996 between the Purchaser and the Company.
99(c)(2) . . . . . Stockholder Purchase Agreement dated as of
June 1, 1996 by and among the Purchaser and
the stockholders of the Company listed on
Exhibit A thereto.
99(c)(3) . . . . . Agreement Not to Compete dated as of June 1,
1996 by and between Cecil Heftel and the
Company.
99(c)(4) . . . . . Agreement Not to Compete dated as of June 1,
1996 by and between the Company and Carl
Parmer.
99(c)(5) . . . . . Settlement Agreement dated as of June 1, 1996
by and between the Company and Cecil Heftel.
99(c)(6) . . . . . Settlement Agreement dated as of June 1, 1996
by and between the Company and Carl Parmer.
99(c)(7) . . . . . Letter Agreement dated May 23, 1995 among the
Company, Parent and Cecil Heftel.
99(c)(8) . . . . . Voting Rights Agreement dated May 23, 1995 of
Cecil Heftel.
99(c)(9) . . . . . Amendment No. 1 to Tender Offer Agreement
dated June 6, 1996.
99(c)(10) . . . . Letter Agreements of certain Selling
Stockholders dated June 6, 1996
99(c)(11). . . . . Agreement to File Joint Statement on Schedule
13D
99(c)(12). . . . . Confidentiality Letter Agreement dated May 31,
1996 between the Purchaser and the Company
99(d)-(f) . . . . Not applicable.
8
<PAGE> 9
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: June 7, 1996
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ MARK P. MAYS
----------------------------------------
Name: Mark P. Mays
-------------------------------------
Title: Senior Vice President/Operations
-------------------------------------
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------------------
Name: Mark P. Mays
--------------------------------------
Title: Senior Vice President/Operations
-------------------------------------
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Seq.
----------- Page No.
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<S> <C>
99(a)(1) Offer to Purchase dated June 7, 1996.
99(a)(2) Letter of Transmittal.
99(a)(3) Notice of Guaranteed Delivery.
99(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99(a)(5) Letter to Clients from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
99(a)(6) Text of Press Release dated June 2, 1996.
99(a)(7) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99(a)(8) Summary Advertisement dated June 7, 1996.
99(b) Amended and Restated Credit Agreement dated as of October 19, 1995,
among Parent, the Lenders from time to time party thereto and
NationsBank of Texas, N.A.
99(c)(1) Tender Offer Agreement dated as of June 1, 1996 between the
Purchaser and the Company.
99(c)(2) Stockholder Purchase Agreement dated as of June 1, 1996 by
and among the Purchaser and the stockholders of the Company
listed on Exhibit A thereto.
99(c)(3) Agreement Not to Compete dated as of June 1, 1996 by and
between Cecil Heftel and the Company.
99(c)(4) Agreement Not to Compete dated as of June 1, 1996 by and
between the Company and Carl Parmer.
99(c)(5) Settlement Agreement dated as of June 1, 1996 by and
between the Company and Cecil Heftel.
99(c)(6) Settlement Agreement dated as of June 1, 1996 by and
between the Company and Carl Parmer.
99(c)(7) Letter Agreement dated May 23, 1995 among the Company,
Parent and Cecil Heftel.
99(c)(8) Voting Rights Agreement dated May 23, 1995 of Cecil Heftel.
99(c)(9) Amendment No. 1 to Tender Offer Agreement dated June 6, 1996.
99(c)(10) Letter Agreements of certain selling stockholders dated
June 6, 1996.
99(c)(11) Agreement to File Joint Statement on Schedule 13D dated
June 6, 1996.
99(c)(12) Confidentiality Letter Agreement dated May 31, 1996 between
the Purchaser and the Company.
99(d)-(f) Not applicable.
</TABLE>
10
<PAGE> 1
Offer to Purchase for Cash
All Outstanding Shares of Class A and Class B Common Stock
of
HEFTEL BROADCASTING CORPORATION
at
$23.00 NET PER SHARE
by
CLEAR CHANNEL RADIO, INC.
an indirect wholly-owned subsidiary of
CLEAR CHANNEL COMMUNICATIONS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY,
JULY 16, 1996, UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
RECEIPT OF CERTAIN CONSENTS FROM THE FEDERAL COMMUNICATIONS COMMISSION
(THE "FCC CONSENT") AND THE EXPIRATION OR TERMINATION OF THE WAITING
PERIOD APPLICABLE TO THE PURCHASER'S ACQUISITION OF SHARES UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT"). SEE SECTION 14 OF THIS OFFER TO
PURCHASE.
------------------------
THE OFFER IS BEING MADE PURSUANT TO A TENDER OFFER AGREEMENT BETWEEN THE
PURCHASER AND HEFTEL BROADCASTING CORPORATION.
------------------------
IMPORTANT
Any stockholder desiring to tender Shares should either (i) complete and
sign the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and deliver the Letter of Transmittal
with the Shares and all other required documents to the Depositary or follow the
procedure for book-entry transfer set forth in Section 3 of this Offer to
Purchase or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder. A
stockholder having Shares registered in the name of a broker, commercial bank,
trust company or other nominee must contact such person if the stockholder
desires to tender those Shares. Any stockholder who desires to tender Shares and
cannot deliver such Shares and all other required documents to the Depositary by
the expiration of the Offer must tender such Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of this Offer to Purchase.
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase.
------------------------
The Dealer Manager for the Offer is:
CS First Boston
June 7, 1996.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION.......................................................................... 1
1. Terms of the Offer............................................................... 2
2. Acceptance for Payment and Payment for Shares.................................... 4
3. Procedure for Tendering Shares................................................... 5
4. Withdrawal Rights................................................................ 7
5. Certain Federal Income Tax Consequences.......................................... 8
6. Price Range of the Class A Stock; Dividends on the Shares........................ 9
7. Effect of the Offer on the Market for the Class A Common Stock, Stock Quotation
and Exchange Act Registration.................................................... 9
8. Certain Information Concerning the Company....................................... 10
9. Certain Information Concerning the Purchaser and Parent.......................... 11
10. Source and Amount of Funds....................................................... 13
11. Contacts with the Company; Background of the Offer............................... 14
12. Purpose of the Offer; The Tender Offer Agreement, Stock Purchase Agreement,
Settlement Agreements and Agreements Not to Compete........................... 15
13. Dividends and Distributions...................................................... 25
14. Certain Conditions of the Offer.................................................. 25
15. Certain Regulatory and Legal Matters............................................. 26
16. Fees and Expenses................................................................ 28
17. Miscellaneous.................................................................... 29
Schedule I Directors and Executive Officers of Parent and the Purchaser.
</TABLE>
<PAGE> 3
TO THE HOLDERS OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK OF
HEFTEL BROADCASTING CORPORATION
INTRODUCTION
Clear Channel Radio, Inc., a Nevada corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas
corporation ("Parent"), hereby offers to purchase all shares (the "Shares") of
Class A Common Stock, par value $.001 per share (the "Class A Common Stock"),
and Class B Common Stock, par value $.001 per share (the "Class B Common Stock"
and together with the Class A Common Stock, the "Common Stock"), of Heftel
Broadcasting Corporation, a Delaware corporation (the "Company"), at a purchase
price of $23.00 per Share, net to the seller in cash, without interest (the
"Offer Price"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, together with
any amendments or supplements hereto or thereto, collectively constitute the
"Offer").
Tendering holders of Shares will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Letter of Transmittal, transfer taxes
on the purchase of Shares by the Purchaser pursuant to the Offer. The Purchaser
will pay all charges and expenses of CS First Boston Corporation (the "Dealer
Manager"), The Bank of New York (the "Depositary") and Morrow & Co., Inc. (the
"Information Agent") in connection with the Offer. See Section 16.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
RECEIPT OF THE FCC CONSENT AND THE EXPIRATION OR TERMINATION OF THE WAITING
PERIOD APPLICABLE TO PURCHASER'S ACQUISITION OF SHARES UNDER THE HSR ACT. SEE
SECTION 14.
THE OFFER IS BEING MADE PURSUANT TO A TENDER OFFER AGREEMENT BETWEEN THE
PURCHASER AND THE COMPANY.
The Company has informed the Purchaser that, as of June 1, 1996, there were
(a) 6,336,610 shares of Class A Common Stock issued and outstanding and 591,839
shares of Class A Common Stock reserved for issuance upon exercise of
outstanding stock options, and (b) 3,769,176 shares of Class B Common Stock
issued and outstanding and 850,106 shares of Class B Common Stock reserved for
issuance upon exercise of outstanding warrants. The rights of the holders of
Class A Common Stock and Class B Common Stock are identical, except that each
share of Class B Common Stock generally entitles its holders to ten votes,
whereas each share of Class A Common Stock entitles its holder to one vote. Each
share of Class B Common Stock will convert automatically into one share of Class
A Common Stock upon its purchase by the Purchaser. Parent presently owns
2,156,799 shares of Class A Common Stock, representing approximately 21.3% of
the outstanding Shares (18.7% on a fully diluted basis).
The Offer is being made pursuant to a Tender Offer Agreement dated June 1,
1996 between the Purchaser and the Company, as amended (the "Tender Offer
Agreement"). Concurrently with the execution of the Tender Offer Agreement, the
Purchaser also entered into a Stockholder Purchase Agreement dated June 1, 1996
(the "Stockholder Purchase Agreement") with certain stockholders of the Company
(collectively, the "Selling Stockholders"), pursuant to which each of the
Selling Stockholders agreed to sell, and the Purchaser agreed to purchase, all
Shares owned by such Selling Stockholders at a price per Share equal to the
Offer Price. The Selling Stockholders collectively own 160,000 shares of Class A
Common Stock and 3,356,529 shares of Class B Common Stock, or a total of
3,516,529 shares of Common Stock, representing approximately 34.8% of the
outstanding Shares. The Selling Stockholders also own options to acquire 349,339
Shares of Class A Common Stock and warrants to acquire 806,678 Shares of Class B
Common Stock, and have agreed to tender the Shares issuable upon exercise of
such options and warrants pursuant to the Offer. If the Purchaser is deemed the
beneficial owner of all Shares subject to the Stockholder Agreement (including
those issuable upon exercise of options and warrants), the Purchaser would
beneficially own 6,829,345 Shares or 59.1% of the outstanding Shares on a fully
diluted basis.
<PAGE> 4
In December 1993, the Company entered into ten-year Employment Agreements
with Cecil Heftel, the Chairman of the Board and Co-Chief Executive Officer of
the Company, and Carl Parmer, the President and Co-Chief Executive Officer of
the Company, under which each of them is entitled to receive a base annual
salary of $500,000 and bonuses based on the performance of the Company. Under
those Employment Agreements, if the Company terminates the employment of Mr.
Heftel or Mr. Parmer without cause, he will be entitled to receive a lump sum
payment equal to the present value of all amounts remaining to be paid by the
Company to him under his Employment Agreement. For purposes of calculating
future bonuses, the Company will be deemed to have achieved the performance
level necessary to pay the maximum bonus. The Purchaser has informed Mr. Heftel
and Mr. Parmer that it intends to cause the Company to terminate their
employment, without cause, immediately following the purchase of Shares pursuant
to the Stockholder Purchase Agreement.
Concurrently with the execution of the Stockholder Purchase Agreement, Mr.
Heftel and Mr. Parmer each entered into an Agreement Not to Compete (each, an
"Agreement Not to Compete") and a Settlement Agreement (each, a "Settlement
Agreement") with the Company. Pursuant to the respective Settlement Agreements,
the employment by the Company of Mr. Heftel and Mr. Parmer will terminate
immediately following the purchase of Shares pursuant to the Stockholder
Purchase Agreement and the Company will pay Mr. Heftel $11,861,069 and Mr.
Parmer $6,941,960 in exchange for releases by Mr. Heftel and Mr. Parmer from any
claims resulting from termination of their respective Employment Agreements with
the Company. Pursuant to the Agreements Not to Compete, the Company will pay Mr.
Heftel $2,500,000 and Mr. Parmer $4,500,000 upon closing of the Stockholder
Purchase Agreement in exchange for their respective agreements not to compete
with the Company in certain specified markets for a period of five years from
the date of closing of the Stockholder Purchase Agreement. The Purchaser has
guaranteed the obligations of the Company under the Settlement Agreements and
the Agreements Not to Compete. The total amount to be paid to each of Mr. Heftel
and Mr. Parmer under his respective Settlement Agreement and Agreement Not to
Compete does not exceed the present value of all amounts remaining to be paid to
him by the Company under his respective Employment Agreement.
The Tender Offer Agreement, Stockholder Purchase Agreement, Settlement
Agreements and Agreements Not to Compete are described more fully in Section 12.
All information contained herein concerning Parent and the Purchaser has
been supplied by Parent or the Purchaser. All information contained herein
respecting the Company has been supplied by the Company.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and thereby purchase any and
all Shares validly tendered prior to the Expiration Date and not theretofore
withdrawn in accordance with Section 4. All Shares purchased pursuant to the
Offer will be purchased at the Offer Price, net to the seller in cash. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Tuesday, July 16,
1996, unless the Purchaser shall have extended the period of time for which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Purchaser, shall expire.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
THE RECEIPT OF THE FCC CONSENT AND THE EXPIRATION OR TERMINATION OF THE WAITING
PERIOD APPLICABLE TO THE PURCHASER'S ACQUISITION OF SHARES UNDER THE HSR ACT.
SEE SECTION 14.
Pursuant to the Tender Offer Agreement, if prior to 12:00 Midnight, New
York City time, on July 16, 1996, the number of Shares tendered in the Offer,
when combined with the Shares of Class A Common Stock
2
<PAGE> 5
owned by affiliates of the Purchaser, total 80% of the outstanding Shares of
Common Stock, Purchaser shall publish notice of such fact and shall extend the
Expiration Date by ten days. Pursuant to the Tender Offer Agreement, without the
consent of the Company, the Purchaser may not (a) reduce the Offer Price, (b)
amend or add to the conditions to the obligations of the Purchaser to purchase
Shares pursuant to the Tender Offer Agreement, (c) change the number of shares
of Common Stock subject to the Offer, (d) change the form of consideration
payable in the Offer, (e) extend the Expiration Date for the Offer, except as
provided in the immediately preceding sentence, or (f) terminate the Offer,
except as provided in the Tender Offer Agreement.
Subject to the terms of the Tender Offer Agreement and complying with any
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission"), including Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), relating to the obligation of the
Purchaser to pay for or return tendered Shares promptly after the termination or
withdrawal of the Offer, the Purchaser expressly reserves the right, at any time
and from time to time, upon the failure of any of the conditions specified in
Section 14, to delay acceptance for payment of or payment for any Shares,
regardless of whether the Shares were theretofore accepted for payment, or to
terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted for payment or paid for, by giving oral or written notice
of such delay in payment or termination to the Depositary.
In addition, if by the Expiration Date any or all conditions of the Offer
are not satisfied, the Purchaser reserves the right (i) subject to complying
with any applicable rules and regulations of the Commission, including Rule
14e-1(c), to delay acceptance for payment of or payment for any Shares until
satisfaction or waiver of the conditions to the Offer; (ii) with the consent of
the Company, to extend the period during which the Offer is to remain open (but
not beyond 12:00 midnight, New York City time, on October 30, 1996) and, subject
to the rights of tendering stockholders to withdraw their Shares, retain all
tendered Shares until the Expiration Date, or (iii) to waive any or all
conditions of the Offer and, subject to complying with applicable rules and
regulations of the Commission, accept for payment and purchase all validly
tendered Shares and not extend the Offer.
Any extension, waiver, amendment or termination of the Offer will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-1(d) under the Exchange Act requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment for Shares or it is unable to pay for
Shares pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may retain tendered Shares on
behalf of the Purchaser, and such Shares may not be withdrawn except to the
extent tendering stockholders are entitled to withdrawal rights as described in
Section 4. However, the ability of the Purchaser to delay the acceptance for
payment of Shares or the payment for Shares that the Purchaser has accepted for
payment is limited by Rule 14e-1 under the Exchange Act, which requires that a
bidder pay the consideration offered or return the securities deposited by or on
behalf of holders of securities promptly after the termination or withdrawal of
such bidder's offer. The Purchaser shall not have any obligation to pay interest
on the Offer Price for tendered Shares regardless of any extension of the Offer
or any delay in making such payment.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
3
<PAGE> 6
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to stockholders.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment (and thereby purchase) and
pay for all Shares validly tendered prior to the Expiration Date and not
theretofore withdrawn in accordance with Section 4 as promptly as practicable
after the later of (1) the Expiration Date, (2) the satisfaction or waiver of
the conditions set forth in Section 14, and (3) any date on or prior to October
30, 1996 until which the Purchaser has extended the Offer with the consent of
the Company pursuant to the Tender Offer Agreement. For a description of the
Purchaser's right to terminate the Offer and not accept for payment or pay for
Shares or to delay acceptance for payment or payment for Shares, see Sections 12
and 14.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, the Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (each, a "Book-Entry Transfer Facility"), pursuant to the
procedures set forth in Section 3, (ii) a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof) with all required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined below), and (iii) any other documents required by the Letter of
Transmittal. The per Share consideration paid to any stockholder pursuant to the
Offer will be the highest per Share consideration paid to any other stockholder
pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, then, without prejudice to the Purchaser's rights under the Offer
(but subject to compliance with Rule 14e-1(c) under the Exchange Act, which
requires that a tender offeror pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 4 below. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE
FOR TENDERED SHARES BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING SUCH PAYMENT.
4
<PAGE> 7
If any tendered Shares are not purchased for any reason or if certificates
are submitted for more Shares than are tendered, certificates for such Shares
not purchased or tendered will be returned, without expense to the tendering
shareholder (or, in the case of Shares tendered by book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility, such
Shares will be credited to an account maintained at the appropriate Book-Entry
Transfer Facility), as promptly as practicable following the expiration or
termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure set forth below.
In addition, either (i) certificates representing such Shares must be received
by the Depositary or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below, and a Book-Entry Confirmation (as defined
below) must be received by the Depositary, in each case prior to the Expiration
Date, or (ii) the guaranteed delivery procedure set forth below must be complied
with. No alternative, conditional or contingent tenders will be accepted.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility, prior to the
Expiration Date, (i) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back of this Offer to Purchase or (ii) the guaranteed delivery procedures
described below must be complied with. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation".
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
Guarantee of Signatures. Signatures on the Letter of Transmittal must be
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) that is a member or participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each of the foregoing constituting an "Eligible Institution"), unless the
Shares tendered thereby are tendered (i) by a registered holder of Shares who
has not completed either the box labeled "Special Delivery Instructions" or the
box labeled "Special Payment Instructions" on the Letter of Transmittal or (ii)
for the account of any Eligible Institution. If the certificates evidencing
Shares are registered in the name of a person or persons other than the signer
of the Letter of Transmittal, or if payment is to be made, or delivered to, or
certificates for unpurchased Shares are to be issued or returned to, a person
other than the registered owner or owners, then the tendered certificates must
be endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates or stock powers, with the signatures on the certificates or stock
powers guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 to the Letter of Transmittal.
5
<PAGE> 8
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect thereto), together with
a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), and any required signature guarantees, or, in the case
of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after (i) timely
receipt by the Depositary of certificates for such Shares or a Book-Entry
Confirmation with respect thereto, (ii) a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending upon when
certificates for Shares or Book-Entry Confirmations with respect to Shares are
actually received by the Depositary.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser as
such stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after June 1, 1996. All such proxies shall be considered
coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts for payment
Shares tendered by such stockholder as provided herein. Upon such acceptance for
payment, all prior powers of attorney and proxies given by such stockholder with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney and proxies may be given
(and, if given, will not be deemed effective). The designees of the Purchaser
will thereby be empowered to exercise voting and other rights with respect to
such Shares or other securities or rights in respect of any annual, special or
adjourned meeting of the Company's stockholders, or otherwise, as they in their
sole discretion deem proper. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able to
exercise voting and other rights with respect to such Shares and other
securities or rights, including voting at any meeting of stockholders then
scheduled.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES PURCHASED
PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT
SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE
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<PAGE> 9
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. Certain stockholders (including,
among others, all corporations and certain foreign individuals and entities) are
not subject to backup withholding. If a stockholder does not provide its correct
TIN or fails to provide the certifications described above, the Internal Revenue
Service ("IRS") may impose a penalty on such stockholder and payment of cash to
such stockholder pursuant to the Offer may be subject to backup withholding of
31%. All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature box and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Purchaser and the Depositary). Foreign
stockholders should complete and sign the main signature box and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 8 to the
Letter of Transmittal.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Purchaser, in its sole
discretion, and its determination will be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders of any Shares
that are determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of the Purchaser, be unlawful. The
Purchaser also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularity in the tender of any Shares. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions to the Letter of Transmittal) will be final and
binding on all parties. No tender of Shares will be deemed to have been validly
made until all defects and irregularities have been cured or waived. Unless
waived, any defects or irregularities in connection with tenders must be cured
within such time as the Purchaser shall determine. None of the Purchaser, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Tender Constitutes an Agreement. The tender of Shares pursuant to any one
of the procedures described above will constitute an agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after August 5, 1996 unless theretofore
accepted for payment as provided in this Offer to Purchase. If the Purchaser is
delayed in accepting for payment or paying for Shares or is unable to accept for
payment or pay for Shares pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Depositary may, on
behalf of the Purchaser retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in this Section 4, subject to Rule
14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
security holders promptly after the termination or withdrawal of such bidder's
offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered, if different from that of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in Section
3, any notice of withdrawal must also specify the name and number of the account
at the applicable Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
All questions as to the form and
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<PAGE> 10
validity (including time of receipt) of notices of withdrawal will be determined
by the Company, in its sole discretion, and its determination will be final and
binding on all parties. None of the Purchaser, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion briefly summarizes certain of the principal
Federal income tax consequences associated with the Offer. The discussion is
applicable only to a stockholder of the Company who (i) is a citizen or resident
of the United States or a corporation, partnership or other entity created or
organized in or under the laws of the United States and (ii) holds such Shares
as capital assets. In particular, the following discussion does not address the
potential tax consequences applicable to stockholders (i) who have received
Shares pursuant to the exercise of employee stock options or otherwise as
compensation, (ii) who are dealers in securities, or (iii) who are subject to
special tax treatment under the Internal Revenue Code of 1986, as amended (the
"Code") (including non-U.S. persons, life insurance companies, tax-exempt
organizations and financial institutions). Furthermore, the following discussion
does not consider any state, local or foreign tax consequences of the Offer.
Sales of Shares pursuant to the Offer will be taxable transactions for
Federal income tax purposes under the Code, and may also be taxable transactions
under applicable state, local, foreign and other tax laws. For Federal income
tax purposes, a tendering stockholder will generally recognize gain or loss
equal to the difference between the amount of cash received by the stockholder
pursuant to the Offer and the aggregate tax basis in the Shares tendered by the
stockholder and purchased pursuant to the Offer. Gain or loss will be calculated
separately for each block of Shares tendered and purchased pursuant to the
Offer.
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
stockholder's holding period for the Shares exceeds one year. Under present law,
long-term capital gains recognized by a tendering individual stockholder will
generally be taxed at a maximum Federal marginal tax rate of 28%.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Shares
may be subject to 31% backup withholding unless the stockholder provides its TIN
and certifies that such number is correct or properly certifies that it is
awaiting a TIN. A stockholder that does not furnish its TIN may be subject to a
penalty imposed by the IRS. Each stockholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER.
8
<PAGE> 11
6. PRICE RANGE OF THE CLASS A STOCK; DIVIDENDS ON THE SHARES
The Company's Class A Common Stock is traded in the over-the-counter
market, and prices for the Shares of Class A Common Stock are quoted on The
Nasdaq National Market under the symbol "HBCCA." The following table sets forth
for each of the fiscal quarters since July 27, 1994 (the date on which the
Company completed its initial public offering) the high and low closing sale
prices per share as reported on The Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
FISCAL YEAR 1994:
Fourth Quarter...................................................... $14 1/8 $ 9 3/4
FISCAL YEAR 1995:
First Quarter....................................................... 16 9 1/2
Second Quarter...................................................... 13 7/8 10
Third Quarter....................................................... 15 3/4 10 1/8
Fourth Quarter...................................................... 21 3/4 15 1/4
FISCAL YEAR 1996:
First Quarter....................................................... 20 14 3/4
Second Quarter...................................................... 21 15 1/4
Third Quarter (through June 6, 1996)................................ 27 3/8 19 1/4
</TABLE>
On May 31, 1996, the last full day of trading prior to the announcement of
the execution of the Tender Offer Agreement, the closing price per Share of
Class A Common Stock as reported on The Nasdaq National Market was $22.50.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES
OF CLASS A COMMON STOCK.
The Company's Class B Common Stock is not publicly traded.
The Company has not paid any dividends on the Class A or Class B Common
Stock since October 1, 1993, and the Tender Offer Agreement prohibits the
Company from paying any dividends.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE CLASS A COMMON STOCK, STOCK
QUOTATION AND EXCHANGE ACT REGISTRATION
The purchase of Shares of Class A Common Stock pursuant to the Offer will
reduce the number of Shares of Class A Common Stock that might otherwise trade
publicly and the number of holders of Shares of Class A Common Stock and could
adversely affect the liquidity and market value of the remaining Shares of Class
A Common Stock held by stockholders.
Depending upon the number of Shares of Class A Common Stock purchased
pursuant to the Offer, the Shares of Class A Common Stock may no longer meet the
requirements of the National Association of Securities Dealers, Inc. ("NASD")
for continued quotation on The Nasdaq National Market System. In general, in
order for an issue to be quoted on The Nasdaq National Market System such issue
must have at least 200,000 publicly held shares held by at least 400
stockholders or 300 stockholders of round lots, with a market value of at least
$1 million. If these standards were not met, quotations might continue to be
published through Nasdaq other than on the National Market System, but if the
number of holders of the Shares were to fall below 300, or if the number of
publicly held Shares of Class A Common Stock were to fall below 100,000, or if
the bid price per Share of Class A Common Stock were to fall below $1.00 and
certain other conditions were not met, or if there were not at least two market
makers for the Shares of Class A Common Stock, such Shares would no longer be
"qualified" for Nasdaq reporting. Nasdaq qualification rules provide that Shares
of Class A Common Stock held directly or indirectly by officers, directors or
beneficial owners of more than 10% of the Shares of Class A Common Stock will
not be considered as being publicly held. If, as a result of the purchase of
Shares of Class A Common Stock, pursuant to the Offer, such Shares no longer
meet the requirements of the NASD for continued quotation through Nasdaq and
such Shares are no longer included in Nasdaq, the market for the Shares could be
adversely affected.
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<PAGE> 12
If, as a result of the purchase of Shares pursuant to the Offer, the Shares
of Class A Common Stock no longer meet the requirements of the NASD for
quotation through Nasdaq and the Shares of Class A Common Stock are no longer
included in Nasdaq, it is possible that the Shares of Class A Common Stock would
continue to trade in the local over-the-counter market and that price quotations
would be reported by other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of stockholders remaining at the time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.
The Shares of Class A Common Stock are currently "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System, which
has the effect, among other things, of allowing brokers to extend credit on the
collateral of such securities. Depending upon factors similar to those described
above with respect to market quotations, it is possible that the Shares of Class
A Common Stock would no longer constitute "margin securities" for the purposes
of the margin regulations of the Board of Governors of the Federal Reserve
System and, therefore, could no longer be used as collateral for loans made by
brokers.
Registration of the Shares of Class A Common Stock under the Exchange Act
may be terminated upon application of the Company to the Commission if there are
fewer than 300 record holders of the Shares of Class A Common Stock. According
to the Company's transfer agent, as of June 1, 1996, there were 53 holders of
record of Shares of Class A Common Stock. This number does not include
beneficial owners who own Shares through a deposit agreement or similar
arrangement and who are included under the rules of the Commission in
determining record holders for purposes of the Exchange Act registration
requirements. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b) and the
requirement of furnishing a proxy statement in connection with stockholders'
meetings pursuant to Section 14(a), no longer applicable to the Company. If
registration of the Shares under the Exchange Act were terminated, the Shares of
Class A Common Stock would no longer be "margin securities" or be eligible for
reporting on The Nasdaq National Market.
Pursuant to the Tender Offer Agreement, the Purchaser has agreed for a
period of one year from and after the closing of the Tender Offer Agreement to
use its best efforts to cause the Shares of Class A Common Stock to remain
listed or quoted on a recognized national exchange or NASD quotation system. The
Purchaser cannot predict the number of Shares of Class A Common Stock that may
be tendered in the Offer. If few Shares of Class A Common Stock are tendered,
the public float will not be materially adversely affected. However, if a
substantial portion of the Shares of Class A Common Stock is tendered in the
Offer and purchased by the Purchaser, there may be no viable public market for
the Shares and the Class A Common Stock may cease to be quoted on Nasdaq
notwithstanding the Purchaser's agreement to use its best efforts to continue
such quotation.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices at 6767
West Tropicana Avenue, Las Vegas, Nevada 89103. The Company is the largest
Spanish language radio broadcasting company in the United States. The Company
currently owns 17 radio stations in six markets, 15 of which are located in Los
Angeles, New York, Miami, Chicago, and Dallas/Ft. Worth, which are five of the
ten largest Hispanic markets in the United States. The Company's two Los Angeles
stations, four Miami stations and six Dallas/Ft. Worth stations are the number
one ranked billing Spanish language radio station combinations in their
respective markets. The Company also owns Cadena Radio Centro ("CRC"), the
largest Spanish radio network in the United States, with approximately 75 radio
station affiliates in 50 cities. CRC enables the Company to extend its reach
into additional Hispanic markets where the Company does not presently own
stations.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted from the information
contained in the Company's Annual Report on Form 10-K for the
10
<PAGE> 13
year ended September 30, 1995 and its Quarterly Report on Form 10-Q for the
three months ended March 31, 1996. The following summary is qualified in its
entirety by reference to the Form 10-K and 10-Q and all the financial
information (including related notes) contained therein.
HEFTEL BROADCASTING CORPORATION AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31,
------------------- -------------------
1994(1) 1995 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total net revenues.......................... $27,729 $68,218 $31,021 $34,614
Total operating expenses.................... 21,286 56,271 26,790 29,721
Operating income............................ 6,443 11,947 4,232 4,892
Net income (loss)........................... 466 3,693 520 (113)
Net income (loss) per common and common
equivalent share.......................... .05 .34 .04 (.01)
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
--------------------- AT MARCH 31,
1994 1995 1996
-------- -------- ---------------
<S> <C> <C> <C>
Working capital.............................. $ 18,366 $ 14,967 $ 10,920
Total assets................................. 113,353 151,637 188,766
Long-term debt, less current portion......... 58,472 95,937 121,867
Stockholders' equity......................... 44,436 43,581 44,133
</TABLE>
- ---------------
(1) During August 1994, the Company completed three separate business
acquisitions and began consolidating a previously unconsolidated investment
in a joint venture. Total net revenues and net income (loss), adjusted for
interest expense on retired debt, relating to these acquisitions and
transaction from the respective dates of these transactions to September 30,
1994 was approximately $5,488,000 and $(80,000), respectively.
The Company is subject to the information requirements of the Exchange Act
and, in accordance therewith, is required to file reports relating to its
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options and other matters, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, DC 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, IL 60661. Copies of such information should be
obtainable, by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 450 Fifth Street, N.W.,
Washington, DC 20549. Such material should also be available for inspection at
the offices of the NASD, 1735 K Street, N.W., Washington, D.C. 20006.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
Parent, which is a Texas corporation, is a diversified broadcasting company
that currently owns or operates 72 radio stations and 16 television stations in
27 domestic markets. In addition, Parent owns a 50%
11
<PAGE> 14
equity interest in the Australian Radio Network Pty. Ltd., which operates eight
radio stations in Australia. Parent currently has acquisitions pending for 33
radio stations, including nine stations the Parent currently operates under
Local Marketing Agreements or Joint Sales Agreements, and one television station
in 14 domestic markets, in addition to the proposed acquisition of the stations
owned by the Company. If the proposed acquisitions are completed, including the
consummation of the Offer and the Stockholder Purchase Agreement, Parent would
own and operate 44 AM and 68 FM radio stations and 17 television stations in 37
domestic markets.
The Purchaser, which is an indirect wholly-owned subsidiary of Parent, is a
Nevada corporation that was incorporated in 1993 and holds certain broadcast
assets of the majority of the Parent's domestic radio stations.
The principal offices of Parent and the Purchaser are located at 200
Concord Plaza, Suite 600, San Antonio, Texas 78216-6940.
Set forth below is certain selected consolidated financial information with
respect to Parent and its subsidiaries excerpted or derived from the information
contained in Parent's Annual Report on Form 10-K for the year ended December 31,
1995 and Parent's Quarterly Report on Form 10-Q for the three months ended March
31, 1996. More comprehensive financial information is included in such reports
and other documents filed by Parent with the Commission, and the following
summary is qualified in its entirety by reference to such reports and other
documents and all the financial information (including any related notes)
contained therein. Such reports and documents should be available for inspection
and copying in the manner described below.
CLEAR CHANNEL COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------- -------------------
1991 1992 1993 1994 1995 1995 1996
------- -------- -------- -------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Net broadcasting revenue............................... $64,384 $ 82,205 $118,183 $173,109 $243,813 $ 51,858 $62,209
Station operating expenses............................. 44,981 53,532 75,990 100,437 131,258 33,182 38,230
Depreciation and amortization.......................... 7,641 12,253 17,447 24,668 33,770 8,399 8,755
------- -------- -------- -------- -------- -------- -------
Station operating income.............................. 11,762 16,420 24,746 48,004 78,785 10,277 15,224
Corporate expenses..................................... 2,403 2,890 3,464 5,100 7,414 1,531 1,674
------- -------- -------- -------- -------- -------- -------
Operating income...................................... 9,359 13,530 21,282 42,904 71,371 8,746 13,550
Interest expense....................................... (5,371) (4,739) (5,390) (7,669) (20,751) (4,448) (5,424)
Other income (expense)................................. (1,483) (1,217) (196) 1,161 (803) 259 205
Equity in net income of, and other income from,
nonconsolidated affiliates............................ -- -- -- -- 2,927 -- 875
------- -------- -------- -------- -------- -------- -------
Income before income taxes............................. 2,505 7,574 15,696 36,396 52,744 4,557 9,206
Income taxes.......................................... 1,379 3,281 6,573 14,387 20,730 1,878 2,968
------- -------- -------- -------- -------- -------- -------
Net income............................................ $ 1,126 $ 4,293 $ 9,123 $ 22,009 $ 32,014 $ 2,679 $ 6,238
======= ======== ======== ======== ======== ======== =======
Net income per common share........................... $ .04 $ .14 $ .29 $ .63 $ .91 $ .08 $ .18
======= ======== ======== ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------------------------------------- MARCH 31,
1991 1992 1993 1994 1995 1996
------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................. $ 3,765 $ 2,790 $ 5,517 $ 6,818 $ 5,391 $ 12,006
Total assets........................................... 92,450 146,993 227,577 411,594 563,011 594,979
Long-term debt, net of current maturities.............. 48,110 97,000 87,815 238,204 334,164 366,569
Shareholders' equity................................... 24,787 31,055 98,343 130,533 163,713 170,272
</TABLE>
- ---------------
(1) The comparability of results of operations is affected by acquisitions
consummated in certain of the periods presented.
12
<PAGE> 15
On May 24, 1995, Parent purchased 2,156,799 shares of the Class A Common
Stock from Grupo Radio Centro, S.A. de C.V. in a private transaction for
$20,489,590.50 in cash, or $9.50 per share. In connection with the purchase of
such shares, Parent entered into certain agreements with the Company and Cecil
Heftel (the "May 1995 Agreements") pursuant to which Cecil Heftel has agreed to
vote shares of the Common Stock covering 16% of the voting power of the Company
in accordance with the written instructions of Parent as long as Parent holds
19.5% of the economic interest in the Company. In addition, pursuant to the May
1995 Agreements, the Company granted Parent certain demand and piggyback
registration rights with respect to the 2,156,799 shares of Class A Common Stock
purchased by Parent in May 1995. Parent has exercised such demand rights and the
Company has registered of such shares under the Securities Act of 1933, as
amended. The May 1995 Agreements also included a "standstill" agreement under
which Parent agreed with the Company not to acquire additional Shares of the
Company which, combined with Parent's other holdings, would exceed 35% of the
economic interest in the Company or an interest in debt issued by the Company
without the written consent of the Company, which consent may be withheld at the
sole discretion of the Company. In connection with the Tender Offer Agreement
and the Stockholder Purchase Agreement, the Company waived the provisions of the
standstill agreement.
The name, citizenship, business address, present principal occupation and
five-year employment history of each of the directors and executive officers of
Parent and the Purchaser are set forth in Schedule I.
Except as set forth in this Offer to Purchase: (i) neither the Purchaser
nor Parent, nor, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I nor any associate or majority-owned subsidiary of
any of the foregoing, beneficially owns or has a right to acquire any equity
securities of the Company; (ii) neither the Purchaser nor Parent, nor, to the
best knowledge of the Purchaser and Parent, any of the persons or entities
referred to above, nor any director, executive officer or subsidiary of any of
the foregoing, has effected any transaction in such equity securities during the
past 60 days; (iii) neither the Purchaser nor Parent, nor, to the best knowledge
of the Purchaser and Parent, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any other person with
respect to any securities of the Company, including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against lost or the giving or
withholding of proxies, consents or authorizations; (iv) there have been no
contacts, negotiations or transactions since October 1, 1992 between Parent or
the Purchaser, or, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I, on the one hand, and the Company or its executive
officers, directors or affiliates on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of securities,
an election of directors, or a sale or other transfer of a material amount of
assets of the Company; and (v) neither the Purchaser nor Parent, nor, to the
best knowledge of the Purchaser and Parent, any of the persons listed in
Schedule I, has since October 1, 1992 had any transaction with the Company or
any of its executive officers, directors or affiliates that would require
disclosure under the rules and regulations of the Commission applicable to the
Offer.
Parent is subject to the information requirements of the Exchange Act and,
in accordance therewith, is required to file reports relating to its business,
financial condition and other matters. Information as of particular dates
concerning Parent's officers and directors, their remuneration, stock options
and other matters, the principal holders of Parent's securities and any material
interest of such persons in transactions with Parent is required to be disclosed
in proxy statements distributed to Parent's stockholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection and copying at the Commission's offices in the manner
described in Section 8. Such material should also be available for inspection at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
10. SOURCE AND AMOUNT OF FUNDS
Parent and the Purchaser estimate that the amount of funds required (i) to
purchase all outstanding Shares pursuant to the Offer will be approximately
$135,111,000; (ii) to purchase the Shares and shares of the Company's Series A
Preferred Stock pursuant to the Stockholder Purchase Agreement will be
approximately
13
<PAGE> 16
$81,216,000; (iii) to make payments pursuant to the Settlement Agreements and
Agreements Not to Compete will be approximately $25,800,000; and (iv) to pay
related fees and expenses will be approximately $300,000. The total amount of
funds required by the Purchaser in connection with the above-referenced
transactions is estimated to be approximately $242,427,000. The Purchaser plans
to obtain all funds needed for the foregoing through a capital contribution that
will be made by Parent to the Purchaser. Parent plans to obtain the necessary
funds through borrowings under its revolving credit facility with a group of
banks (the "Credit Facility"). The Credit Facility currently permits borrowings
of up to $600 million and will need to be amended to provide financing for the
above-referenced transactions. Parent has been advised by the lead bank under
the Credit Facility that the lead bank agrees with expanding the Credit Facility
to $1.0 billion, on terms that will not be substantially less favorable than the
terms of the existing Credit Facility. There can be no assurance that Parent
will be successful in increasing the size of the existing Credit Facility on
such terms. The Purchaser has not conditioned the Offer on obtaining such
financing.
Parent has drawn on the Credit Facility to finance various past
acquisitions. Borrowings under the Credit Facility currently bear interest at a
floating rate based on LIBOR plus 0.43%. Upon repayment of borrowings under the
Credit Facility, the amount repaid will become immediately available to Parent
for re-borrowing, subject to certain conditions. Substantially all of the assets
of Parent are pledged to secure the payment by Parent of its indebtedness under
the Credit Facility. The Credit Facility contains certain financial and
operational covenants and other restrictions with which Parent must comply,
including limitations on capital expenditures, the incurrence of additional
indebtedness, payment of cash dividends, and requirements to maintain certain
financial ratios. The Credit Facility matures in September 2003.
The Credit Agreement has been filed as an exhibit to the Schedule 14D-1 of
the Purchaser and Parent, and when the definitive amendment has been executed,
it will be filed as an exhibit to the Schedule 14D-1. Reference is made to such
exhibits for a more complete description of the terms of such documents.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER
In the Fall of 1995, Mr. L. Lowry Mays, President and Chief Executive
Officer of Parent, informally inquired of Cecil Heftel whether the Company would
have any interest in a possible acquisition by Parent. Mr. Heftel informed Mr.
Mays that the Company was not interested in an acquisition at that time, and
Parent did not pursue the matter further.
In February 1996, representatives of Alex. Brown & Sons Incorporated, an
investment banking firm retained by the Company ("Alex Brown"), contacted Parent
to determine whether Parent had any interest in pursuing a possible business
combination with or acquisition of the Company and forwarded to Parent a form of
confidentiality agreement that contained various "standstill" and other
restrictive provisions. Parent refused to enter into the confidentiality
agreement and informed Alex Brown that it was not interested in pursuing a
transaction at that time on such terms.
On the morning of May 29, 1996, Mr. Randall T. Mays, Vice President and
Treasurer of Parent, telephoned Mr. Carl Parmer, Co-Chief Executive Officer and
President of the Company, and offered, on behalf of Parent or a subsidiary of
Parent, to purchase the Shares of Common Stock held by Mr. Parmer, Cecil Heftel
and the members of Cecil Heftel's family at $23.00 per Share and to make a
tender offer for the remaining Shares of the Common Stock at $23.00 per Share.
For the remainder of such day, Parent and its counsel had numerous telephone
calls with the Company and its counsel with respect to the structure of the
transaction proposed by Parent.
On May 30, 1996, discussions between the Company and Parent and their
respective counsel continued, and counsel for the Company delivered to Parent a
draft of a proposed Tender Offer Agreement. Parent and its legal counsel also
commenced discussions on May 30, 1996, with representatives of the Selling
Stockholders and their counsel. On May 30 and 31, 1996, the Company, Parent,
representatives of the Selling Stockholders and their respective counsel had
conference calls in which certain terms of the proposed Tender Offer Agreement,
Stockholder Purchase Agreement, Settlement Agreements and Agreements Not to
Compete were negotiated and resolved. On May 31, 1996, the Purchaser entered
into a Confidentiality Agreement with the Company.
14
<PAGE> 17
In the afternoon of May 31, 1996, the Company informed Parent that the
Board of Directors of the Company had held a meeting and unanimously approved
the foregoing agreements.
On May 31, 1996, the boards of directors of Parent and the Purchaser held a
joint telephonic meeting, and after review of the transaction with senior
management, the boards of directors of the Purchaser and Parent approved the
Tender Offer Agreement, Stockholder Purchase Agreement, Settlement Agreements
and Agreements Not to Compete, all subject to further negotiation by senior
management.
On June 1, 1996, the Purchaser and the Company entered into the Tender
Offer Agreement, the Purchaser and the Selling Stockholders entered into the
Stockholder Purchase Agreement and Messrs. Heftel and Parmer entered into their
respective Settlement Agreements and Agreements Not to Compete with the Company
and the Purchaser.
On several occasions during the following days, representatives of the
Purchaser and the Company discussed the possible composition of the Company's
Board of Directors following the closing of the Offer and Stockholder Purchaser
Agreement but did not reach an agreement with respect to such matter.
On June 6, 1996, the Purchaser and the Company entered into an Amendment
No. 1 to the Tender Offer Agreement, which Amendment (a) provides for the
treatment of options and warrants as described elsewhere in this Offer to
Purchase, rather than cancellation and payment for such options and warrants
upon the closing of the Offer, (b) provides that upon the closing of the Offer
the Purchaser shall guarantee that the Company will pay the investment banking
firm fees and expenses incurred by the Company in connection with the Offer and
related transactions (including by loaning funds to the Company if necessary),
rather than pay such fees and expenses directly, and (c) waives the Company's
requirement that the Company file its Schedule 14D-9 on June 7, 1996. On June 6,
1996, the Selling Stockholders who own options or warrants also consented to the
treatment of their options and warrants as provided in Amendment No. 1 to the
Tender Offer Agreement.
12. PURPOSE OF THE OFFER; THE TENDER OFFER AGREEMENT, STOCKHOLDER PURCHASE
AGREEMENT, SETTLEMENT AGREEMENTS AND AGREEMENTS NOT TO COMPETE
The purpose of the Offer and the Stockholder Purchase Agreement is to
acquire control of the Company. The purpose of the Offer is to provide all
stockholders of the Company who are not party to the Stockholder Purchase
Agreement the opportunity to sell their Shares at the same price at which the
Selling Stockholders are selling their Shares.
TENDER OFFER AGREEMENT. The following is a summary of certain provisions of
the Tender Offer Agreement, a copy of which is filed as an Exhibit to the
Schedule 14D-1 filed by the Purchaser and Parent with the Commission. Such
summary is qualified in its entirety by reference to the Tender Offer Agreement.
The Offer. The Tender Offer Agreement provides for the making of the Offer
and requires that the Offer shall remain open for 40 days; provided, however, if
at any time prior to the end of such 40 day period, Shares of Common Stock are
tendered to the Purchaser which when combined with the Shares of Class A Common
Stock owned by affiliates of the Purchaser total 80% of the outstanding Shares
of Common Stock, the Purchaser shall publish notice of such fact and shall
extend the Expiration Date by ten days.
The Tender Offer Agreement provides that unless sooner terminated in
accordance with its terms, the closing of the transactions contemplated by the
Tender Offer Agreement (the "Closing") shall occur on the first business day
(the "Closing Date") after satisfaction or waiver of the conditions set forth in
the next succeeding paragraph.
The obligation of the Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer is subject to the satisfaction or waiver of the
following conditions: (i) the expiration or termination of the applicable
waiting period under the HSR Act ; (ii) the FCC Consent (as defined below)
becoming a Final Order (as defined below), or if the primary lenders for
Purchaser do not require that the FCC Consent become a Final Order to consummate
the Closing, then the granting of the FCC Consent and the giving of public
notice of such fact; (iii) no temporary restraining order, preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a government, regulatory or
15
<PAGE> 18
administrative agency or commission shall be in effect which restrains or
prohibits the transactions contemplated by the Tender Offer Agreement; and (iv)
that all representations and warranties of the Company contained in the Tender
Offer Agreement shall be true and correct in all material respects at and as of
the Closing Date (except those representations and warranties which address
matters only as of a particular date shall remain true and correct in all
material respects as of such date) and the Company shall have performed in all
material respects all agreements and covenants required to be performed by it
pursuant to the Tender Offer Agreement prior to or at the Closing Date.
Pursuant to the Tender Offer Agreement, the Purchaser reserves the right to
modify the Offer except that the Purchaser has agreed that, without the written
consent of the Company, no change in the Offer may be made which: (i) reduces
the Offer Price, (ii) amends or adds to the conditions to the obligations of the
Purchaser as set forth above, (iii) changes the number of shares of the Company
subject to the Offer, (iv) changes the form of consideration payable in the
Offer, (v) extends the Expiration Date, except as set forth in the Tender Offer
Agreement, or (vi) terminates the Offer, except as set forth in the Tender Offer
Agreement.
Stock Options and Warrants. The Tender Offer Agreement provides that each
option to purchase Class A Common Stock of the Company or each warrant to
purchase Class B Common Stock of the Company (collectively, the "Convertible
Securities" and individually, a "Convertible Security") if not exercised before
the Closing Date and upon condition that the Purchaser receives any consent of
the security holder necessary to effectuation, will be deemed exercised on the
Closing Date and the shares underlying such Convertible Securities will be
deemed to have been tendered in the Offer and accepted by the Purchaser, and, in
settlement of any such tenders so accepted, the Purchaser on the Closing Date
shall pay to the Company, an amount equal to the aggregate of the exercise
prices of the Convertible Securities so exercised and, to each holder of any
such Convertible Security whose tender is accepted, an amount equal to (x) the
product of (i) the Offer Price minus the exercise price per share of the
Convertible Security and (ii) the total number of shares of Company Common Stock
for which such Convertible Security has been exercised and which have been
purchased by the Purchaser on the Closing Date less (y) any federal, state,
local or foreign taxes required to be withheld from such payment. The Board of
Directors of the Company (or, if appropriate, any committee thereof) shall adopt
such resolutions or take such other actions as are necessary, subject to
obtaining any applicable security holder consent, to implement the terms and
conditions of the prior sentence, including, without limitation, accelerating
the vesting and exercisability of all Convertible Securities to the Closing
Date; provided, however, that the vesting and exercisability of a Convertible
Security shall not be accelerated if the holder of the Convertible Security does
not deliver the applicable holder consent. The Tender Offer Agreement also
provides that the Company and the subsidiaries of the Company shall take such
action as may be permitted under the Company's Stock Option Plan and/or the
terms of the Convertible Securities to effect the exercise of the Convertible
Securities on the Closing Date and shall comply with all requirements regarding
income tax withholding in connection therewith. In addition to the foregoing,
the Company and the subsidiaries of the Company shall take such action as may be
permitted under the Company's Stock Option Plan and/or the terms of the
Convertible Securities to accelerate the vesting of the right to purchase all
shares of Class A Common Stock subject to options included in the Convertible
Securities on the Closing Date and shall comply with all requirements regarding
income tax withholding in connection with accelerating the vesting of such
rights. The Tender Offer Agreement also provides that the Company will use its
best efforts to obtain the security holder consents referred to above and to
provide the Purchaser with such other evidence requested by the Purchaser that
no holder of any Convertible Security will have any right to acquire any equity
interest in the Company, the Purchaser or any of their respective subsidiaries
as a result of the exercise or conversion of any Convertible Security or other
rights after the Closing Date.
Representation and Warranties of the Purchaser. The Tender Offer Agreement
contains customary representations and warranties by the Purchaser, including,
among other things, (i) with respect to the organization, corporate powers and
qualifications of the Purchaser; (ii) that the Purchaser has the necessary
corporate power and authority to execute and deliver the Tender Offer Agreement
and to consummate the transactions contemplated therein; (iii) with respect to
necessary consents (other than (A) the consent of the FCC to the transfer of
control of the FCC licenses for the stations owned by the Company's subsidiaries
(the
16
<PAGE> 19
"Company FCC Licenses"); (B) compliance with the HSR Act, and (C) compliance
with the applicable requirements of the Exchange Act); (iv) with respect to the
absence of any broker or other fees or commissions; and (v) that Purchaser has
the funds necessary to consummate the Offer and the transactions contemplated by
the Tender Offer Agreement.
Representation and Warranties of the Company. The Tender Offer Agreement
contains customary representations and warranties with respect to the Company,
including, among other things, (i) with respect to the organization, corporate
powers and qualifications of the Company; (ii) with respect to the
capitalization of the Company; (iii) that the Company has the necessary power
and authority to execute and deliver the Tender Offer Agreement and to
consummate the transactions contemplated therein; (iv) with respect to necessary
consents (other than (A) the consent of the FCC to the transfer of control of
the Company FCC Licenses, (B) the compliance with the HSR Act, and (C)
compliance with the applicable requirements of the Exchange Act); (iv) with
respect to the absence of any broker or other fees or commissions; (v) that the
Board of Directors of the Company, at a meeting duly called and held, has
resolved to recommend acceptance of the Offer; and (vi) with respect to the
Company's financial statements and financial condition.
Interim Agreements. The Tender Offer Agreement obligates the Company and
its subsidiaries, from the date of the Tender Offer Agreement until the Closing
Date to conduct its business and keep its books, accounts, records, and files in
the usual and ordinary manner in which such business has been conducted in the
past, to deliver to the Purchaser copies of any report, statement, or schedule
filed with the Commission, to provide the Purchaser with copies of the regular
monthly internal operating statements of the Company, to make all commercially
reasonable efforts to preserve the business organization of each Station (as
defined below), retain the employees, consultants, and agents of each Station
and preserve the goodwill of each Station, to keep all tangible personal
property and real property in good operating condition (ordinary wear and tear
excepted), and repair and maintain adequate and usual supplies of inventory,
office supplies, spare parts, and other materials, and to maintain in effect the
casualty and liability insurance on its assets.
The Tender Offer Agreement also contains specific covenants as to certain
impermissible activities of the Company, which provide that the Company will not
(and will not permit any of its subsidiaries to) do the following: (i) issue,
sell, pledge, dispose of or encumber any shares of, or any options, warrants or
rights of any kind to acquire any shares of or any securities convertible into
or exchangeable or exercisable for any shares of capital stock of the Company or
any subsidiary of the Company (except for shares issuable upon exercise of the
issued and outstanding Convertible Securities); (ii) except (A) in the ordinary
course of business and consistent with prior practice, (B) for transactions with
nonaffiliates of the Company which involve payments up to $500,000 in the
aggregate, and (C) for the sale of KLTY-TV, sell, pledge, dispose of or encumber
any assets of the Company or any subsidiary of the Company which are material to
the Company or any subsidiary of the Company; (iii) split, combine, subdivide or
reclassify any shares of the Company's capital stock or declare, set aside, or
pay any dividend or distribution (whether payable in cash, stock, property or
otherwise) with respect to any of the Company's capital stock, other than the
payment in cash of any accrued dividends on the Series A Preferred Stock; (iv)
redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise
acquire any of the Company's capital stock; (v) adopt a plan of complete or
partial liquidation or resolutions providing for the complete or partial
liquidation or dissolution of the Company or any subsidiary of the Company,
except for the Subsidiary Reorganizations (as defined in the Tender Offer
Agreement); (vi) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or division
or any material assets thereof or, other than cash management transactions in
the ordinary course of business and consistent with prior practice, make any
investment either by purchase of stock or securities, contributions to capital,
property transfer or purchase of any property or assets of any other individual
or entity; (vii) amend or modify the corporate charter, bylaws or other
organizational documents of any subsidiary of the Company, except in connection
with the Subsidiary Reorganizations; (viii) enter into any agreement or
transaction with any, or modify the terms of any existing agreement with any,
affiliate; (ix) terminate or fail to renew any Company FCC License; (x) fail to
operate any radio station owned by the Company or a subsidiary of the Company in
accordance with the Communications Act of 1934, the rules, regulations and
policies of the FCC and the terms of the Company FCC Licenses, other than
failures which, individually or in the aggregate, are not reasonably anticipated
to have a material adverse effect on the
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<PAGE> 20
business, assets, results of operations, financial condition or prospects of the
Company on a consolidated basis; (xi) cancel, discount or otherwise compromise
any accounts receivable except in the ordinary course of business consistent
with past practice; (xii) fail to file in a timely manner any applications to
renew a Company FCC License; (xiii) (other than agreements for the sale of air
time) enter into any agreement which involves payments by the Company of $50,000
or more, unless such agreement provides for cancellation thereof by the Company
on 60 or fewer days notice and the amount payable by the Company during the
period from the date of delivery of notice of cancellation until the date of
cancellation plus any penalty for early termination does not exceed $50,000;
(xiv) enter into any barter or trade agreement that is prepaid; (xv) apply to
the FCC for any construction permit that would restrict the current operations
of any of the radio stations owned by the Company's subsidiaries (individually,
a "Station") or make any change in any Station's buildings, leasehold
improvements or fixtures, except in the ordinary course of business or as
necessary to comply with the Company's affirmative covenants with respect to the
Renewal Application (as defined below); (xvi) enter into any contract,
agreement, commitment or arrangement to do any of the foregoing. In addition,
except (A) for salary increases or other employee benefit arrangements in the
ordinary course of business and consistent with prior practice, (B) as may be
required pursuant to any agreements in effect on the date of the Tender Offer
Agreement, or (C) as may be required by law, neither the Company nor any
subsidiary of the Company shall (1) grant any severance or termination pay to,
or enter into any new employment or severance agreement with, any officer or
employee of the Company or any subsidiary of the Company, (2) adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employee benefit plan, agreement, trust fund or other arrangement
for the benefit or welfare of employees or former employees, or (3) increase the
compensation or fringe benefits of any employee or former employee or pay any
benefit not required by any existing plan, arrangement or agreement. In
addition, neither the Company nor any subsidiary of the Company shall make or
revoke any material tax election, settle or compromise any material federal,
state, local or foreign tax liability (or any other tax liability which may have
a material effect on taxable years ending after the Closing Date) or change (or
make a request to any taxing authority to change) any aspect of accounting for
tax purposes in any material respect.
No Other Bids. The Tender Offer Agreement prohibits the Company from
directly or indirectly soliciting, initiating or encouraging (including by way
of furnishing information or assistance) any inquiry or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any inquiry
or proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as defined below) (a "Takeover Proposal") or entering
into any discussions, contracts or negotiations with respect to any Competing
Transaction. The Tender Offer Agreement also provides that the Company shall not
authorize or knowingly permit any of its officers, directors, employees,
investment bankers, attorneys, accountants or other advisors or representatives
to take any such action and the Company will direct such parties not to take any
such action. Under the Tender Offer Agreement, the Company promptly shall advise
the Purchaser in writing of any Takeover Proposal and shall, in such notice,
indicate the identity of the offeror and the material terms and conditions of
any such Takeover Proposal, including, without limitation, price.
Notwithstanding the foregoing, nothing contained in the Tender Offer Agreement
prevents the Board of Directors of the Company or any committee thereof from (a)
(i) furnishing or causing to be furnished information concerning the Company and
its businesses, properties or assets to a third party, (ii) engaging in
negotiations with a third party, (iii) taking and disclosing to the Company's
stockholders a position with respect to any Takeover Proposal (and, in
connection therewith, withdrawing or modifying the approval or recommendation by
the Board of Directors of the Offer) or (iv) entering into a Competing
Transaction, but in each case referred to in the foregoing clauses (i) through
(iv) only to the extent that prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity (A) the
Board of Directors of the Company shall conclude, after consultation with its
outside legal counsel (which may be the Company's regularly engaged legal
counsel), in good faith that such action is required under applicable law for
the discharge of its fiduciary duties, and (B) the Company provides written
notice to Purchaser to the effect that it is furnishing information, or
affording access to properties, books or records to, or entering into
discussions or negotiations with, such person or entity or (b) complying with
Rule 14e-2 promulgated under the Exchange Act. A "Competing Transaction" is
defined in the Tender Offer Agreement as any merger, consolidation,
reorganization, share exchange or other business combination involving the
Company or any subsidiary of the
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<PAGE> 21
Company or any acquisition in any manner of beneficial ownership of 20% or more
of the outstanding shares of any class of capital stock of the Company, or any
class of capital stock of any subsidiary of the Company, or of all or a
significant portion of the assets of the Company and the subsidiaries of the
Company, taken as a whole.
Control of Stations. Pursuant to the Tender Offer Agreement, until the
grant of the FCC Consent, the Purchaser shall not directly or indirectly
control, manage, supervise or direct the operation of the Company's radio
stations or the conduct of the Company's business, including, but not limited
to, matters relating to programming, personnel and finances, all of which shall
remain and be solely the responsibility of and under the complete discretion and
control of each licensee of the Company's radio stations.
Renewal Application. The Tender Offer Agreement provides if the application
for renewal of the license for WAMR-FM, Miami, Florida (the "Renewal
Application") remains pending or has not become a Final Order, both the
Purchaser and the Company agree that the Closing shall occur and both parties
agree to abide by the procedures established in Stockholders of CBS, Inc., FCC
95-469 (rel. Nov. 22, 1995) para. para. 34-35, for processing applications for
transfer of control of a license during the pendency of an application for
renewal of a station license. Pursuant to the Tender Offer Agreement, the
Company agrees to use commercially reasonable efforts to cooperate with the
Purchaser with the prosecution of the Renewal Application, and further agrees
that any interest it may acquire in such license at Closing is subject to
whatever action the FCC may ultimately take with respect to the Renewal
Application. This agreement with respect to the Renewal Application will survive
the Closing until any order issued by the FCC with respect to the Renewal
Application becomes a Final Order.
Access to Information; Confidentiality. The Tender Offer Agreement provides
that until the Closing Date, the Company will give Purchaser and its
representatives reasonable access, during normal business hours at all
reasonable times, to the Company's officers, employees, agents, properties,
books, records and contracts, and shall furnish and cause each Company
subsidiary to furnish to the Purchaser all financial, operating and other data
and information as requested by the Purchaser and its representatives, subject
to Purchaser maintaining the confidentiality of any non-public information
disclosed to it as provided in the Confidentiality Agreement (as defined in the
Tender Offer Agreement).
Fees and Expenses. The Tender Offer Agreement provides that all costs and
expenses incurred in connection with the Offer, the Tender Offer Agreement, and
the transactions contemplated by the Tender Offer Agreement shall be paid by the
party incurring such fees and expenses, provided, however, if the Closing
occurs, the Purchaser shall guarantee that the Company pays all fees and costs
payable to the investment bankers set forth in the Tender Offer Agreement and
shall loan the Company funds to pay such fees and costs if the Company does not
have sufficient cash.
Reasonable Efforts. Subject to the terms and conditions provided in the
Tender Offer Agreement, each of the Company and the Purchaser shall cooperate
and use their respective reasonable efforts to take or cause to be taken, all
action, and to do, or cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by the Tender Offer Agreement.
Consents and Filings. Pursuant to the Tender Offer Agreement, each of the
Company and the Purchaser will (i) make any required filings and submissions
under the HSR Act with respect to the Offer by June 14, 1996,(ii) substantially
comply with any request for additional information issued by the Federal Trade
Commission, the Department of Justice, or any other antitrust authority in
connection with the Offer, and (iii) take all reasonable actions to obtain any
other consent, authorization, order, or approval of, or any exemption by, any
governmental entity required to be obtained or made of any governmental entity
in connection with the Offer. Each party will cooperate promptly with the other
party in furnishing information to the other party in connection with the public
filings.
Indemnification. Under the Tender Offer Agreement, the Purchaser has agreed
to indemnify the Company, each stockholder who executes the Stockholder Purchase
Agreement, and each person who is now, or who becomes prior to the Closing Date
an officer or director of the Company or any subsidiary of the Company (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses,
liabilities or
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judgments, or amounts that are paid in settlement with the approval of the
Purchaser, arising out of or related to any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the Tender Offer Agreement or the transactions contemplated therein. The Tender
Offer Agreement, however, provides that no indemnity shall be available to the
extent a court of competent jurisdiction finally determines that the claim for
indemnity is caused by the Company knowingly or intentionally misrepresenting
that it may enter into the Tender Offer Agreement.
Pursuant to the Tender Offer Agreement, from and after the Closing, the
Purchaser shall indemnify each person who is now, or who becomes prior to the
Closing Date an officer or director of the Company or any subsidiary of the
Company (the "D&O Indemnified Parties") against all losses, claims, damages,
costs, expenses, liabilities or judgments, or amounts that are paid in
settlement with the approval of the Purchaser, arising out of or related to any
claim, action, suit, proceeding or investigation based in whole or in part or
arising in whole or in part out of the fact that such person is or was a
director or officer of the Company or any subsidiary of the Company whether
pertaining to any matter existing or occurring at or prior to the Closing Date
(including, without limitation, any matter relating to the transactions
contemplated by the Tender Offer Agreement) and whether asserted or claimed
prior to, or at or after, the Closing Date, in each case to the full extent the
Company or the applicable subsidiary of the Company would have been permitted
under the law of the State of its incorporation and its Certificate, or Articles
of Incorporation and Bylaws to indemnify such person (and the Purchaser shall
pay expenses in advance of the final disposition of any such action or
proceeding to each D&O Indemnified Party upon receipt of any undertaking by or
on behalf of such D&O Indemnified Party to repay such amount if it shall
ultimately be determined that he or she is not entitled to indemnification). All
rights to indemnification existing in favor of the D&O Indemnified Parties will
continue in full force and effect after the Closing Date.
Company Indebtedness. Pursuant to the Tender Offer Agreement, concurrently
with the Closing, the Purchaser shall repay or cause to be repaid all
outstanding indebtedness under the Company's Credit Agreement or, at the
Purchaser's option, obtain the consent of the Company's lenders under such
Credit Agreement to have such indebtedness remain outstanding.
Maintain Listing. Under the Tender Offer Agreement, for a period of one
year from and after the Closing, the Purchaser shall use its best efforts to
cause the shares of Class A Common Stock to remain listed or quoted on a
recognized national exchange or NASD quotation system.
Independent Directors. Pursuant to the Tender Offer Agreement, from and
after the Closing and until the later of one year from the Closing Date or the
date on which the Company is no longer a reporting company under the Exchange
Act, the Purchaser shall cause the Company to maintain two independent
directors.
FCC Approval. The Tender Offer Agreement provides that on or before June 7,
1996, the parties shall file with the FCC applications (the "FCC Applications")
for the consent of the FCC to the change in control of the holders of the
Company FCC Licenses (the "FCC Consent"). The parties shall thereafter prosecute
the FCC Applications with all reasonable diligence and otherwise use
commercially reasonable efforts to obtain the FCC Consent as expeditiously as
practicable and shall use commercially reasonable efforts to cause the FCC
Consent to become a Final Order. Each party will use commercially reasonable
efforts to comply with the reasonable requests of the FCC for further
information in connection with the FCC Applications. If reconsideration or
judicial review is sought with respect to the FCC Consent, the party affected
shall vigorously oppose such efforts for reconsideration or judicial review. The
term "Final Order" means a written action or order issued by the FCC setting
forth the FCC Consent (a) which has not been reversed, stayed, enjoined, set
aside, annulled or suspended, and (b) with respect to which (i) no requests have
been filed for administrative or judicial review, reconsideration, appeal or
stay, and the time for filing any such requests and for the FCC to set aside the
action on its own motion (whether upon reconsideration or otherwise) has
expired, or (ii) in the event of the filing of any such request for review,
reconsideration, appeal or stay, the action granting the FCC Consent shall have
been reaffirmed or upheld and the time for further review, reconsideration or
appeal has expired without the filing of any such action for further review or
such requests have been withdrawn or denied.
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<PAGE> 23
Termination. The Tender Offer Agreement may be terminated and the Offer may
be abandoned at any time prior to the Closing Date upon written notice promptly
given to the other party: (i) by mutual written consent of the parties; (ii) by
either Purchaser or the Company, if the FCC denies or dismisses the FCC
Applications and the time for reconsideration or court review under the
Communications Act of 1934 with respect to such denial or dismissal has expired
and there is not pending with respect thereto a timely filed petition for
reconsideration or request for review; (iii) by either the Company or the
Purchaser, if the Board of Directors of the Company concludes, after taking into
account the advice of outside legal counsel (which may be the Company's
regularly engaged legal counsel), that accepting a proposed Competing
Transaction is required under applicable law for the discharge of its fiduciary
duties and the Company enters into an agreement for such Competing Transaction;
provided, however, that the Company may not terminate the Tender Offer Agreement
pursuant to this clause (iii) earlier than forty-eight hours after furnishing
notice to the Purchaser of such Competing Transaction; (iv) by either the
Company or the Purchaser if (A) the Company shall have determined, pursuant to
duly adopted resolutions of its Board of Directors, not to recommend acceptance
of the Offer, or the Company's recommendation to accept the Offer is withdrawn
or modified, or resolved to be withdrawn or modified, by reason of receipt of a
Takeover Proposal, or (B) the Company recommends, pursuant to duly adopted
resolutions, any Takeover Proposal from a person or entity other than the
Purchaser or its affiliates; provided, however, that the Purchaser shall not
terminate the Tender Offer Agreement pursuant to this clause (iv) if, as a
result of the Company's receipt of a Takeover Proposal from a third party, the
Company, as required by applicable law, as advised by outside counsel,
withdraws, modifies or amends its approval or recommendation of acceptance of
the Offer, but within five business days thereafter, the Company publicly
reconfirms to all of its stockholders its recommendation of acceptance of the
Offer; (v) by the Purchaser, if the Company fails to perform or breaches any of
its material obligations or duties under the Tender Offer Agreement and the
Company has not cured such failure to perform or breach within fifteen days
after delivery of written notice from the Purchaser or upon a material breach of
any representation and warranty of the Company contained in the Tender Offer
Agreement; (vi) by the Company, if the Purchaser fails to perform or breaches
any of its material obligations or duties under the Tender Offer Agreement, and
the defaulting party has not cured such failure to perform a breach within
fifteen days after delivery of written notice from the Company or upon material
breach of any representation and warranty of the Purchaser contained in the
Tender Offer Agreement; and (vii) by the Purchaser or the Company, if the
Closing shall not have occurred on or before October 31, 1996; provided,
however, the right to terminate the Tender Offer Agreement pursuant to this
clause (vii) shall not be available to any party whose failure to fulfill any
obligation under the Tender Offer Agreement has been the cause of, or results
in, the failure of the Closing to have occurred on or before October 31, 1996.
Pursuant to the Tender Offer Agreement, in the event of the termination of
the Tender Offer Agreement, the Tender Offer Agreement shall become void, and
there shall be no liability or obligations on the part of any party to the
Tender Offer Agreement, except for any liability arising under the
Confidentiality Agreement (as defined in the Tender Offer Agreement) or for any
right to indemnification under the Tender Offer Agreement and except (i)
liability for any willful breach of any obligation, covenant or agreement
contained in the Tender Offer Agreement or any intentional failure of the
representations and warranties contained in the Tender Offer Agreement to have
been true, and (ii) (x) if the stockholders who are parties to the Stockholder
Purchase Agreement terminate such agreement and (y) (1) the Company terminates
the Tender Offer Agreement pursuant to clauses (iii) and (iv) of the immediately
preceding paragraph, or (2) Purchaser terminates the Tender Offer Agreement and
the Offer pursuant to clauses (iii) and (iv) of the immediately preceding
paragraph, the Company will pay to Purchaser $13.5 million within five business
days after the conditions contained in the foregoing clauses (x) and (y) are
satisfied; provided, however, if the Company is prohibited by its principal
senior lender or lenders from paying the sum required under clause (ii) of this
paragraph in cash, then in lieu of such payment, the Company shall immediately
issue to the Purchaser a number of shares of Class A Common Stock having a fair
market value equal to such sum (determined by taking the average closing price
of Class A Common Stock on the NASDAQ National Market for the ten business days
immediately following the public announcement of the termination of the Tender
Offer Agreement). If the Company shall issue shares to the Purchaser as
contemplated in the preceding sentence, such shares shall be registered under
the Securities Act and freely tradeable upon delivery, or if the foregoing is
not reasonably
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<PAGE> 24
practicable, shall be subject to a registration rights agreement enabling the
Purchaser to sell such shares without undue delay or expense. The Tender Offer
Agreement provides that if the Company fails to promptly pay any amounts under
clause (ii) of this paragraph when due, the Company shall in addition thereto
pay to the Purchaser all costs and expenses (including fees and disbursements of
counsel) incurred in collecting such amounts together with interest on the
unpaid amount from the date such payment was required to be made until the date
such payment is received by the party entitled to such payment at a per annum
rate equal to the prime rate, published in The Wall Street Journal under the
heading "Money Rates" or a successor heading, as in effect from time to time
during such period. Pursuant to the Tender Offer Agreement, recovery of damages
shall be the sole and exclusive remedy of the Purchaser in connection with the
termination of the Tender Offer Agreement for the reasons set forth in clause
(i) of this paragraph and also that recovery of $13.5 million shall be the sole
and exclusive remedy of the Purchaser in connection with the termination of the
Tender Offer Agreement as provided under clause (ii) of this paragraph,
regardless of the actual damages sustained. The Tender Offer Agreement provides
that the Purchaser waives its right to specific performance.
Amendment and Waiver. The Tender Offer Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties. The parties
to the Tender Offer Agreement may (i) extend the time for performance of any of
the obligations or other acts of any other party hereto, or (ii) waive
compliance with any of the agreements of any other party or with any conditions
to its own obligations, provided, that any such extension or waiver shall be
valid only if set forth in a written instrument and signed on behalf of the
party making the waiver or granting the extension by a duly authorized officer.
STOCKHOLDER PURCHASE AGREEMENT. On June 1, 1996, the Purchaser entered into
the Stockholder Purchase Agreement with the Selling Stockholders. The Selling
Stockholders and the number and type of Shares subject to the Stockholder
Purchase Agreement are as follows: Carl Parmer, 160,000 Shares of Class A Common
Stock and 413,026 Shares of Class B Common Stock; Catharine Rolph 232,146 Shares
of Class B Common Stock and 335,635 Shares of Series A Preferred Stock; Margaret
A. H. Wilson, 445,649 Shares of Class B Common Stock; Susan Heftel-Liquido, as
trustee of the Susan Heftel-Liquido Trust u/t/d 2/1/93, 503,727 Shares of Class
B Common Stock; Christopher Lee Heftel, 321,872 Shares of Class B Common Stock;
Terry Heftel, 96,810 Shares of Class B Common Stock; Richard Heftel, as trustee
of the Richard Heftel Living Trust dated January 9, 1996, 559,118 Shares of
Class B Common Stock; Cecil Heftel, 696,181 Shares of Class B Common Stock; with
respect to all of the following Selling Stockholders, each owns 4,400 Shares of
Class B Common Stock: Michele Lopez, Michael Donohoe, James Donohoe, Lani
Donohoe, as custodian for Josh Donohoe, under the California Uniform Transfers
to Minors Act, Margaret Wilson, as custodian for Nalani Wilson, under the Hawaii
Uniform Transfers to Minors Act, Margaret Wilson, as custodian for Ryan Wilson,
under the Hawaii Uniform Transfers to Minors Act, Margaret Wilson, as custodian
for Deven Wilson, under the Hawaii Uniform Transfers to Minors Act, Susan
Heftel-Liquido, as custodian for Francisco Liquido, under Hawaii Uniform
Transfers to Minors Act, Susan Heftel-Liquido, as custodian for Tiara Liquido,
under the Hawaii Uniform Transfers to Minors Act, Susan Heftel-Liquido, as
custodian for Carlo Liquido, under the Hawaii Uniform Transfers to Minors Act,
Susan Heftel-Liquido, as custodian for Fernando Liquido, under the Hawaii
Uniform Transfers to Minors Act, Christopher Lee Heftel, as custodian for Logan
Heftel, under the Tennessee Uniform Transfers to Minors Act, Christopher Lee
Heftel, as custodian for Brannon Heftel, under the Tennessee Uniform Transfers
to Minors Act, Christopher Lee Heftel, as custodian for Hayden Heftel, under the
Tennessee Uniform Transfers to Minors Act, Terry Heftel, as custodian for
Jonathan Heftel, under the Utah Uniform Transfers to Minors Act, Terry Heftel,
as custodian for Jeffrey Welch, under the Utah Uniform Transfers to Minors Act,
Terry Heftel, as custodian for Jeremy Heftel, under the Utah Uniform Transfers
to Minors Act, Richard Heftel, as custodian for Kawika Heftel, under the
California Uniform Transfers to Minors Act, Richard Heftel, as custodian for
Christian Heftel, under the California Uniform Transfers to Minors Act, and
Richard Heftel, as custodian for Brittany Heftel, under the California Uniform
Transfers to Minors Act.
The following is a summary of certain provisions of the Stockholder
Purchase Agreement, a copy of which is filed as an Exhibit to Schedule 14D-1 of
the Purchaser and Parent. Such summary is qualified in its entirety by reference
to the Stockholder Purchase Agreement.
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<PAGE> 25
Purchase of Stock. The Stockholder Purchase Agreement provides that each
Selling Stockholder shall sell and the Purchaser shall purchase all of the
Shares of Common Stock owned by each Selling Stockholder at the Offer Price.
Pursuant to the Stockholder Purchase Agreement, the Purchaser will also purchase
335,635 shares of the Series A Preferred Stock of the Company owned by Catharine
Rolph, a daughter of Cecil Heftel, at a price of $1.00 per share plus accrued
but unpaid dividends. Pursuant to the Stockholder Purchase Agreement, each
Selling Stockholder consents to the treatment as set forth in the Tender Offer
Agreement with respect to each Convertible Security held by such Selling
Stockholder. The closing of the purchase and sale pursuant to the Stockholder
Purchase Agreement will occur on the first business day after the satisfaction
or waiver of the conditions specified in the following two paragraphs (the
"closing date").
Conditions to Consummation by Certain Stockholders. Pursuant to the
Stockholder Purchase Agreement, the obligations of Cecil Heftel and Carl Parmer
to consummate the Stockholder Purchase Agreement are subject to the
satisfaction, at or before the closing date of the Stockholder Purchase
Agreement of each of the following conditions: (i) the amounts provided for in
the Agreements Not to Compete entered into between the Company and Mr. Heftel
and Mr. Parmer shall have been paid; and (ii) the amounts as set forth in the
Settlement Agreements between the Company and Mr. Heftel and Mr. Parmer shall
have been paid.
Conditions to Consummation by Purchaser. Pursuant to the Stockholder
Purchase Agreement, the obligations of the Purchaser to consummate the
Stockholder Purchase Agreement are subject to the satisfaction, at or before the
closing date of the Stockholder Purchase Agreement, of each of the following
conditions: (i) the expiration or termination of the applicable waiting period
under the HSR Act; (ii) the FCC Consent becoming a Final Order (as defined in
the Tender Offer Agreement); provided, however, that if the primary lenders for
the Purchaser do not require that the FCC Consent become a Final Order to
consummate the closing of the Stockholder Purchase Agreement, then the granting
of the FCC Consent and the giving of public notice of such fact (in the event
that at the closing of the Stockholder Purchase Agreement, the application for
renewal of the license for WAMR-FM, Miami, Florida remains pending or has not
become a Final Order (as defined in the Tender Offer Agreement), the closing of
the Stockholder Purchase Agreement shall occur); (iii) no temporary restraining
order, preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a government, regulatory or
administrative agency or commission shall be in effect which restrains or
prohibits the transactions contemplated in the Stockholder Purchase Agreement;
and (iv) that all representations and warranties of the Selling Stockholders
contained in the Stockholder Purchase Agreement shall be true and correct in all
material respects at and as of the closing date of the Stockholder Purchase
Agreement (except those representations and warranties which address matters
only as of a particular date shall remain true and correct in all material
respects as of such date) and the Selling Stockholders shall have performed in
all material respects all agreements and covenants required by the Stockholder
Purchase Agreement prior to or at the closing date of the Stockholder Purchase
Agreement.
Covenants. The Stockholder Purchase Agreement contains specific covenants
as to certain impermissible activities of each Selling Stockholder prior to the
termination of the Stockholder Purchase Agreement, which provide that each
Selling Stockholder will not: (i) sell, transfer, pledge, assign or otherwise
dispose of, or tender or agree to tender into any tender offer with respect to,
or enter into any contract, option or other arrangement with respect to the
sale, transfer, pledge, assignment or other disposition of such Selling
Stockholder's Shares to any person other than the Purchaser or the Purchaser's
designee; (ii) acquire any additional shares of Common Stock without the prior
consent of the Purchaser; (iii) deposit any Shares into a voting trust or grant
a proxy or enter into a voting agreement with respect to any Shares; (iv) hold
discussions with any person other than the Purchaser and its affiliates with
respect to any offer or potential offer for the Shares other than the Offer; or
(v) solicit, encourage or take any other action to facilitate (including by way
of furnishing information) any inquiries or proposals for any merger or
consolidation involving the Company, the acquisition of any shares of Common
Stock or the acquisition of all or substantially all of the assets of the
Company by any person other than the Purchaser or its sole stockholder.
The Stockholder Purchase Agreement obligates each Selling Stockholder to
notify the Purchaser promptly and to provide all details requested by the
Purchaser if such Selling Stockholder is approached or solicited, directly or
indirectly, by any person with respect to any of the above-referenced
impermissible
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<PAGE> 26
activities and to vote its Shares against any action or agreement which would
result in a breach of any representation, warranty or covenant of the Company as
set forth in the Tender Offer Agreement or which, in the sole judgment of the
Purchaser, would impede, interfere with or attempt to discourage the Offer,
unless the Stockholder Purchase Agreement has terminated.
Termination. The Stockholder Purchase Agreement may be terminated by
written notice given to the other party, at any time prior to the closing date
of the Stockholder Purchase Agreement: (i) by the mutual written consent of the
Purchaser and each Selling Stockholder; (ii) by any Selling Stockholder as to
that Selling Stockholder's individual obligations if the Company is able to
terminate the Tender Offer Agreement pursuant to any of clauses (ii), (iii),
(iv), (vi), and (vii) of the subsection entitled "Termination" in the summary of
the Tender Offer Agreement; and (iii) by the Purchaser if the Purchaser has
terminated the Tender Offer Agreement pursuant to any of clauses (ii), (iii),
(iv), (vi), and (vii) of the subsection entitled "Termination" in the summary of
the Tender Offer Agreement.
Indemnification. Pursuant to the Stockholder Purchase Agreement, the
Purchaser shall indemnify each Selling Stockholder (the "Indemnified Party")
against all losses, claims, damages, costs, expenses, liabilities or judgments
or amounts that are paid in settlement with the approval of Purchaser arising
out of or related to any claim, action, suit, proceeding or investigation based
in whole or in part on or arising in whole or in part out of the Stockholder
Purchase Agreement or the Tender Offer Agreement or the transactions
contemplated therein; provided, however, that no indemnity shall be available to
the extent a court of competent jurisdiction finally determines that the claim
for indemnity is caused by the Indemnified Party knowingly or intentionally
misrepresenting that it may enter into the Stockholder Purchase Agreement.
Fees and Expenses. All costs and expenses incurred in connection with the
Stockholder Purchase Agreement and the transactions contemplated therein shall
be paid by the party incurring such expenses.
THE SETTLEMENT AGREEMENTS. In December 1993, the Company entered into
ten-year Employment Agreements with Cecil Heftel and Carl Parmer under which
each of them is entitled to receive a base annual salary of $500,000 and bonuses
based on the performance of the Company. Under those Employment Agreements, if
the Company terminates the employment of Mr. Heftel or Mr. Parmer without cause,
he will be entitled to receive a lump sum payment equal to the present value of
all amounts remaining to be paid by the Company to him under his Employment
Agreement. For purposes of calculating future bonuses, the Company will be
deemed to have achieved the performance level necessary to pay the maximum
bonus. The Purchaser has informed Mr. Heftel and Mr. Parmer that it intends to
cause the Company to terminate their employment, without cause, immediately
following the closing of the Stockholder Purchase Agreement.
Concurrently with the execution of the Stockholder Purchase Agreement, Mr.
Heftel and Mr. Parmer each entered into a Settlement Agreement with the Company.
Pursuant to the respective Settlement Agreements, the employment by the Company
of Mr. Heftel and Mr. Parmer will terminate immediately following the purchase
of Shares pursuant to the Stockholder Purchase Agreement and the Company will
pay Mr. Heftel $11,861,069 and Mr. Parmer $6,941,960 in exchange for releases by
Mr. Heftel and Mr. Parmer from any claims resulting from termination of their
Employment Agreements with the Company. The Purchaser has guaranteed the
obligations of the Company under the Settlement Agreements.
The total amount to be paid to each of Mr. Heftel and Mr. Parmer under his
respective Settlement Agreement and Agreement Not to Compete (described below)
does not exceed the present value of all amounts remaining to be paid to him by
the Company under his respective Employment Agreement.
THE AGREEMENTS NOT TO COMPETE. Concurrently with the execution of the
Stockholder Purchase Agreement, Cecil Heftel and Carl Parmer entered into
Agreements Not to Compete with the Company. Pursuant to these agreements,
Messrs. Heftel and Parmer each agreed, for a period of five years commencing on
the closing date of the Stockholder Purchase Agreement, without the prior
written consent of the Company, not to directly or indirectly own (except that
such person may own securities which constitute not more than 5% of a publicly
traded company's issued and outstanding capital stock), work for, act as
consultant or advisor to, manage, operate or control or participate in the
ownership, management, operation or control of any radio station which
broadcasts predominately in Spanish in the markets as set forth in the
Agreements
24
<PAGE> 27
Not to Compete. In consideration of their respective agreements not to compete,
the Company agreed to pay Mr. Heftel $2,500,000 and Mr. Parmer $4,500,000 on the
closing date of the Stockholder Purchase Agreement. The Purchaser has guaranteed
the obligations of the Company under the Agreements Not to Compete.
13. DIVIDENDS AND DISTRIBUTIONS
If on or after the date of the Tender Offer Agreement, the Company should
(i) split, combine or otherwise change the Shares or its capitalization, (ii)
issue or sell any additional securities of the Company or otherwise cause an
increase in the number of outstanding securities of the Company (except for
Shares issuable upon the exercise of employee stock options or warrants
outstanding on the date of the Tender Offer Agreement) or (iii) acquire
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares, then, without prejudice to the Purchaser's rights under
Sections 1 and 14, the Purchaser in its sole discretion, subject to the terms of
the Tender Offer Agreement, may make such adjustments as it deems appropriate in
the Offer Price and other terms of the Offer.
If, on or after the date of the Tender Offer Agreement, the Company should
declare or pay any dividend on the Shares or make any distribution (including,
without limitation, cash dividends, the issuance of additional Shares pursuant
to a stock dividend or stock split, the issuance of other securities or the
issuance of rights for the purchase of any securities) with respect to the
Shares that is payable or distributable to stockholders of record on a date
prior to the transfer to the name of the Purchaser or its nominee or transferee
on the Company's stock transfer records of the Shares purchased pursuant to the
Offer, then, without prejudice to the Purchaser's rights under Sections 1 and
14, any such dividend, distribution or right to be received by the tendering
stockholders will be received and held by the tendering stockholder and tendered
to the Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, the Purchaser will be entitled to all rights and privileges as owner of any
such dividend, distribution or right and may withhold the entire Offer Price or
deduct from the Offer Price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser will not
be required to accept for payment or pay for tendered Shares unless and until
the following conditions shall have been satisfied or waived:
(i) the waiting period under the HSR Act with respect to the purchase
of the Shares shall have expired or terminated;
(ii) the FCC Consent shall have been obtained and become a Final
Order; provided, however, if the primary lenders for the Purchaser do not
require that the FCC Consent become a Final Order in order to consummate
the Offer, then this condition shall be deemed satisfied if the FCC shall
have granted the FCC Consent and shall have given public notice of the
grant of the FCC Consent;
(iii) no temporary restraining order, preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a government, regulatory or administrative agency shall
be in effect which restrains or prohibits the Offer or the transactions
contemplated by the Tender Offer Agreement; and
(iv) all the representations and warranties of the Company contained
in the Tender Offer Agreement shall be true and correct in all material
respects at and as of the Closing Date under the Tender Offer Agreement,
except those representations and warranties which address matters only as
of a particular date shall be true and correct in all material respects as
of such date, and the Company shall have performed in all material respects
all agreements and covenants required to be performed by it prior to or at
such Closing Date.
25
<PAGE> 28
If any of the foregoing conditions shall not have been satisfied prior to
acceptance for payment of any tendered Shares, the Purchaser may (subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act relating to the obligation of the Purchaser to pay for or
return tendered Shares promptly after the termination or withdrawal of the
Offer) postpone the acceptance for payment of, or payment for, Shares or,
subject to the terms of the Tender Offer Agreement, terminate or amend the
Offer.
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to any
such condition or may be waived by the Purchaser in whole or in part at any time
and from time to time in its sole discretion. The failure by the Purchaser at
any time to exercise any of the foregoing rights will not be deemed a waiver of
any such right, the waiver of any such right with respect to particular facts
and circumstances will not be deemed a waiver with respect to any other facts
and circumstances and each such right will be deemed an ongoing right that may
be asserted at any time and from time to time.
15. CERTAIN REGULATORY AND LEGAL MATTERS
Based on a review of publicly available filings made by the Company with
the Commission and other publicly available information concerning the Company,
neither the Purchaser nor Parent is aware of any license or regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action,
except as otherwise described in this Section 15, by any governmental entity
that would be required for the acquisition or ownership of Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser and Parent currently contemplate that such approval or
other action will be sought. While, except as otherwise expressly described in
this Section 15, the Purchaser does not presently intend to delay the acceptance
for payment of or payment for Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of if
such approvals were not obtained or such other actions were not taken.
FCC. The domestic broadcasting industry is subject to extensive federal
regulation which, among other things, requires the prior approval of the FCC for
the issuance, renewal, or assignment of broadcast station licenses and for the
transfer of control of a company which holds such licenses directly or
indirectly. The Company is subject to the Communications Act of 1934, as
amended, which prohibits the transfer of control of a company holding any
license issued by the FCC, or the assignment of such license, without prior FCC
approval. The Communications Act of 1934 requires that the FCC find that the
proposed transfer or assignment would serve the public interest, convenience and
necessity.
In order to consummate the Offer, prior FCC approval will be required.
Pursuant to the Tender Offer Agreement, on or around June 7, 1996 the parties
thereto filed with the FCC the FCC Applications for the FCC Consent. See "Tender
Offer Agreement -- FCC Approval" herein. There can be no assurance that the FCC
Consent will be granted, or if granted, that such approval will be on terms and
conditions acceptable to Purchaser and Parent.
Interested parties may file petitions to deny approval of the FCC
Applications within 30 days after the date of the FCC's public notice announcing
the acceptance for filing of such applications, and the FCC may not grant the
FCC Applications prior to the completion of this 30-day public notice period.
Interested parties may file informal objections to the FCC Applications at any
time prior to FCC action thereon. The parties to the FCC Applications may file
an opposition to any petitions to deny or informal objections filed against the
FCC Applications. The parties to the Tender Offer Agreement have agreed to
prosecute the FCC Applications with all reasonable diligence and otherwise use
commercially reasonable efforts to obtain the FCC Consent as expeditiously as
practicable. In recent years, the FCC has generally reached decisions regarding
uncontested applications for transfer of control over broadcast licensees within
several weeks of the
26
<PAGE> 29
expiration of the 30-day public notice period, and in contested cases, within
one year of the FCC filing. There can be no assurance, however, that the FCC
will reach a decision on the FCC Applications within such time period.
FCC staff members regularly review applications, and their decisions are
subject to reconsideration and to review by the full FCC. Petitions for
reconsideration and applications for review must be filed within 30 days after
public notice of the staff action at issue. In addition, the FCC may on its own
motion review staff actions. The FCC has 40 days after public notice of such
actions to begin such review.
If the full FCC, rather than the staff, grants the FCC Applications,
interested parties may file petitions for reconsideration of such orders
granting approval. As to each such application, petitions for reconsideration
must be filed within 30 days after the date on which the FCC releases public
notices of its approval orders. The filing of such a petition would not stay the
FCC's approval automatically, although a stay can be sought from the FCC or from
a court. In addition, the FCC may reconsider its approval orders within 30 days
of the public notice even if no such petitions are filed. Interested parties may
also seek judicial review of the FCC's decision, a request for which must also
be filed within 30 days after the date on which the FCC releases public notice
of the Final Order either approving or disapproving the FCC Applications or its
order disposing of any petitions for reconsideration of the FCC's initial
decision.
The Telecommunications Act of 1996, which amends major provisions of the
Communications Act of 1934, was enacted on February 8, 1996. Although the
Telecommunications Act of 1996 creates significant new opportunities for
broadcasting companies, it also creates uncertainties as to how the FCC and the
courts will enforce and interpret such act and how the broadcasting industry
will react to the changes made by the act. Moreover, other governmental
regulations and policies pertaining to the broadcasting industry may change over
time, and there can be no assurance that such changes would not have a material
adverse impact upon the business of the Company, Purchaser or Parent.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares under the Offer may be consummated following the expiration
of a 15-calendar day waiting period following the filing by Parent of a
Notification and Report Form with respect to the Offer, unless Parent receives a
request for additional information or documentary material from the Antitrust
Division of the Department of Justice (the "Antitrust Division") or the Federal
Trade Commission (the "FTC") or unless early termination of the waiting period
is granted. Parent has made such filing. If, within the initial 15-day waiting
period, either the Antitrust Division or the FTC requests additional information
or material from Parent concerning the Offer, the waiting period will be
extended and would expire at 11:59 p.m., New York City time, on the tenth
calendar day after the date of substantial compliance by Parent with such
request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or the
FTC raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental
agencies concerning possible means of addressing those issues and may agree to
delay consummation of the transaction while such negotiations continue.
The provisions of the HSR Act would similarly apply to any purchase of
Shares subject to the Stockholder Purchase Agreement pursuant to the Stockholder
Purchase Agreement, except that the initial waiting period would expire 30 days
following the filing of Notification and Report Forms under the HSR Act by
Parent and the Company, and a request for additional information or material
from Parent or the Company during the initial 30-day waiting period would extend
the waiting period until 11:59 p.m. New York City time on the 20th day after the
date of substantial compliance by Parent and the Company with such request.
Parent and the Company have filed Notification and Report Forms under the HSR
Act with respect to the Stockholder Purchase Agreement.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer or the Stockholder Purchase Agreement, the Antitrust
27
<PAGE> 30
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or the Stockholder Purchase Agreement
or seeking the divestiture of Shares acquired by the Purchaser or the
divestiture of substantial assets of Parent or its subsidiaries, or the Company
or its subsidiaries. Private parties may also bring legal action under the
antitrust laws under certain circumstances. There can be no assurance that a
challenge to the Offer or the Stockholder Purchase Agreement on antitrust
grounds will not be made or, if such a challenge is made, of the results
thereof.
Section 203 of the DGCL. Section 203 of the Delaware General Corporation
Law (the "DGCL"), in general, prohibits a Delaware corporation such as the
Company from engaging in a "Business Combination" (as defined in the statute)
with an "Interested Stockholder" (defined below) for a period of three years
following the date that such person became an Interested Stockholder unless,
among other things, prior to the time such person became an Interested
Stockholder, the board of directors of the corporation approved either the
Business Combination or the transaction that resulted in the stockholder
becoming an Interested Stockholder. In general, an "Interested Stockholder" is
defined as any person or entity that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock. Prior to Parent's entering into the May
1995 Transactions, the board of directors of the Company approved such
transactions for purposes of Section 203 of the DGCL, and prior to the
Purchaser's entering into the Stockholder Purchase Agreement and Tender Offer
Agreement, the board of directors of the Company approved the Stockholder
Purchase Agreement and Tender Offer Agreement and the transactions contemplated
thereby for purposes of Section 203 of the DGCL.
State Takeover Laws. A number of states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In Edgar v. MITE Corp., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover Statute, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
held that the State of Indiana may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
presenting stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the state and were incorporated there.
Based on information supplied by the Company, the Purchaser does not
believe that any state takeover statutes apply to the Offer. Neither the
Purchaser nor Parent has currently complied with any state takeover statute or
regulation. The Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Offer, and nothing in
this Offer to Purchase or any action taken in connection with the Offer is
intended as a waiver of such right. If it is asserted that any state takeover
statute is applicable to the Offer and an appropriate court does not determine
that it is inapplicable or invalid as applied to the Offer, the Purchaser might
be required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer. In such case, the Purchaser may not be obliged to accept
for payment or pay for any Shares tendered pursuant to the Offer.
16. FEES AND EXPENSES
Neither the Purchaser, nor Parent, nor any officer, director, stockholder,
agent or other representative thereof, will pay any fees or commissions to any
broker, dealer or other person (other than the Dealer Manager, the Depositary
and the Information Agent) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Purchaser for customary mailing and
handling expenses incurred by them in forwarding materials to their customers.
28
<PAGE> 31
Purchaser has retained CS First Boston Corporation to act as Dealer Manager
in connection with the Offer and has agreed to pay a customary fee for its
services and reimburse CS First Boston Corporation for its out-of-pocket
expenses, including fees and expenses of its counsel. Additionally, Purchaser
has retained Morrow & Co., Inc., as Information Agent, and The Bank of New York,
as Depositary, in connection with the Offer. The Information Agent and the
Depositary will receive reasonable and customary compensation for their services
hereunder and reimbursement for their reasonable out-of-pocket expenses. The
Dealer Manager, Depositary and the Information Agent will also be indemnified by
the Purchaser against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws.
17. MISCELLANEOUS
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
No persons have been authorized to give any information or make any
representation on behalf of the Purchaser or Parent other than as contained in
this Offer to Purchase or in the Letter of Transmittal, and, if any such
information or representation is given or made, it should not be relied upon as
having been authorized by the Purchaser or Parent.
The Purchaser has filed with the Commission a Statement on Schedule
14D-1/13D, pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer. Such Schedule and any
amendments thereto, including exhibits, may be examined and copies may be
obtained at the same places and in the same manner as set forth in Section 9
(except that they will not be available at the regional offices of the
Commission).
CLEAR CHANNEL RADIO, INC.
29
<PAGE> 32
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER
The name, position with Parent and the Purchaser, present principal
occupation and five-year employment history of each of the directors, executive
officers and key employees of Parent and the Purchaser are set forth below. Each
person listed below is a citizen of the United States.
<TABLE>
<CAPTION>
POSITION WITH PARENT PRESENT PRINCIPAL
NAME AGE AND/OR THE PURCHASER OCCUPATION OR EMPLOYMENT(1)
- --------------------------- --- ------------------------------ ------------------------------
<S> <C> <C> <C>
L. Lowry Mays.............. 60 President and Chief Executive President and Chief Executive
400 Geneseo Road Officer of Parent; Director Officer of Parent; Director
San Antonio, Texas 78209 of Parent; Chief Executive of Parent; Chief Executive
Officer and President of Officer and President of
Purchaser; Chairman of the Purchaser; Chairman of the
Board of Purchaser Board of Purchaser
Alan D. Feld(2)............ 59 Director of Parent Partner of the law firm Akin,
1700 Pacific Ave., Gump, Strauss, Hauer & Feld,
Suite 4100, Dallas, L.L.P.
Texas 75201-4675
B. J. McCombs.............. 68 Director of Parent; Director Private Investor
825 Contour of Purchaser
San Antonio, Texas 78212
Theodore H. Strauss(3)..... 71 Director of Parent Senior Managing Director
5100 Park Lane Bear, Stearns & Co., Inc.
Dallas, Texas 75220
John H. Williams(4)........ 62 Director of Parent; Director Senior Vice President
7810 Glen Albens Circle of Purchaser Everen Securities, Inc.
Dallas, Texas 75225
Mark P. Mays............... 32 Senior Vice Senior Vice
200 Concord Plaza President/Operations of President/Operations of
Suite 600 Parent; Senior Vice Parent; Senior Vice
San Antonio, Texas 78216 President/Operations of President/Operations of
Purchaser Purchaser
Randall T. Mays............ 30 Vice President/Treasurer of Vice President/Treasurer of
200 Concord Plaza Parent; Vice President/ Parent; Vice President/
Suite 600 Treasurer of Purchaser Treasurer of Purchaser
San Antonio, Texas 78216
Herbert W. Hill, Jr........ 36 Vice President/Controller of Vice President/Controller of
200 Concord Plaza Parent; Vice President/ Parent; Vice President/
Suite 600 Controller of Purchaser Controller of Purchaser
San Antonio, Texas 78216
Kenneth E. Wyker........... 34 Vice President/Legal Affairs Vice President/Legal Affairs
200 Concord Plaza of Parent; Secretary of of Parent; Secretary of
Suite 600 Parent; Vice President/Legal Parent; Vice President/Legal
San Antonio, Texas 78216 Affairs of Purchaser; Affairs of Purchaser;
Secretary of Purchaser Secretary of Purchaser
Dave Ross.................. 45 Vice President and General Vice President and General
1975 E. Sunrise Blvd. Manager of WHYI-FM and Manager of WHYI-FM and
Ft. Lauderdale, Florida WBGG-FM WBGG-FM
33304
</TABLE>
<PAGE> 33
<TABLE>
<CAPTION>
POSITION WITH PARENT PRESENT PRINCIPAL
NAME AGE AND/OR THE PURCHASER OCCUPATION OR EMPLOYMENT(1)
- --------------------------- --- ------------------------------ ------------------------------
<S> <C> <C> <C>
William R. Riordan......... 39 Executive Vice President and Executive Vice President and
1701 Broadway Street NE Chief Operating Officer of Chief Operating Officer of
Minneapolis, Minnesota Clear Channel Television, Clear Channel Television,
55413 Inc. Inc.
Josh McGraw................ 45 Vice President and General Vice President and General
8675 Hogan Road Manager of WAWS-TV Manager of WAWS-TV
Jacksonville, Florida 32216
Jack Peck.................. 39 Vice President and General Vice President and General
2701 Union Ave. Manager of WPTY-TV Manager of WPTY-TV
Memphis, Tennessee 38104
James Stanley Webb......... 52 Senior Vice Senior Vice
c/o KPEZ FM President/Operations of President/Operations of
811 Barton Springs Drive Purchaser Purchaser
Suite 697
Austin, Texas 78704
</TABLE>
- ---------------
(1) Except as noted below, all of the persons listed have served in the
positions or similar positions with such entities for at least five years.
(a) Mr. Mark P. Mays has been Senior Vice President of Operations of Parent
since 1993. Prior thereto he was Vice President and Treasurer of the
Parent for the remainder of the relevant five year period.
(b) Mr. Randall Mays, prior to his election as an officer in 1993, was an
associate at Goldman, Sachs & Co. Prior thereto he was a graduate
student at Harvard University for the remainder of the relevant
five-year period.
(c) Mr. Kenneth Wyker, prior to his election as an officer in 1993, was
Corporate Counsel at Greater Media for the remainder of the relevant
five year period.
(d) Mr. Dave Ross, prior to his election as an officer of the Parent in
1994, was Executive Vice President and General Manager of WHYI-FM under
Metroplex Communications, Inc. for the remainder of the relevant
five-year period.
(e) Mr. William R. Riordan has been an officer of the Parent for the
relevant five-year period. Mr. Riordan served as General Manager of
KSAS-TV from 1990 to 1993, as General Manager of WFTC-TV from 1993 to
1995, and is currently Executive Vice President and Chief Operating
Officer of Clear Channel Television, Inc.
(f) Mr. Josh McGraw, prior to his election as an officer of the Parent in
1991, was employed as the Vice President and General Manager of WPXC-TV
in Portland, Maine.
(g) Mr. Jack Peck, prior to his election as an officer of the Parent in
1992, was employed as General Sales Manager for WPTY-TV.
(2) Mr. Alan D. Feld is a director of Centerpoint Properties, Inc.
(3) Mr. Theodore H. Strauss is a director of Sport Supply Group, Inc., Sizeler
Property, Inc. and Hollywood Casino Corporation.
(4) Mr. John H. Williams is a director of GAINSCO, Inc.
<PAGE> 34
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Hand or Overnight Courier: Facsimile for Eligible
Tender and Exchange Department Tender and Exchange Department Institutions:
P. O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window (212) 815-6213
New York, New York 10286-1248 New York, New York 10286 Information Telephone:
(800) 507-9357
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage Firms, please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Call Toll-Free (800) 881-8320
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS A AND CLASS B COMMON STOCK
OF
HEFTEL BROADCASTING CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JUNE 7, 1996
BY
CLEAR CHANNEL RADIO, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CLEAR CHANNEL COMMUNICATIONS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY,
JULY 16, 1996, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender and Exchange Department (for Eligible Institutions Only) Tender and Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 For Information Telephone: New York, New York 10286
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE
A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE
SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Heftel
Broadcasting Corporation if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined in Instruction 2 hereto) is utilized, if delivery
of Shares (as defined below) is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), or who
cannot comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares pursuant to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
<PAGE> 2
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Owner(s)
(Please Fill in, if Blank, Exactly as Name(s) Shares Tendered
Appear(s) on Certificate(s) (Attach Additional List if Necessary)
- ---------------------------------------------------------------------------------------------------------
Total Number
of Shares Number
Certificate Represented by of Shares
Number(s)(1) Certificate(s)(1) Tendered(2)
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares being delivered to the Depositary are
being tendered. See Instruction 4.
</TABLE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-----------------------------------------------------------------------------
Check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No.:
- --------------------------------------------------------------------------------
Transaction Code No.:
- --------------------------------------------------------------------------------
<PAGE> 3
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
---------------------------------------------------------------------
If delivered by book-entry transfer, check box of Book-Entry Transfer
Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No.:
- --------------------------------------------------------------------------------
Transaction Code No.:
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to Clear Channel Radio, Inc. ("Purchaser"), a
corporation organized and existing under the laws of the State of Nevada and an
indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas
corporation ("Parent"), the above-described shares of Class A Common Stock,
$.001 per share (the "Class A Common Stock"), and Class B Common Stock, par
value $.001 per share (the "Class B Common Stock" and together with the Class A
Common Stock, the "Shares"), of Heftel Broadcasting Corporation, a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
pursuant to the Purchaser's offer to purchase all outstanding Shares at a
purchase price of $23.00 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 7, 1996 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in the Letter of Transmittal (which together with the Offer to
Purchase constitute the "Offer"). The undersigned understands that the Purchaser
reserves the right to transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, receipt of which is hereby
acknowledged.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns and transfers to
or upon the order of the Purchaser all right, title and interest in and to all
the Shares that are being tendered hereby and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest), to (a) deliver certificates
for such Shares, or transfer ownership of such Shares, on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of the Purchaser, (b) present such Shares for cancellation or transfer
on the books of the Company and (c) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares, all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints Mark P. Mays and Kenneth E.
Wyker and each of them, the attorneys-in-fact and proxies of the undersigned,
each with full power of substitution, to exercise all voting and other rights of
the undersigned in respect of any annual, special or adjourned meeting of the
Company's stockholders, or otherwise, in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper, with respect to all Shares tendered by the undersigned and accepted for
payment by the Purchaser and with respect to any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
June 1, 1996. All such proxies shall be considered coupled with an interest in
the tendered Shares. Such appointment will be effective when, and only to the
extent that, the Purchaser accepts for payment Shares tendered by the
undersigned as provided herein. Upon such acceptance for payment, all prior
powers of attorney and proxies given by the undersigned with respect to such
Shares or other securities or rights will, without further action, be revoked,
and no subsequent powers of attorney and proxies may be given (and, if given,
will not be deemed effective).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject to any adverse
claims. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Purchaser to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, the Purchaser may not be required to accept for payment any of the
Shares tendered hereby. Without limiting the foregoing, if the price to be paid
in the Offer is amended in accordance with the Offer, the price to be paid to
the undersigned will be the amended price notwithstanding the fact that a
different price is stated in this Letter of Transmittal.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned (and, in
the case of Shares tendered by book-entry transfer, by credit to the account at
the Book-Entry Transfer Facility designated above). Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any Shares purchased and return any certificates for Shares
not tendered or not purchased (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 10.
Number of Shares represented by the lost or destroyed certificates:
-----------------------
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned, or if Shares tendered
by book-entry transfer that are not purchased are to be returned by credit to an
account at one of the Book-Entry Transfer Facilities.
Issue: / / Check
/ / Shares
(Check as applicable)
Name:
- ------------------------------------------------------
(Please Print)
Address:
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
(Zip Code)
- ------------------------------------------------------
(Taxpayer Identification or Social Security Number)
(See Substitute Form W-9)
Credit unpurchased Shares tendered by book-entry transfer to the account set
forth below:
Name of Account Party:
- ---------------------------
Account No.:
- ------------------------------------ at
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
(check one)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
mailed to someone other than the undersigned or to the undersigned at an address
other than that shown below the undersigned's signature(s).
Mail: / / Check
/ / Shares
(Check as applicable)
Name:
- ------------------------------------------------------
(Please Print)
Address:
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
(Zip Code)
- ------------------------------------------------------
(Taxpayer Identification or Social Security Number)
(See Substitute Form W-9)
<PAGE> 6
SIGN HERE
(Also Complete Substitute Form W-9 Below)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Stockholder(s))
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:
- --------------------------------------------------------------------------------
Dated:
- ---------------------- , 1996.
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature:
- --------------------------------------------------------------------------------
Name and Title:
- --------------------------------------------------------------------------------
(Please Print)
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Dated:
- ---------------------- , 1996
<PAGE> 7
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<C> <S> <C>
- --------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN Social Security
SUBSTITUTE THE BOX AT RIGHT AND CERTIFY BY SIGN- Number:________________
FORM W-9 ING AND DATING BELOW
or
Employer Identification
Number:________________
---------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2 -- CERTIFICATION PART 3 --
INTERNAL REVENUE SERVICE
Under penalties of perjury, I certify Awaiting TIN
PAYER'S REQUEST FOR TAXPAYER that:
IDENTIFICATION / /
NUMBER ("TIN") (1) the Number shown on this form is
my correct TIN (or I am waiting for a -----------------------
number to be issued to me); and
PART 4 --
(2) I am not subject to backup
withholding either because I have not Exempt TIN
been notified by the Internal Revenue
Service (IRS) that I am subject to / /
backup withholding as a result of a
failure to report all interest or
dividends, or the IRS has notified me
that I am no longer subject to backup
withholding.
---------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS: You must cross out Item (2) in Part 2
above if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding, you received another
notification from the IRS that you were no longer subject to backup
withholding, do not cross out Item (2). (Also see instructions in
the enclosed Guidelines).
Signature: _____________________________________Date: ______________
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate IRS Center or
Social Security Administration Office or (b) I intend to mail or deliver an
application in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable payments
pursuant to the Offer made to me will be withheld but will be refunded if I
provide a certified taxpayer identification number within 60 days.
Signature: __________________________________________Date: ____________________
Name:__________________________________________________________________________
(Please print)
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this instruction, includes any
participant in one of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a member or
participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5. If the certificates for Shares are registered in
the name of a person other than the signer of this Letter of Transmittal, or if
payment is to be made or certificates for Shares not tendered or not accepted
for payment are to be returned to a person other than the registered owner(s) of
the certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed as aforesaid. See
Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if delivery of Shares is to be
made pursuant to the procedures for book-entry transfer set forth in Section 3
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required documents, must
be received by the Depositary at one of its addresses set forth herein on or
prior to the Expiration Date and either certificates for tendered Shares must be
received by the Depositary at one of such addresses or Shares must be delivered
pursuant to the procedures for book-entry transfer set forth herein (and a
Book-Entry Confirmation received by the Depositary), in each case on or prior to
the Expiration Date, or (b) the tendered stockholder must comply with the
guaranteed delivery procedure set forth below and in Section 3 of the Offer to
Purchase.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available but are not
lost or the procedure for book-entry transfer cannot be completed prior to the
Expiration Date or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder may tender such Shares
by properly completing and duly executing the Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by
or through an Eligible Institution, (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the
Purchaser, must be received by the Depositary on or prior to the Expiration Date
and (c) the certificates for all tendered Shares, in proper form for transfer
(or a Book-Entry Confirmation with respect to all such Shares), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents are
received by the Depositary within three trading days after the date of execution
of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer
to Purchase. A "trading day" is any day on which The Nasdaq National Market is
open for business. The Notice of Guaranteed Delivery may be delivered by hand to
the Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY
<PAGE> 9
BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares which are to
be tendered in the box entitled "Number of Shares Tendered." In such case, new
certificate(s) for the remainder of the Shares represented by the old
certificate(s) will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificate must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of the authority of such person so to act must be submitted.
6. TRANSFER TAXES. The Purchaser will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person(s) other than the registered holder(s), or if tendered certificates are
registered in the name(s) of any person(s) other than the person(s) signing this
Letter of Transmittal, then the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person(s) or otherwise) payable
on account of the transfer to such person(s) will be deducted from the purchase
price unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase
price of any Shares purchased is to be issued, and/or any Shares not tendered or
not purchased are to be returned, in the name of a person other than the
person(s) signing this Letter of Transmittal or if the check or any certificates
for Shares not tendered or not purchased are to be mailed to someone other than
the person(s) signing this Letter of Transmittal or to the person(s)
<PAGE> 10
signing this Letter of Transmittal at an address other than that shown above,
the appropriate boxes on this Letter of Transmittal should be completed. Any
Shares tendered by book-entry transfer that are not purchased will be returned
by crediting the account at the Book-Entry Transfer Facilities designated above.
8. SUBSTITUTE FORM W-9. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 in this Letter of Transmittal and certify under penalties of
perjury that such TIN is correct and that such stockholder is not subject to
backup withholding. If a stockholder does not provide such stockholder's correct
TIN or fails to provide the certifications described above, the IRS may impose a
$50 penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding. Foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9" for
more instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may be
obtained from the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary by checking the box immediately preceding the special
payment/special delivery instructions and indicating the number of Shares lost,
destroyed or stolen. The stockholder will then be instructed as to the steps
that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY HEREOF
(TOGETHER WITH CERTIFICATES OR IN THE CASE OF BOOK-ENTRY TRANSFER, AN AGENT'S
MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST
BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
THE OFFER TO PURCHASE).
<PAGE> 11
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage Firms, please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Call Toll-Free (800) 881-8320
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF CLASS A AND CLASS B COMMON STOCK
OF
HEFTEL BROADCASTING CORPORATION
TO
CLEAR CHANNEL RADIO, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CLEAR CHANNEL COMMUNICATIONS, INC.
As set forth in Section 3 of the Offer to Purchase dated June 7, 1996 (as
the same may be amended from time to time, the "Offer to Purchase") of Clear
Channel Radio, Inc. ("Purchaser"), a Nevada corporation and an indirect
wholly-owned subsidiary of Clear Channel Communications, Inc., and in the
accompanying Letter of Transmittal (the "Letter of Transmittal") and Instruction
2 thereto, this form or one substantially equivalent hereto must be used to
accept the Purchaser's offer to purchase all shares of the Class A Common Stock,
par value $.001 per share, and the Class B Common Stock, $.001 per share
(collectively, the "Shares") of Heftel Broadcasting Corporation, a Delaware
corporation (the "Company"), at $23.00 per Share, net to the seller in cash
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase and the Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer") if (i)
certificates representing Shares to be tendered for purchase and payment are not
lost but are not immediately available, (ii) time will not permit all required
documents to reach the Depositary prior to the Expiration Date (as defined
below), or (iii) the procedures for book-entry transfer cannot be completed
prior to the Expiration Date. This form may be delivered by an Eligible
Institution (as defined in the Offer to Purchase) by mail or hand delivery or
transmitted, via facsimile, to the Depositary as set forth below. All
capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Offer to Purchase.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996,
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender and Exchange Department (for Eligible Institutions Only) Tender and Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 For Information Telephone: New York, New York 10286
(800) 507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A
VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to the Purchaser upon the terms and subject
to the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer"), receipt of which is hereby acknowledged, the Shares of
the Company set forth below, pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase.
PLEASE COMPLETE AND SIGN
<TABLE>
<S> <C>
Signatures of Registered Owner(s) Date:
or Authorized Signatory: ------------------------------------------
- -----------------------------------------------
- ----------------------------------------------- Address:
- ----------------------------------------------- ---------------------------------------
Name(s) of Registered Owner(s): -----------------------------------------------
- ----------------------------------------------- Area Code and Telephone No.:
- ----------------------------------------------- -------------------
- ----------------------------------------------- If Shares will be delivered by book-entry
Number of Shares Being Tendered Hereby: transfer, check trust company below:
- -----------------------------------------------
- ----------------------------------------------- / / The Depository Trust Company
Certificate No.(s) of Shares (if available): / / Midwest Securities Trust Company
- -----------------------------------------------
- ----------------------------------------------- / / Philadelphia Depository Trust Company
Depository Account No.:
------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby (a) represents that the tender of
Shares effected hereby complies with Rule 14e-4 of the Securities Exchange Act
of 1934, as amended, and (b) guarantees to deliver to the Depositary either the
certificates evidencing all tendered Shares, in proper form for transfer, or to
deliver Shares pursuant to the procedure for book-entry transfer into the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility"), in either case together with the Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery, and any other required documents, all
within three Nasdaq National Market trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm:
---------------------------------- AUTHORIZED SIGNATURE
- ----------------------------------------------- ---------------------------
Address:
---------------------------------------
PLEASE PRINT
- -----------------------------------------------
Name:
- ----------------------------------------------- ------------------------------------------
Zip Code
Title:
-----------------------------------------
Dated:
Area Code and Tel. No.: ---------------------------------- , 1996
------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE; CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A AND CLASS B COMMON STOCK
OF
HEFTEL BROADCASTING CORPORATION
AT
$23.00 NET PER SHARE
BY
CLEAR CHANNEL RADIO, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CLEAR CHANNEL COMMUNICATIONS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996,
UNLESS THIS OFFER IS EXTENDED.
June 7, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Clear Channel Radio, Inc. ("Purchaser"), a Nevada
corporation and an indirect wholly-owned subsidiary of Clear Channel
Communications, Inc., to act as Dealer Manager in connection with the
Purchaser's offer to purchase all shares of Class A Common Stock, $.001 par
value per share ("Class A Common Stock"), and Class B Common Stock, $.001 par
value per share ("Class B Common Stock" and together with the Class A Common
Stock, the "Shares"), at a purchase price of $23.00 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, together constitute the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated June 7, 1996.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal (with
manual signature) may be used to tender Shares.
3. The Notice of Guaranteed Delivery to be used to accept the Offer in the
circumstances described below.
4. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such client's instructions with regard to the
Offer.
5. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
6. A return envelope addressed to The Bank of New York, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS
THE OFFER IS EXTENDED.
<PAGE> 2
Please note the following:
1. The Offer Price is $23.00 per Share, net to the seller in cash without
interest thereon.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Tuesday, July 16, 1996, unless the Offer is extended.
4. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
In all cases, payment for Shares accepted for purchase pursuant to the
Offer will be made only after timely receipt by the Depositary of (a)
certificates for such Shares or timely confirmation of the book-entry transfer
of such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase), pursuant to the procedures set
forth in Section 3 of the Offer to Purchase, (b) the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed with any required
signature guarantees, and (c) any other documents required by the Letter of
Transmittal.
If a stockholder desires to tender Shares pursuant to the Offer, and if (a)
certificates representing the Shares to be tendered for purchase and payment are
not lost but are not immediately available, (b) the procedures for book-entry
transfer cannot be completed prior to the Expiration Date or (c) time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such stockholder may tender Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to brokers, dealers or
other persons (other than the Dealer Manager, Information Agent and Depositary,
as described in the Offer to Purchase) for soliciting tenders of Shares pursuant
to the Offer. The Purchaser will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchaser will pay or cause to be paid
any transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Questions and requests for assistance with respect to the Offer or for
copies of the Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent or Dealer Manager
at the addresses and telephone numbers set forth on the outside back cover page
of the Offer to Purchase.
Very truly yours,
CS First Boston Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF PURCHASER, THE DEPOSITARY, THE INFORMATION AGENT,
THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A AND CLASS B COMMON STOCK
OF
HEFTEL BROADCASTING CORPORATION
AT
$23.00 NET PER SHARE
BY
CLEAR CHANNEL RADIO, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CLEAR CHANNEL COMMUNICATIONS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996,
UNLESS THIS OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated June 7,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to an offer by Clear Channel Radio,
Inc. ("Purchaser"), a Nevada corporation and an indirect wholly-owned subsidiary
of Clear Channel Communications, Inc., to purchase all outstanding shares of the
Class A Common Stock, par value $.001 per share ("Class A Common Stock"), and
the Class B Common Stock, $.001 per share ("Class B Common Stock" and together
with the Class A Common Stock, the "Shares") of Heftel Broadcasting Corporation,
a Delaware corporation (the "Company"), at a purchase price of $23.00 per Share,
net to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. This material is being forwarded to you as
the beneficial owner of Shares carried by us in your account but not registered
in your name.
A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $23.00 per Share, net to you in cash.
2. The Offer is being made for all Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Tuesday, July 16, 1996, unless the Offer is extended.
4. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other terms and conditions.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instructions to us is
enclosed. If
<PAGE> 2
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise indicated in such instruction form. PLEASE FORWARD YOUR INSTRUCTIONS
TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase, dated June 7, 1996, and the related Letter of Transmittal (which
together constitute the "Offer") relating to the Offer by Clear Channel Radio,
Inc., a Nevada corporation and an indirect wholly-owned subsidiary of Clear
Channel Communications, Inc., a Texas corporation, to purchase all shares of the
Class A Common Stock, par value $.001 per share, and the Class B Common Stock,
$.001 par value per share, of Heftel Broadcasting Corporation, a Delaware
corporation (collectively, the "Shares").
You are instructed to tender the number of Shares indicated below (or, if no
number is indicated below, all Shares) that are held by you for the account of
the undersigned, upon the terms and subject to the conditions set forth in the
Offer.
NUMBER OF SHARES TO BE TENDERED: SHARES
----------------------
ACCOUNT NUMBER:
---------------------------------------------
DATED: , 1996
-------------------
SIGN HERE
SIGNATURE(S):
------------------------------------------------------------------
PRINT NAME(S):
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
PRINT ADDRESS(ES):
-------------------------------------------------------------
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NO.:
---------------------------------------------------
TAXPAYER ID NO. OR SOCIAL SECURITY NO.:
----------------------------------------
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN A SIGNED SCHEDULE
ATTACHED HERETO, YOUR SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US
TO TENDER ALL OF YOUR SHARES.
<PAGE> 1
EXHIBIT 99(a)(6)
[Clear
Channel CLEAR CHANNEL
Logo]
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT: RANDALL MAYS (210) 822-2828
CLEAR CHANNEL TO TENDER FOR HEFTEL
San Antonio, Texas, June 2, 1996 . . . Lowry Mays, President and Chief
Executive Officer of Clear Channel Communications, Inc. and Cecil Heftel,
Chairman of Heftel Broadcasting Corporation jointly announced today that Clear
Channel Radio, Inc. has agreed to make a tender offer for all of the shares of
Heftel Broadcasting Corporation, not beneficially owned by Clear Channel, for
$23.00 per share in cash. Concurrently, management of Heftel has agreed to sell
its shares (which represents approximately 40% of the outstanding stock of
Heftel Broadcasting) to Clear Channel at the tender price. The transaction is
subject to the approval of the Federal Communications Commission and the
Federal Trade Commission.
Mr. Mays said, "We are excited to increase our investment in Heftel
Broadcasting and its presence in the fast growing Spanish language broadcasting
sector."
Mr. Heftel said, "I am very optimistic about the future of Heftel
Broadcasting under the leadership of Clear Channel. I am also reassured by
knowing that Clear Channel will carry on the traditions and standards which
have been established in each of the cities that Heftel Broadcasting serves."
Clear Channel is a diversified broadcasting company which currently
owns approximately 21% of Heftel Broadcasting and, including pending
acquisitions, owns and/or operates 96 other radio stations and 17 television
stations in the United States. Clear Channel also has broadcasting operations
in Australia and New Zealand. Its stock is traded on the New York Stock
Exchange under the symbol CCU.
<PAGE> 2
Heftel Broadcasting is a Spanish language broadcasting company
operating ratio stations in New York, Los Angeles, Chicago, Dallas, Miami, and
Las Vegas. Its stock is traded on the NASDAQ under the symbol HBCCA.
Phone (210) 822-2828 o Fax (210) 822-2299
200 Concord Plaza o Suite 600 o San Antonio, TX 78216-6940
<PAGE> 1
EXHIBIT 99(a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Give the
SOCIAL Give the EMPLOYER
For this type of account: SECURITY For this type of account: IDENTIFICATION
number of-- number of--
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate, or Legal entity (Do
2. Two or more individuals (joint The actual owner of pension trust not furnish the
account) the account or, if identification
combined funds, the number of the
first individual on personal
the account(1) representative or
3. Husband and wife (joint The actual owner of trustee unless the
account) the account or, if legal entity itself
joint funds, either is not designated
person(1) in the account
4. Custodian account of a minor The minor(2) title.)(4)
(Uniform Gift to Minors Act) 10. Corporate account The corporation
5. a. The usual revocable savings The 11. Association, club, religious, The organization
trust account (grantor is grantor-trustee(1) charitable, educational
also trustee) organization or other
b. So-called trust account that The actual owner(1) tax-exempt organization ac-
is not a legal or valid count
trust under State law 12. Partnership account The partnership
6. Sole proprietorship account The owner(3) 13. A broker or registered nominee The broker or nomi-
7. Account in the name of guardian The ward, minor or nee
or committee for a designated incompetent 14. Account with the Department of The public entity
ward, minor or incompetent person(5) Agriculture in the name of a
person public entity (such as a State
8. Adult and minor (joint account) The adult or, if or local government, school
the minor is the district, or prison) that
only contributor, receives agricultural program
the minor(1) payments
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)List first and circle the name of the person whose number you furnish.
(2)Circle the minor's name and furnish the minor's social security number.
(3)Show the name of the owner. You may also list the name of the business. You
may use either the social security or employer identification number.
(4)List first and circle the name of the legal trust, estate, or pension trust.
(5)Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
NOTE:If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN") or you don't know
your number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding and information reporting
on MOST payments include the following:
1. A corporation.
2. A financial institution.
3. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
4. The United States or any agency or instrumentality thereof.
5. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
6. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
7. An international organization or any agency or instrumentality thereof.
8. A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
9. A real estate investment trust.
10. A common trust fund operated by a bank under section 584(a).
11. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
12. An entity registered at all times under the Investment Company Act of 1940.
13. A foreign central bank of issue.
14. A futures commission merchant registered with the Commodity Futures Trading
Commission.
15. A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
For interest and dividends, a futures commission merchant registered with the
Commodity Futures Trading Commission is NOT exempt. For broker transactions,
payees listed in items (11) and (15) are NOT exempt. Payments subject to
reporting under sections 6041 and 6041A are exempt only if made to payees listed
in items (1), (3), (4), (5), (6), (7) and (13), except a corporation that
provides medical and health care services or bills and collects payments for
such services. Only payees listed in items (3) through (7) are exempt from
backup withholding for barter exchange transactions, patronage dividends and
payments by certain fishing boat operators.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not provided
your correct TIN to the payer.
- Payments of tax-exempt interest (including exempt interest dividends
under section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments of mortgage interest.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER. Nonresident aliens and foreign entities not
subject to backup withholding should also furnish a completed Form W-8.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6042, 6044, 6045, 6049, 6050A and 6050N.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give TINs to payers who must report the payments
to IRS. TINs also must be given to persons who must report to the IRS on
mortgage interest paid, the acquisition or abandonment of secured property and
contributions to an individual retirement account. IRS uses TINs for
identification purposes and to verify the accuracy of tax returns. Payers must
be given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who has not furnished a TIN to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.-- If you fail
to furnish your correct TIN to a requester, you are subject to a penalty of $50
for each such failure unless your failure is due to reasonable cause and not to
willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.-- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE IRS
<PAGE> 1
Exhibit 99(a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated June
7, 1996, and the related Letter of Transmittal and any amendments or
supplements thereto, and is being made to all holders of Shares.
The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares residing in any
jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction the securities or other laws
of which require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed made on behalf of the
Purchaser by CS First Boston Corporation ("CS First
Boston") or one or more registered brokers
or dealers licensed under the laws
of such jurisdiction
Notice of Offer to Purchase for Cash
All Outstanding Shares of Class A and Class B Common Stock
of
Heftel Broadcasting Corporation
at
$23.00 NET PER SHARE
by
Clear Channel Radio, Inc.
an indirect wholly-owned subsidiary of
Clear Channel Communications, Inc.
Clear Channel Radio, Inc., a corporation organized and existing under the
laws of the State of Nevada (the "Purchaser") and an indirect wholly-owned
subsidiary of Clear Channel Communications, Inc., a Texas corporation
("Parent"), is offering to purchase all outstanding shares (the "Shares") of
Class A Common Stock, par value $.001 per share (the "Class A Common Stock"),
and Class B Common Stock, par value $.001 per share (the "Class B Common Stock"
and together with the Class A Common Stock, the "Common Stock"), of Heftel
Broadcasting Corporation, a corporation organized and existing under the laws
of the State of Delaware (the "Company"), at a price of $23.00 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 7, 1996 (the "Offer
to Purchase"), and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED.
The Offer is not conditioned upon any minimum number of Shares being
tendered, but is subject to certain other conditions, including receipt of
certain consents from the Federal Communications Commission and the expiration
or termination of the waiting period applicable to the Purchaser's acquisition
of Shares under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
The Offer is being made pursuant to a Tender Offer Agreement, dated June
1, 1996, as amended (the "Tender Offer Agreement"), by and between the Purchaser
and the Company pursuant to which the Purchaser has agreed to make the Offer.
The Purchaser has also entered into a Stockholder Purchase Agreement dated June
1, 1996 (the "Stockholder Purchase Agreement") with certain stockholders of the
Company who own in the aggregate 3,516,529 Shares. Subject to the terms and
conditions of the Stockholder Purchase Agreement, the stockholders who are
parties thereto have agreed to sell their Shares to the Purchaser. Such
stockholders also own options and warrants to acquire an aggregate of 1,156,017
Shares and have agreed to tender such Shares pursuant to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND DETERMINED THAT THE OFFER IS IN THE BEST INTERESTS OF THE STOCKHOLDERS OF
THE COMPANY.
Pursuant to the Tender Offer Agreement, the Purchaser has agreed for a
period of one year from and after the closing of the Offer to use its best
efforts to cause the Shares of Class A Common Stock to remain listed or quoted
on a recognized national exchange or National Association of Securities
Dealers, Inc. quotation system.
<PAGE> 2
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to The Bank of New
York (the "Depositary") of the Purchaser's acceptance for payment of such
Shares pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting such payment to tendering stockholders whose shares
have been accepted for payment. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (each, a "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in Section 3 of the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) with all required signature guarantees or,
in the case of a book-entry transfer, a message transmitted by a Book-Entry
Transfer Facility that the participant therein has agreed to be bound by the
terms of the Letter of Transmittal, and (iii) all other documents required by
the Letter of Transmittal. Under no circumstances will interest on the purchase
price for Shares be paid regardless of any delay in making payment or any
extension of the time during which the Offer is open. If any tendered Shares
are not purchased for any reason or if certificates are submitted for more
Shares than are tendered, certificates for such Shares not purchased or
tendered will be returned, without expense to the tendering stockholder (or,
in the case of Shares tendered by book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable following the expiration or termination
of the Offer.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
July 16, 1996, unless the Purchaser, in accordance with the terms of the Offer
and the Tender Offer Agreement, shall have extended the period of time which
the Offer is open, in which event such terms shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire. Pursuant
to the Tender Offer Agreement, if at any time on or prior to July 16, 1996, the
number of Shares tendered pursuant to the Offer when combined with Shares owned
by the Purchaser's affiliates total 80% of the outstanding Common Stock, the
Purchaser shall publish notice of such fact and extend the Expiration Date by
ten days. The Purchaser expressly reserves the right, subject to the terms and
conditions of the Tender Offer Agreement, which requires the consent of the
Company, at any time and from time to time, to extend the period of time during
which the Offer is open, including the occurrence of any conditions specified
in Section 14 of the Offer to Purchase, by giving oral or written notice of
such extension to the Depositary. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and to
the rights of a tendering stockholder to withdraw such stockholder's Shares.
Any such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, except as required by law, the Purchaser shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment pursuant to
the Offer, may also be withdrawn at any time after August 5, 1996. For a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered, if different from that of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered for the account of an Eligible Institution (as defined in the
Offer to Purchase), the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer, any notice of withdrawal must also
specify the name and number of the account at the applicable Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise
comply with such Book-Entry Transfer Facility's procedures. All questions as to
the form and validity (including time of receipt) of notices of withdrawal will
be determined by the Purchaser, in its sole discretion, and its determination
will be final and binding on all parties. None of the Purchaser, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Shares properly withdrawn will be deemed not validly tendered
for purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3 of
the Offer to Purchase.
The information required to be disclosed by Rule 14d-6(e)(1) (vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
and, if required, any other relevant materials will be mailed to record holders
of Shares whose names appear on the Company's stockholder list and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Company's
stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and the other tender offer documents may be directed to the Information Agent
or the Dealer Manager as set forth below, and copies will be furnished promptly
at the Purchaser's expense. No fees or commissions will be paid to brokers,
dealers or other persons (other than the Dealer Manager and Information Agent)
for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage Firms, please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Call Toll-Free (800) 881-8320
June 7, 1996
<PAGE> 1
EXHIBIT 99(b)
================================================================================
$600,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
CLEAR CHANNEL COMMUNICATIONS, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
October 19, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Amendments and Renewals . . . . . . . . . . . . . . . 19
Section 1.3 Construction . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2
Advances
Section 2.1 The Advances . . . . . . . . . . . . . . . . . . . . 19
Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . 20
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.5 Prepayment . . . . . . . . . . . . . . . . . . . . . 26
Section 2.6 Reduction and Change of Commitment . . . . . . . . . 27
Section 2.7 Non-Receipt of Funds by the Administrative Lender . . 28
Section 2.8 Payment of Principal of Advances . . . . . . . . . . 29
Section 2.9 Reimbursement . . . . . . . . . . . . . . . . . . . . 29
Section 2.10 Manner of Payment . . . . . . . . . . . . . . . . . . 30
Section 2.11 LIBOR Lending Office . . . . . . . . . . . . . . . . 30
Section 2.12 Sharing of Payments . . . . . . . . . . . . . . . . . 31
Section 2.13 Calculation of LIBOR Rate . . . . . . . . . . . . . . 31
Section 2.14 Booking Loans . . . . . . . . . . . . . . . . . . . . 31
Section 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.16 Letters of Credit . . . . . . . . . . . . . . . . . . 34
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Closing and the Initial
Advance and the Letter of Credit . . . . . . . . . . 41
Section 3.2 Conditions Precedent to All Advances and Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties . . . . . . . . . . . 44
<PAGE> 3
Section 4.2 Survival of Representations and Warranties, etc . . . . . . 50
ARTICLE 5
General Covenants
Section 5.1 Preservation of Existence and Similar Matters. . . . . . . . 51
Section 5.2 Business; Compliance with Applicable Law . . . . . . . . . . 51
Section 5.3 Maintenance of Properties. . . . . . . . . . . . . . . . . . 51
Section 5.4 Accounting Methods and Financial Records . . . . . . . . . . 51
Section 5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.6 Payment of Taxes and Claims. . . . . . . . . . . . . . . . . 52
Section 5.7 Visits and Inspections . . . . . . . . . . . . . . . . . . . 52
Section 5.8 Payment of Indebtedness. . . . . . . . . . . . . . . . . . . 52
Section 5.9 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.10 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.11 Environmental Law Compliance . . . . . . . . . . . . . . . . 54
ARTICLE 6
Information Covenants
Section 6.1 Quarterly Financial Statements and Information . . . . . . . 55
Section 6.2 Annual Financial Statements and Information;
Certificate of No Default. . . . . . . . . . . . . . . . . . 55
Section 6.3 Compliance Certificates. . . . . . . . . . . . . . . . . . . 56
Section 6.4 Copies of Other Reports and Notices. . . . . . . . . . . . . 56
Section 6.5 Notice of Litigation, Default and Other Matters. . . . . . . 57
Section 6.6 ERISA Reporting Requirements . . . . . . . . . . . . . . . . 58
ARTICLE 7
Negative Covenants
Section 7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.3 Investments. . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.4 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . 61
Section 7.5 Liquidation, Disposition or Acquisition of
Assets, Merger, New Subsidiaries . . . . . . . . . . . . . . 62
Section 7.6 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.7 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.8 Affiliate Transactions . . . . . . . . . . . . . . . . . . . 63
Section 7.9 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . 63
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 7.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.11 Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . 64
Section 7.12 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . 64
Section 7.13 Debt Service Coverage Ratio . . . . . . . . . . . . . . . . 64
Section 7.14 Capital Stock of the Borrower . . . . . . . . . . . . . . . 64
Section 7.15 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . 65
Section 7.16 Sale or Discount of Receivables . . . . . . . . . . . . . . 65
Section 7.17 Business of Television Licenses and
Radio Licenses and Metroplex
Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.18 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 8
Default
Section 8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 66
Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination
Inadequate . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.4 Effect On Base Rate Advances . . . . . . . . . . . . . . . 72
Section 9.5 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 Agreement Among Lenders . . . . . . . . . . . . . . . . . . 73
Section 10.2 Lender Credit Decision . . . . . . . . . . . . . . . . . . 75
Section 10.3 Benefits of Article . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 11
Miscellaneous
Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.4 Determination by the Lenders
Conclusive and Binding . . . . . . . . . . . . . . . . . . 77
</TABLE>
<PAGE> 5
Schedules and Exhibits
Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Liens
Schedule 3: Existing Litigation
Schedule 4: Licenses, Permits and Other Authorizations
Schedule 5: Rights Relating to Pledged Stock
Schedule 6: Existing Guaranties
Schedule 7: Subsidiaries
Schedule 8: Existing Investments
Schedule 9: Existing Indebtedness
Schedule 10: Guaranties
Schedule 11: Material Adverse Changes
Exhibit A: Revolving Credit Note
Exhibit B: Bid Rate Note
Exhibit C: Borrower Pledge Agreement
Exhibit D: Subsidiary Pledge Agreement (Third Tier)
Exhibit E: Subsidiary Pledge Agreement (Holdings)
Exhibit F: Intentionally Omitted Exhibit G: Subsidiary Guaranty
Exhibit H: Compliance Certificate
Exhibit I: Assignment and Acceptance
Exhibit J: Subsidiary Pledge Agreement (Second Tier)
iv
<PAGE> 6
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October
19,1995, among CLEAR CHANNEL COMMUNICATIONS, INC., a Texas corporation
("Borrower"), the Lenders from time to time party hereto, and NATIONSBANK OF
TEXAS, N.A., a national banking association, as administrative agent for the
Lenders.
BACKGROUND
The Borrower and lenders entered into that certain Credit Agreement
dated as of September 30, 1994 in the maximum principal amount of $350,000,000
(said Credit Agreement, as amended, the "Existing Credit Agreement"). The
Borrower has requested that the Lenders amend and restate the Existing Credit
Agreement by making a credit facility available to the Borrower up to the
maximum principal amount of $600,000,000. The Lenders have agreed to do so,
subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement is being amended and
restated as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
"ARN" shall mean the Australian Radio Network Limited, PTY, an
Australian propriety company, 50% of whose Capital Stock is owned by the
Borrower. "ARN Investment" shall mean the investment by the Borrower in at
least 50% of the Capital Stock of ARN. "Additional Costs" shall have the
meaning set forth in Section 9.5 hereof.
"Administrative Lender" shall mean NationsBank of Texas, N.A., a
national banking association, as administrative agent for Lenders, or such
successor administrative agent appointed pursuant to Section 10.1(b) hereof.
"Advance" shall mean a Revolving Credit Advance or aBid Rate Advance
and "Advances" means Revolving Credit Advances and Bid Rate Advances.
<PAGE> 7
"Affiliate" shall mean any Person that directly or indirectly through
one or more Subsidiaries Controls, or is Controlled By or Under Common Control
with, the Borrower.
"Affiliation Agreements" shall mean all affiliation agreements of the
Borrower and each Subsidiary with Fox Broadcasting. "Agreement" shall mean this
Credit Agreement, as amended or renewed from time to time. "Agreement Date"
shall mean the date of this Agreement.
"Amortization Date" shall mean the last Business Day of December 1998.
"Applicable Environmental Laws" shall mean applicable laws pertaining
to health or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" shall mean (a) in respect of any Person, all
provisions of constitutions, statutes, rules, regulations, courts and orders of
governmental bodies or regulatory agencies applicable to such Person and its
properties, including, without limiting the foregoing, all orders and decrees
of all courts and arbitrators in proceedings or actions to which the Person in
question is a party, and (b) in respect of contracts relating to interest or
finance charges that are made or performed in the State of Texas, "Applicable
Law" shall mean the laws of the United States of America, including without
limitation 12 USC 85 and 86, as amended from time to time, and any other
statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit,
and the laws of the State of Texas, including, without limitation, Article
50691.04, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art.
1.04"), and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree that the provisions of Chapter
15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not
apply to Advances, this Agreement, the Notes or any other Loan Documents.
"Applicable Margin" shall mean the following per annum percentages,
applicable in the following situations:
<TABLE>
<CAPTION>
Applicability Base Rate LIBOR
Basis Basis
<S> <C> <C> <C>
(i) If the Leverage Ratio is not less than 5.0 to 1 0.25 1.2500
</TABLE>
2
<PAGE> 8
<TABLE>
<S> <C> <C> <C>
(ii) If the Leverage Ratio is less than 5.0 to 1 but is not
less than 4.5 to 1 0.00 1.0000
(iii) If the Leverage Ratio is less than 4.5 to 1 but is not
less than 4.0 to 1 0.00 0.7500
(iv) If the Leverage Ratiois less than 4.0 to 1 but is not
less than 3.5 to 1 0.00 0.6250
(v) If the Leverage Ratio is less than 3.5 to 1 but is not
less than 3.0 to 1 0.00 0.5000
(vi) If the Leverage Ratio is less than 3.0 to 1 but is not
less than 2.0 to 1 0.00 0.4375
(vii) If the Leverage Ratio is less than 2.0 to 1 0.00 0.3750
</TABLE>
The Applicable Margin payable by the Borrower on the Revolving Credit Advances
outstanding hereunder shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of the Borrower as tested by the Leverage Ratio. Except as set
forth in the last sentence hereof, any such increase or reduction in the
Applicable Margin provided for herein shall be effective three Business Days
after receipt by Administrative Lender of the applicable financial statements.
If financial statements of the Borrower setting forth the Leverage Ratio are
not received by the Administrative Lender by the date required pursuant to
Section 6.1 hereof, the Applicable Margin shall be determined as if the
Leverage Ratio is not less than 5.0 to 1 until such time as such financial
statements are received. For the final quarter of any fiscal year of the
Borrower, the Borrower may provide its unaudited financial statements, subject
only to year-end adjustments, for the purpose of adjusting the Applicable
Margin. Notwithstanding anything above to the contrary, if the compliance
certificate required to be delivered pursuant to Section 7.5(b) hereof prior to
any proposed acquisition indicates that the Leverage Ratio after giving effect
to the proposed acquisition would result in an adjustment of the Applicable
Margin, the Applicable Margin shall be increased or decreased, as the case may
be, as of the date of such acquisition.
"Art. 1.04" shall have the meaning ascribed thereto in the definition
of "Applicable Law."
"Assignees" shall mean any assignee of a Lender pursuant to an
Assignment Agreement and shall have the meaning ascribed thereto in Section
11.6 hereof.
"Assignment Agreement" shall have the meaning ascribed thereto in
Section 11.6 hereof.
"Authorized Signatory" shall mean such senior personnel of the
Borrower as may be duly authorized and designated in writing by the Borrower to
execute documents, agreements and instruments on behalf of the Borrower, and to
request Advances and Letters of Credit hereunder.
3
<PAGE> 9
"Base Rate Advance" shall mean any Revolving Credit Advance bearing
interest at the Base Rate Basis.
"Base Rate Basis" shall mean, for any day, a per annum interest rate
equal to the lesser of (a) the Highest Lawful Rate on such day, or (b) the
higher of (i) the sum of (A) 0.50% plus (B) the Federal Funds Rate plus (C) the
Applicable Margin, or (ii) the sum of (A) the Prime Rate on such day plus (B)
the Applicable Margin. The Base Rate Basis shall be adjusted automatically as
of the opening of business on the effective date of each change in the Prime
Rate or Federal Funds Rate, as the case may be, to account for such change.
"Bid Rate Advance" shall mean an Advance the interest rate on which is
determined by agreement between the Borrower and the Lender making such Advance
pursuant to Section 2.1(b) hereof.
"Bid Rate Note" shall mean each promissory note of the Borrower
evidencing Bid Rate Advances, substantially in the form of Exhibit B hereto,
together with any extension, renewal or amendment thereof or substitution
therefor.
"Borrower" shall mean Clear Channel Communications, Inc., a Texas
corporation.
"Borrower Pledge Agreement" shall mean one or more pledge agreements,
executed by the Borrower, granting a Lien on (i) the Pledged Stock owned
directly by the Borrower and (ii) the Holdings Noteas security for the
Obligations, substantially in the form of Exhibit C hereto, as such agreement
may be amended, modified, renewed or extended from time to time.
"Business Day" shall mean a day on which banks are open for the
transaction of business as required by this Agreement in Dallas, Texas and New
York, New York and, with respect to any LIBOR Advance, in London, England, and
as otherwise relevant to the determination to be made or the action to be
taken.
"Capital Expenditures" shall mean expenditures for the purchase of
tangible assets of longtermuse which are capitalized in accordance with
GAAP; provided, however, Capital Expenditures shall not include assets acquired
through trade without any expenditure of cash, such trade capital expenditures
not to exceed $3,000,000 in aggregate value per year, such valuation to be
determined using the lesser of the fair market value of assets received or the
value of air-time run in exchange for the assets received.
"Capital Stock" shall mean, as to any Person, the equity interests in
such Person, including, without limitation, the shares of each class of capital
stock of any Person that is a corporation and each class of partnership
interests (including, without limitation, general, limited and preference
units) in any Person that is a partnership.
4
<PAGE> 10
"Capitalized Lease Obligations" shall mean that portion of any
obligation of the Borrower or any Restricted Subsidiary as lessee under a lease
which at the time would be required to be capitalized on a balance sheet
prepared in accordance with GAAP.
"CCC-Houston" shall mean CCC-Houston AM, Ltd., a Texas limited
partnership and a Subsidiary of Borrower. "CCRE" shall mean Clear Channel Real
Estate, Inc., a Nevada corporation, and a wholly-owned Subsidiary of Holdings.
"CCRE Note" shall mean that certain promissory note of CCRE payable to
the order of Holdings in the original principal amount not to exceed
$600,000,000 evidencing loans and advances made or to be made by the Holdings
to CCRE, together with any extension, renewal, increase or amendment thereof,
or substitution therefor.
"CCR Houston-Nevada" shall mean CCR Houston Nevada, Inc., a Nevada
corporation, and a whollyowned Subsidiary of Radio.
"CCR Houston-Nevada Note" shall mean that certain promissory note of
CCR Houston-Nevada payable to the order of Radio in the original principal
amount not to exceed $600,000,000 evidencing loans and advances made or to be
made by the Radio to CCR Houston- Nevada, together with any extension, renewal,
increase or amendment thereof, or substitution therefor.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean the Pledged Stock, the Intercompany Notes and
any other collateral hereafter granted by any Person to the Administrative
Lender for the benefit of the Lenders to secure the Obligations and all
proceeds thereof.
"Commitment" shall mean $600,000,000, as reduced from time to time
pursuant to Section 2.6 hereof.
"Communications Act" shall mean, collectively, the Communications Act
of 1934, as amended and the rules and regulations promulgated thereunder, as
from time to time in effect.
"Control" or "Controlled By" or "Under Common Control" shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of voting securities, by
contract or otherwise); provided, however, that (a) in the event that no one
Person owns more than 50% of the outstanding Capital Stock of a corporation or
entity, any Person which beneficially owns, directly or, by contract or law,
indirectly, 10% or more (in number of votes) of the securities having ordinary
voting power for the election of directors of such corporation shall be
conclusively presumed to control such corporation or (b) in the event that one
Person owns greater than 50% of the outstanding Capital
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Stock of a corporation, any Person which beneficially owns, directly or, by
contract or law, indirectly, greater than 20% or more (in number of votes) of
the securities having ordinary voting power for the election of directors of
such corporation shall be conclusively presumed to control such corporation.
"Controlled Group" shall mean, as to any Person, all members ofa
controlled group of corporations and all trades or businesses (whether or not
incorporated) which are under common control with such Person and which,
together with such Person, are treated as a single employer under Section
414(b), (c), (m) or (o) of the Code; provided, however, that the Subsidiaries
of the Borrower shall be deemed to be members of the Borrower's Controlled
Group, and the Borrower and any other entities (whether incorporated or not
incorporated) which are under common Control with the Borrower and which,
together with the Borrower, are treated as a single employer under Section
414(b), (c), (m) or (o) of the Code, shall be deemed to be members of the
Borrower's Controlled Group on and after the Agreement Date.
"Default" shall mean an Event of Default and/or any of the events
specified in Section 8.1, regardless of whether there shall have occurred any
passage of time or giving of notice that would be necessary in order to
constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to
the lesser of (a) the Highest Lawful Rate, or (b) the sum of the Base Rate
Basis plus two percent.
"Determining Lenders" shall mean, on any date of determination, any
combination of the Lenders having at least 51% of the aggregate amount of the
Revolving Credit Advances then outstanding; provided, however, that if there
are no Revolving Credit Advances outstanding hereunder, "Determining Lenders"
shall mean any combination of Lenders whose Specified Percentages aggregate at
least 51%.
"Dividend" shall mean, as to any Person, (a) any declaration or
payment of any dividend (other than a dividend paid solely in shares of the
common stock of such Person) on, or the making of any distribution, loan,
advance or investment to or in any holder of, any shares of Capital Stock of
such Person (other than salaries and bonuses paid in the ordinary course of
business), or (b) any purchase, redemption, or other acquisition or retirement
for value of any shares of Capital Stock of such Person; provided, however,
that the acquisition of shares of Capital Stock of such Person for the purpose
of acquiring a Subsidiary (whether by merger, consolidation, asset acquisition,
stock acquisition, or otherwise) shall not be deemed a Dividend if (a) such
shares are used as a portion or all of the purchase price for the acquisition
of a Subsidiary within a period of ninety days from the date the initial shares
of such Capital Stock were acquired and (b) such Person shall have given the
Administrative Lender prior written notice of its intention to acquire such
Capital Stock for the purpose of acquiring a Subsidiary.
"Equity" shall mean shares of Capital Stock, or options, warrants or
any other right to subscribe for or otherwise acquire Capital Stock, of the
Borrower or any Subsidiary.
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<PAGE> 12
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" shall mean, with respect to the Borrower and its
Subsidiaries, (a) a Reportable Event (other than a Reportable Event not subject
to the provision for 30-day notice to the PBGC under regulations issued under
Section 4043 of ERISA), (b) the withdrawal of any such Person or any member of
its Controlled Group from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate under Section 4041 of ERISA, (d) the
institution of proceedings to terminate a Plan by the PBGC, (e) the failure to
make required contributions which could result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA, or (f) any other event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan or the imposition of any liability under Title IV of
ERISA other than PBGC premiums due but not delinquent under Section 4007 of
ERISA.
"Event of Default" shall mean any of the events specified in Section
8.1, provided that any requirement for notice or lapse of time has been
satisfied.
"Excess Cash Flow" shall mean, for any year, calculated for the
Borrower and its Restricted Subsidiaries on a consolidated basis, an amount
equal to the remainder of (a) Operating Cash Flow for said year, minus (b) the
sum of (i) Capital Expenditures for said year, plus (ii) cash expenditures for
the payment of taxes for said year, plus (iii) principal, interest and fees
scheduled to be paid and paid for said year with respect to Indebtedness.
"Existing Credit Agreement" shall mean that certain Credit Agreement
dated as of September 30, 1994, by and among the Borrower, NationsBank of
Texas, N.A., as Administrative Lender, and the lenders party thereto, as the
same may have been amended, modified, renewed or extended from time to time.
"FCC" shall mean the Federal communications Commission, or any
governmental agency succeeding to the functions thereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
the Administrative Lender on such day on such transactions as determined by
Administrative Lender.
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<PAGE> 13
"Fixed Charges" shall mean, for the Borrower and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, for
the four most recently ended fiscal quarters preceding any date of
determination, an amount equal to the sum of (a) all payments of principal,
interest, fees and other amounts paid on all Indebtedness, plus (b) all
payments under Capitalized Lease Obligations, plus (c) all Capital
Expenditures, plus (d) cash expenditures for the payment of taxes, plus (e) all
Dividends paid.
"GAAP" shall mean generally accepted accounting principles applied on
a consistent basis, set forth in the Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants, or their
successors which are applicable in the circumstances as of the date in
question. The requisite that such principles be applied on a consistent basis
shall mean that the accounting principles observed in a current period are
comparable in all material respects to those applied in a preceding period.
"Guaranty" or "Guaranteed", as applied to an obligation, shall mean
and include (a) a guaranty, direct or indirect, in any manner, of any part or
all of such obligation, and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of any part
or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit.
"Highest Lawful Rate" shall mean at the particular time in question
the maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligations
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas (including any amendment to such
Applicable Law), the applicable rate ceiling shall be (a) the indicated rate
ceiling described in and computed in accordance with the provisions of Section
(a)(1) of Art. 1.04, or (b) if the parties subsequently contract as allowed by
Applicable Law, the quarterly ceiling or the annualized ceiling computed
pursuant to Section (d) of Art. 1.04; provided, however, that at any time the
indicated rate ceiling, the quarterly ceiling or the annualized ceiling shall
be less than 18% per annum or more than 24% per annum, the provisions of
Sections (b)(1) and (2) of said Art. 1.04 shall control for purposes of such
determination, as applicable.
"Holdings" shall mean Clear Channel Holdings, Inc., a Nevada
corporation, and a wholly-owned Subsidiary of the Borrower.
"Holdings Note" shall mean that certain promissory note of Holdings
payable to the order of Borrower in the original principal amount not to exceed
$600,000,000 evidencing loans and
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<PAGE> 14
advances made or to be made by the Borrower to Holdings, together with any
extension, renewal, increase oramendment thereof, or substitution therefor.
"Increased Letter of Credit Costs" shall have the meaning set forth in
Section 2.16(d) hereof.
"Increased Letter of Credit Costs Retroactive Effective Date" shall
have the meaning set forth in Section 2.16(d) hereof.
"Increased Letter of Credit Costs Set Date" shall have the meaning set
forth in Section 2.16(d) hereof.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of partners' equity or of Capital Stock or of surplus or of
general contingency or deferred tax reserves, which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, (b) all obligations secured by any Lien
on any property or asset owned by such Person, whether or not the obligation
secured thereby shall have been assumed, (c) to the extent not otherwise
included, all Capitalized Lease Obligations of such Person, all obligations of
such Person with respect to leases constituting part of a sale and leaseback
arrangement, all Guaranties, all obligations under interest rate swap
agreements or similar hedge agreements, all indebtedness for borrowed money
(excluding, for purposes of calculation of financial covenants only,
indebtedness evidenced by Intercompany Notes), and all reimbursement
obligations with respect to outstanding letters of credit, and (d) any
"withdrawal liability" of the Borrower or any Subsidiary, as such term is
defined under Part I of Subtitle E of Title IV of ERISA.
"Indemnified Matters" shall have the meaning ascribed to it in Section
5.10(a) hereof.
"Indemnitees" shall have the meaning ascribed to it in Section 5.10(a)
hereof.
"Index Debt Rating" shall mean the rating available to the Borrower's
senior, unsecured, noncredit-enhanced long term indebtedness for borrowed money
("Index Debt") or the implied rating established by Moody's or S&P as if the
Borrower had outstanding Index Debt.
"Institutional Debt" shall mean Indebtedness for borrowed money which
may be raised by the Borrower in the private placement or public debt markets.
"Intercompany Notes" shall mean, collectively, the Management Note,
the Television Note, the Radio Note, the Metroplex Note, the Radio Licenses
Note, the Television Licenses Note, the Metroplex Licenses Note, the Memphis
Note, the Productions Note, the CCR Houston Nevada Note, the CCRE Note and the
Holdings Note.
"Interest Period" shall mean (a) for any Base Rate Advance, the period
beginning on the day the Advance was made and ending on the first Quarterly
Date thereafter, (b) for any LIBOR
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<PAGE> 15
Advance, the period beginning on the day the Advance is made and ending one,
two, three, six or, subject to each Lender's good faith determination of
availability, twelve months thereafter (as the Borrower shall select), and (c)
any Bid Rate Advance, the period beginning on the day the Advance was made and
ending the date the Borrower and the Lender making the BidRate Advance agree
pursuant to Section 2.1(b).
"Investment" shall mean any acquisition of all or substantially all
assets of any Person, or any direct or indirect purchase or other acquisition
of, or beneficial interest in, Capital Stock or other securities of any other
Person, or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution to, or
investment in any other Person, including without limitation the incurrence or
sufferance of Indebtedness or accounts receivable of any other Person that are
not current assets or do not arise in the ordinary course of business.
"Issuing Bank" shall mean NationsBank of Texas, N.A., in its capacity
as issuer of the Letters of Credit.
"L/C Cash Collateral Account" shall have themeaning specified in
Section 2.16(g) hereof. "L/C Related Documents" shall have the meaning
specified in Section 2.16(d) hereof.
"Lender" shall mean each financial institution shown on the signature
pages hereof so long as such financial institution maintains a Commitment or is
owed any part of the Obligations (including the Administrative Lender in its
individual capacity), and each Assignee that hereafter becomes party hereto
pursuant to Section 11.6 hereof.
"Letter of Credit" shall have the meaning specified in Section 2.16(a)
hereof.
"Letter of Credit Agreement" shall have the meaning specified in
Section 2.16(b) hereof.
"Letter of Credit Facility" shall mean the amount of the Letters of
Credit the Issuing Bank may issue pursuant to Section 2.16(a) hereof.
"Leverage Ratio" shall mean, for any date of determination, the ratio
of Total Debt as of the date of determination to Operating Cash Flow for the
four most recently ended fiscal quarters preceding such date of determination.
"LIBOR Advance" shall mean a Revolving Credit Advance which the
Borrower requests to be made as a LIBOR Advance or which is reborrowed as a
LIBOR Advance, in accordance with the provisions of Section 2.2 hereof.
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<PAGE> 16
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
lesser of (a) the Highest Lawful Rate, or (b) the sum of the LIBOR Rate plus
the Applicable Margin. The LIBOR Basis shall, with respect to LIBOR Advances
with Interest Periods in excess of six months, be subject to premiums assessed
by each Lender, which are payable directly to each Lender. Once determined, the
LIBOR Basis shall remain unchanged during the applicable Interest Period.
"LIBOR Lending Office" shall mean, with respect to a Lender, the
office designated as its LIBOR Lending Office on Schedule 1 attached hereto,
and such other office of the Lender or any of its affiliates hereafter
designated by notice to the Borrower and the Administrative Lender.
"LIBOR Rate" shall mean, for any Interest Period, the interest rate
per annum (rounded upward to the nearest one sixteenth (1/16th) of one percent)
at which deposits in United States Dollars are offered to the Administrative
Lender by leading banks reasonably selected by the Administrative Lender in the
London interbank market at approximately 11:00 a.m. (London time), two Business
Days before the first day of such Interest Period, in an amount approximately
equal to the principal amount of, and for a length of time approximately equal
to the Interest Period for, the LIBOR Advance sought by the Borrower.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, collateral assignment, hypothecation, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment or other
encumbrance of any kind in respect of such property, whether or not choate,
vested or perfected.
"Loan Documents" shall mean this Agreement, the notes, the pledge
agreements, the Subsidiary Guaranty, fee letters, and any other document or
agreement executed or delivered from time to time by the Borrower, any
Subsidiary or any other Person in connection herewith or as security for the
Obligations.
"Local Marketing Agreement" shall mean any time brokerage agreements,
local market affiliation agreements or related or similar agreements entered
into between the Borrower or any Subsidiary and any other Person, as any of the
above may be amended, substituted, replaced or modified.
"Management" shall mean Clear Channel Management, Inc., a Delaware
corporation, and a wholly-owned Subsidiary of Holdings.
"Management Note" shall mean that certain promissory note of
Management payable to the order of Holdings in the original principal amount
not to exceed $600,000,000 evidencing loans and advances made or to be made by
Holdings to Management, together with any extension, renewal, increase or
amendment thereof, or substitution therefor.
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<PAGE> 17
"Material Adverse Effect" shall mean any act or circumstance or event
that (a) causes a Default, or (b) otherwise could reasonably be expected to be
material and adverse to the business, consolidated assets, liabilities,
financial condition, results of operations or prospects of the Borrower and its
Restricted Subsidiaries, together taken as a whole.
"Maturity Date" shall mean the last Business Day of September 2003.
"Maximum Amount" shall mean the maximum amount of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligations.
"Memphis" shall mean Clear Channel Communications of Memphis, Inc., a
Texas corporation, and a wholly-owned Subsidiary of Holdings.
"Memphis Note" shall mean that certain promissory note of Memphis
payable to the order of Holdings in the original principal amount not to exceed
$600,000,000 evidencing loans and advances made or to be made by Holdings to
Memphis, together with any extension, renewal, increase or amendment thereof or
substitutions therefor.
"Metroplex" shall mean Clear Channel Metroplex, Inc., a Nevada
corporation, and a wholly-owned Subsidiary of Metroplex Licenses.
"Metroplex Licenses" shall mean Clear Channel Metroplex Licenses,
Inc., a Nevada corporation, and a wholly- owned Subsidiary of the Borrower.
"Metroplex Licenses Note" shall mean that certain promissory note of
Metroplex Licenses payable to the order of the Borrower in the original
principal amount not to exceed $600,000,000 evidencing loans or advances made
or to be made by Borrower to Metroplex Licenses, together with any extension,
renewal, increase or amendment thereof, or substitution therefor.
"Metroplex Note" shall mean that certain promissory note of Metroplex
payable to the order of Metroplex Licenses in the original principal amount not
to exceed $600,000,000 evidencing loans or advances made or to be made by
Metroplex Licenses to Metroplex, together with any extension, renewal, increase
or amendment thereof, or substitution therefor.
"Moody's" shall mean Moody's Investors Services, Inc.
"Multiemployer Plan" shall mean, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.
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<PAGE> 18
"NationsBank Guaranties" shall mean the Guaranty in favor of
NationsBank of Texas, N.A. on behalf of RDS Broadcasting, Inc. and Mercury
Broadcasting, Inc. in the amounts of $9,575,000 and $2,000,000 respectively.
"Necessary Authorization" shall mean any license, permit, consent,
approval or authorization from, or any filing or registration with, any
governmental or other regulatory authority (including without limitation the
FCC) necessary or appropriate to enable the Borrower or any Subsidiary to
maintain and operate its business and properties.
"Net Cash Proceeds" shall mean, with respect to any sale, lease,
transfer or disposition of any asset by any Person or the issuance of
Institutional Debt or Equity by any Person, the aggregate amount of cash
received by such Person in connection with such transaction minus reasonable
fees, costs and expenses and related taxes.
"Notice of Issuance" shall have the meaning ascribed to it in Section
2.16(b) hereof.
"Obligations" shall mean (a) all obligations of any nature (whether
matured or unmatured, fixed or contingent, including the Reimbursement
Obligations) of the Borrower or any Subsidiary to the Lenders under the Loan
Documents, as they may be amended from time to time, and (b) all obligations of
the Borrower or any Subsidiary for losses, damages, expenses or any other
liabilities of any kind that any Lender may suffer by reason of a breach by the
Borrower or any Subsidiary of any obligation, covenant or undertaking with
respect to any Loan Document.
"Operating Cash Flow" shall mean, for any period, determined in
accordance with GAAP on a consolidated basis for the Borrower and its
Restricted Subsidiaries, the sum of (a) pre-tax net income (excluding therefrom
(i) any items of extraordinary gain, including net gains on the sale of assets
other than asset sales in the ordinary course of business, and (ii) any items
of extraordinary loss, including net losses on the sale of assets other than
asset sales in the ordinary course of business), plus (b) interest expense,
depreciation and amortization (including amortization of film contracts), and
other non-cash expenses, and minus (c) payments made or scheduled to be made
with respect to film contracts. Operating Cash Flow shall be adjusted to
exclude (i) any extraordinary non-cash items deducted from or included in the
calculation of pre-tax net income and (ii) without duplication, any accrued but
not paid income from Investments. For purpose of calculation of Operating Cash
Flow with respect to assets not owned at all times during the four fiscal
quarters preceding the date of determination of Operating Cash Flow there shall
be (i) included in Operating Cash Flow the Operating Cash Flow of any assets
acquired during any of such four fiscal quarters for the twelve month period
preceding the date of determination and (ii) excluded from Operating Cash Flow
the Operating Cash Flow of any assets disposed of during any of such four
fiscal quarters for the twelve month period preceding the date of
determination.
"Operating Lease" shall mean any operating lease, as defined in the
Financial Accounting Standard Board Statement of Financial Accounting Standards
No. 13, dated November, 1976 or
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<PAGE> 19
otherwise in accordance with GAAP, with an initial or remaining noncancellable
lease term in excess of one year.
"Participant" shall have the meaning ascribed to it in Section 11.6(c)
hereof.
"Participation" shall have the meaning ascribed to it in Section
11.6(c) hereof.
"Payment Date" shall mean the last day of the Interest Period for any
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations
hereunder;
(b) (i) Liens on real estate for real estate taxes not yet delinquent,
(ii) Liens created by lease agreements to secure the payments of rental amounts
and other sums not yet due thereunder, (iii) Liens on leasehold interests
created by the lessor in favor of any mortgagee of the leased premises, and
(iv) Liens for taxes, assessments, governmental charges, levies or claims that
are being diligently contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on such Person's books, but
only so long as no foreclosure, restraint, sale or similar proceedings have
been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen and other similar Liens incurred in the ordinary course of business
for sums not yet due or being contested in good faith, if such reserve or
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person;
(f) Liens created to secure the purchase price of tangible personal
property acquired by such Person or created to secure Indebtedness permitted by
Section 7.1(d) hereof in an amount not to exceed $7,500,000 in the aggregate,
which is incurred solely for the purpose of financing the acquisition of such
assets and incurred at the time of acquisition, so long as each such Lien shall
at all times be confined solely to the asset or assets so acquired (and
proceeds thereof), and refinancings thereof so long as any such Lien remains
solely on the asset or assets acquired and the amount of Indebtedness related
thereto is not increased;
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<PAGE> 20
(g) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been
secured, provided that (i) suchPerson shall have established adequate reserves
for such judgments or awards, (ii) such judgments or awards shall be fully
insured and the insurer shall not have denied coverage, or (iii) such judgments
or awards shall have been bonded to the satisfaction of the Determining
Lenders; and
(h) Any Liens existing on the Agreement Date which are described on
Schedule 2 hereto, and Liens resulting from the refinancing of the related
Indebtedness, provided that the Indebtedness secured thereby shall not be
increased and the Liens shall not cover additional assets of the Borrower.
"Person" shall mean an individual, corporation, partnership, trust or
unincorporated organization, limited liability company, or a government or any
agency or political subdivision thereof.
"Plan" shall mean an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) that is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code and is maintained for the employees of the Borrower, its Subsidiaries
or any member of their Controlled Group.
"Pledged Stock" shall mean all Capital Stock of the Restricted
Subsidiaries.
"Prime Rate" shall mean, at any time, the prime interest rate
announced or published by the Administrative Lender from time to time as its
reference rate for the determination of interest rates for loans of varying
maturities in United States dollars to United States residents of varying
degrees of creditworthiness and being quoted at such time by the Administrative
Lender as its "prime rate;" it being understood that such rate may not be the
lowest rate of interest charged by the Administrative Lender.
"Productions" shall mean Clear Channel Productions, Inc., a Nevada
corporation, and a wholly owned Subsidiary of Holdings.
"Productions Note" shall mean that certain promissory note of
Productions payable to the order of Holdings in the original principal amount
not to exceed $600,000,000 evidencing loans and advances made or to be made by
Holdings to Productions, together with any extension, renewal, increase or
amendment thereof, or substitution therefor.
"Pro-Forma Debt Service" shall mean, as of any date of determination,
determined in accordance with GAAP for the Borrower and its Restricted
Subsidiaries on a consolidated basis, the sum (without duplication) of (a) all
payments of principal, interest, fees and other amounts scheduled to be paid on
all Indebtedness during the succeeding four fiscal quarters (assuming for any
Indebtedness subject to a floating interest rate, an interest rate equal to the
applicable rate in effect on the date of determination), plus (b) without
duplication, all rentals and other
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<PAGE> 21
amounts (excluding insurance premiums and property taxes) scheduled to be paid
under all Capitalized Lease Obligations during the succeeding four fiscal
quarters, plus (c) all debt discount and expense scheduled to be amortized
during the succeeding four fiscal quarters..
"Quarterly Date" shall mean the last Business Day of each September,
December, March and June, beginning December 31, 1995.
"Radio" shall mean Clear Channel Radio, Inc., a Nevada corporation,
and a wholly-owned Subsidiary of Radio Licenses.
"Radio Licenses" shall mean Clear Channel Radio Licenses, Inc., a
Nevada corporation, and a whollyowned Subsidiary of Holdings.
"Radio Licenses Note" shall mean that certain promissory note of Radio
Licenses payable to the order of Holdings in the original principal amount not
to exceed $600,000,000 evidencing loans and advances made or to be made by
Holdings to Radio Licenses, together with any extension, renewal, increase or
amendment thereto, or substitution therefor.
"Radio Note" shall mean that certain promissory note of Radio payable
to the order of Radio Licenses in the original principal amount not to exceed
$600,000,000 evidencing loans and advances made or to be made by Radio Licenses
to Radio, together with any extension, renewal, increase or amendment thereof,
or substitution therefor.
"Refinancing Advance" shall mean any Revolving Credit Advance which is
used to pay the principal amount (or any portion thereof) of a Revolving Credit
Advance or Bid Rate Advance at the end of its Interest Period and which, after
giving effect to such application, does not result in an increase in the
aggregate amount of outstanding Revolving Credit Advances or Bid Rate Advances
at the time of the Refinancing Advance.
"Regulatory Modification" shall have the meaning set forth in Section
9.5 hereof.
"Regulatory Modification Retroactive Effective Date" shall have the
meaning set forth in Section 9.5 hereof.
"Regulatory Modification Set Date" shall have the meaning set forth in
Section 9.5 hereof.
"Reimbursement Obligation" shall mean, in respect of any Letter of
Credit as at any date of determination, the maximum aggregate amount which is
then available to be drawn under such Letter of Credit (whether the conditions
to drawing thereunder have been met) plus any unreimbursed amounts under
outstanding Letters of Credit.
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<PAGE> 22
"Release Date" shall mean the date on which the Notes have been paid,
all other Obligations due and owing have been paid and performed in full, and
the Commitment has been terminated.
"Reportable Event" shall have the meaning set forth in Title IV of
ERISA.
"Restricted Subsidiary" shall mean (i) any Subsidiary which is not an
Unrestricted Subsidiary and (ii) ARN.
"Revolving Credit Advance" shall mean an Advance made pursuant to
Section 2.1(a) hereof.
"Revolving Credit Note" shall mean any promissory note of the Borrower
evidencing Revolving Credit Advances hereunder, substantially in the form of
Exhibit A hereto, together with any extension, renewal or amendment thereof or
substitution therefor.
"S&P" shall mean Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc., a New York Corporation.
"Snowden Broadcasting" shall mean Snowden Broadcasting, L.C., a Texas
limited liability company.
"Snowden Broadcasting of Louisville" shall mean Snowden Broadcasting
of Louisville, Inc., a Texas corporation.
"Special Counsel" shall mean the law firm of Donohoe, Jameson &
Carroll, P.C., or such other legal counsel as the Administrative Lender may
select.
"Specified Percentage" shall mean, as to any Lender, the percentage
indicated beside its name on the signature pages hereof, or if applicable,
specified in its most recent Assignment Agreement.
"Subordinated Debt" shall mean any Institutional Debt of the Borrower
or any of its Subsidiaries which shall have been and continues to be validly
and effectively subordinated to the prior payment in full of the Obligations on
terms and documentation approved in writing by the Determining Lenders.
"Subsidiary" shall mean (a) any corporation of which 50% or more of
the outstanding stock (other than directors' qualifying shares) having ordinary
voting power to elect a majority of its board of directors, regardless of the
existence at the time of a right of the holders of any class of securities of
such corporation to exercise such voting power by reason of the happening of
any contingency, is at the time owned by the Borrower, directly or through one
or more intermediaries, and (b) any other entity which is Controlled or then
capable of being Controlled
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<PAGE> 23
by the Borrower, directly or through one or more intermediaries, whether a
Restricted Subsidiary or Unrestricted Subsidiary.
"Subsidiary Guaranty" shall mean any Guaranty executed by one or more
Restricted Subsidiaries, guarantying payment and performance of the
Obligations, substantially in the form of Exhibit G hereto, as such agreement
may be amended, modified, renewed or extended from time to time.
"Subsidiary Pledge Agreement" shall mean, collectively, any pledge
agreement executed by one or more Restricted Subsidiaries, granting a Lien on
(i) the Pledged Stock owned by such Restricted Subsidiary and(ii) each
Intercompany Note evidencing intercompany advances made by such Restricted
Subsidiary, as security for the Obligations, substantially in the forms of
Exhibit D, E, G and J hereto, as appropriate, as such agreement may be amended,
modified, renewed or extended from time to time.
"Television" shall mean Clear Channel Television, Inc., a Nevada
corporation, and a whollyowned Subsidiary of Television Licenses.
"Television Licenses" shall mean Clear Channel Television Licenses,
Inc., a Nevada corporation, and a wholly-owned Subsidiary of Holdings.
"Television Licenses Note" shall mean that certain promissory note of
Television Licenses payable to the order of Holdings in the original principal
amount not to exceed $600,000,000 evidencing loans and advances made or to be
made by Holdings to Television Licenses, together with any extension, renewal,
increase or amendment thereof, or substitution therefor.
"Television Note" shall mean that certain promissory note of
Television payable to the order of Television Licenses in the original
principal amount not to exceed $600,000,000 evidencing loans and advances made
or to be made by Television Licenses to Television, together with any
extension, renewal, increase or amendment thereof, or substitution therefor.
"Termination Event" shall mean, with respect to the Borrower, any of
its Subsidiaries or any Plan, (a) a Reportable Event, (b) the withdrawal from a
Plan during a Plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate
a Plan or the treatment of a Plan amendment as a termination under Section 4041
of ERISA, (d) the institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate a Plan or appoint a trustee to administer a Plan, (e)
the failure to comply with the minimum funding requirements of ERISA with
respect to any Plan, or (f) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Total Debt" shall mean, as of any date of determination, determined
for the Borrower and its Restricted Subsidiaries on a consolidated basis, the
sum (without duplication) of (a) all
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<PAGE> 24
principal and interest owing under the Loan Documents, (b) all Indebtedness
evidenced by a promissory note or otherwise representing borrowed money, (c)
all Capitalized Lease Obligations and (d) all Guaranties.
"Unrestricted Subsidiary" shall mean any entity acquired by an
Investment to the extent permitted pursuant to Section 7.3(h) hereof. An
Unrestricted Subsidiary may become a Restricted Subsidiary and subject to the
provisions hereof by becoming a party to the Subsidiary Guaranty and any
security documents delivered pursuant to Section 5.12 hereof.
"Weighted Average Life to Maturity" shall mean, as of the date of
determination, with respect to any debt instrument, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal payment of
such debt instrument by the amount of such principal payment by (ii) the sum of
all such principal payments.
Section 1.2 Amendments and Renewals. Each definition of an agreement
in this Article 1 shall include such agreement as amended to date, and as
amended or renewed from time to time in accordance with its terms, but only
with the prior written consent of the Determining Lenders.
Section 1.3 Construction. The terms defined in this Article 1 (except
as otherwise expressly provided in this Agreement) for all purposes shall have
the meanings set forth in Section 1.1 hereof, and the singular shall include
the plural, and vice versa, unless otherwise specifically required by the
context. All accounting terms used in this Agreement which are not otherwise
defined herein shall be construed in accordance with GAAP on a consolidated
basis for the Borrower and its Subsidiaries, unless otherwise expressly stated
herein. To the extent that a material change in GAAP occurs after the Agreement
Date, Borrower and Lenders agree to negotiate in good faith to affect
conforming changes to the financial covenants set forth in Article 7 hereof.
ARTICLE 2
Advances
Section 2.1 The Advances.
(a) Revolving Credit Advances. Each Lender severally agrees, upon the
terms and subject to the conditions of this Agreement, to make Revolving Credit
Advances to the Borrower from time to time up to and including the Maturity
Date in an aggregate amount not to exceed its Specified Percentage of the
Commitment less its Specified Percentage of the Reimbursement Obligations then
outstanding (assuming compliance with all conditions to drawing) for the
purposes set forth in Section 5.9 hereof. Subject to Section 2.9 hereof,
Advances may be repaid and then reborrowed. Any Revolving Credit Advance shall,
at the option of the Borrower as
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<PAGE> 25
provided in Section 2.2 hereof (and, in the case of LIBOR Advances, subject
to availability and to the provisions of Article 9 hereof), be made as a Base
Rate Advance or a LIBOR Advance; provided that there shall not be outstanding
to any Lender, at any one time, more than seven LIBOR Advances. Notwithstanding
any provision in any Loan Document to the contrary, in no event shall the
principal amount of all outstanding Revolving Credit Advances, Bid Rate
Advances and Reimbursement Obligations plus the principal amount of
Indebtedness guaranteed by the Borrower pursuant to the NationsBank Guaranties
exceed the Commitment. On the Maturity Date unless sooner paid as provided
herein, the outstanding Revolving Credit Advances shall be repaid in full.
(b) Bid Rate Advances. Each Lender may, in its sole discretion and on
the terms and conditions set forth in this Agreement, make Bid Rate Advances to
the Borrower from time to time in an aggregate amount not in excess of the
difference between (i) the Commitment minus (ii) the sum of (A) the aggregate
outstanding principal amount for all Revolving Credit Advances, plus (B) the
aggregate outstanding principal amount of all Bid Rate Advances, plus (C) the
amount of all Reimbursement Obligations, plus (D) the principal amount of
Indebtedness guaranteed by the Borrower pursuant to the NationsBank Guaranties.
Notwithstanding anything in the preceding sentence to the contrary, Bid Rate
Advances may not exceed $300,000,000 at any time. Each Bid Rate Advance shall
be for a period for not less than 7 days and not more than 90 days. The
Borrower may not request any Bid Rate Advances unless the Index Debt Rating is
the following or better: BBB- from S&P or Baa3 from Moody's. Bid Rate Advances
may not be prepaid without the prior written consent of the Lender making such
Bid Rate Advances.
Section 2.2 Manner of Borrowing and Disbursement.
(a) In the case of Base Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender at least one
Business Days' irrevocable written notice, or irrevocable telephonic notice
followed immediately bywritten notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow or reborrow a Base Rate Advance
hereunder. Notice shall be given to the Administrative Lender prior to 11:00
a.m., Dallas, Texas time, in order for such Business Day to count toward the
minimum number of Business Days required. Such notice of borrowing shall
specify the requested funding date, which shall be a Business Day, and the
amount of the proposed aggregate Base Rate Advances to be made by Lenders.
Each Base Rate Advance shall have an Interest Period beginning on the date such
Advance is made and ending on the Quarterly Date next following the date the
Advance is made; provided that no such Interest Period shall extend past the
Maturity Date.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least three Business Days'
irrevocable written notice, or irrevocable telephonic notice followed
immediately bywritten notice (provided, however, that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any notice so
given), of its intention to borrow or reborrow a LIBOR Advance hereunder.
Notice shall be
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<PAGE> 26
given to the Administrative Lender prior to 11:00 a.m., Dallas, Texas time, in
order for such Business Day to count toward the minimum number of Business Days
required. LIBOR Advances shall in all cases be subject to availability and to
Article 9 hereof. For LIBOR Advances, the notice of borrowing shall specify the
requested funding date, which shall be a Business Day, the amount of the
proposed aggregate LIBOR Advances to be made by Lenders and the Interest Period
selected by the Borrower, provided that no such Interest Period shall extend
past the Maturity Date or prohibit or impair the Borrower's ability to comply
with Section 2.8 hereof.
(c) Subject to Sections 2.1 and 2.9 hereof, at least three Business
Days prior to each Payment Date for a LIBOR Advance, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender irrevocable written
notice, or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic
notice in writing shall not invalidate any notice so given), specifying whether
all or a portion of such LIBOR Advance outstanding on the Payment Date (i) is
to be repaid and then reborrowed in whole or in part as a LIBOR Advance, (ii)
is to be repaid and then reborrowed in whole or in part as a Base Rate Advance,
or (iii) is to be repaid and not reborrowed; provided, however, notwithstanding
anything in this Agreement to the contrary, if on any Payment Date a Default
shall exist, such LIBOR Advance may only be reborrowed as a Base Rate Advance.
Upon such Payment Date, such LIBOR Advance shall, subject to the provisions
hereof, be so repaid and, as applicable, reborrowed.
(d) Subject to Sections 2.1 and 2.9 hereof, upon at least three
Business Days' irrevocable prior written notice (or three Business Days if the
Borrower wishes to reborrow a LIBOR Advance), through an Authorized Signatory,
or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic
notice in writing shall not invalidate any notice so given), the Borrower may
repay a Base Rate Advance on its Payment Date, or prepay a Base Rate Advance
without regard to its Payment Date, and (i) reborrow all or a portion of the
principal amount thereof as a Base Rate Advance, (ii) reborrow all or a portion
of the principal amount thereof as one or more LIBOR Advances, or (iii) not
reborrow all or any portion of such Base Rate Advance. Upon such Payment Date
or date of repayment, such Base Rate Advance shall, subject to the provisions
hereof, be so repaid and, as applicable, reborrowed.
(e) The aggregate amount of Base Rate Advances to be made by the
Lenders on any day shall be in a principal amount which is at least $1,000,000
and which is an integral multiple of $100,000; provided, however, that such
amount may equal the unused amount of the Commitment. The aggregate amount of
LIBOR Advances having the same Interest Period and to be made by the Lenders on
any day shall be in a principal amount which is at least $2,500,000 and which
is an integral multiple of $100,000.
(f) The Administrative Lender shall promptly notify the Lenders of
each notice (other than with respect to a Bid Rate Advance) received from the
Borrower pursuant to this Section. Failure of the Borrower to give any notice
in accordance with Sections 2.2(c) and (d) hereof
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<PAGE> 27
shall result in a repayment of any such existing Advance on the applicable
Payment Date by a Refinancing Advance which is a Base Rate Advance. Each Lender
shall, not later than noon, Dallas, Texas time, on the date of any Revolving
Credit Advance that is not a Refinancing Advance, deliver to the Administrative
Lender, at its address set forth herein, such Lender's Specified Percentage of
such Revolving Credit Advance in immediately available funds in accordance with
the Administrative Lender's instructions. Prior to 2:00 p.m., Dallas, Texas
time, on the date of any Revolving Credit Advance hereunder, the Administrative
Lender shall, subject to satisfaction of the conditions set forth in Article 3,
disburse the amounts made available to the Administrative Lender by the Lenders
by (i) transferring such amounts by wire transfer pursuant to the Borrower's
instructions, or (ii) in the absence of such instructions, crediting such
amounts to the account of the Borrower maintained with the Administrative
Lender. All Revolving Credit Advances shall be made by each Lender according to
its Specified Percentage. No Lender shall be relieved of its obligation to fund
its Specified Percentage of any Revolving Credit Advance notwithstanding the
fact that at any time the aggregate outstanding principal amount of all Bid
Rate Advances made by such Lender exceed its Specified Percentage of the
Commitment.
(g) Bid Rate Advances
(i) In the case of Bid Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender (which
shall promptly notify the Lenders) prior to 12:00 noon, Dallas, Texas
time, at least one Business Day prior to the proposed borrowing,
irrevocable written notice of its intention to borrow a Bid Rate
Advance. Each Bid Rate Advance request shall be subject to a
nonrefundable $500.00 processing fee payable to the Administrative
Lender by the Borrower regardless of whether such Bid Rate Advance is
funded. Such notice of borrowing shall specify (i) the requested
funding date, which shall be a Business Day, (ii) the aggregate amount
of the proposed Bid Rate Advances, (ii) the Interest Period selected
by the Borrower, provided that no Interest Period shall extend past
the Maturity Date and (iv) any other terms applicable thereto.
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Bid Rate Advances to the
Borrower as part of such proposed borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by making a
written quote to the Administrative Lender (which shall give prompt
notice thereof to the Borrower) before 9:30 a.m., Dallas, Texas time,
on the date of such proposed borrowing, setting forth the minimum
amount and maximum amount of each Bid Rate Advance which such Lender
would be willing to make as part of the proposed borrowing (which
amounts may exceed such Lender's Specified Percentage of the
Commitment) and the rate or rates of interest therefor and the
Interest Period therefor.If NationsBank of Texas, N.A. elects to offer
to make one or more Bid Rate Advances, it shall deliver its written
quote with respect to the proposed borrowing to the Borrower prior to
the Administrative Lender's receipt of any otherLender's written quote
for such proposed borrowing. The Administrative Lender shall notify
the Borrower of each written quote provided by each Lender with
respect to the proposed borrowing before
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10:00 a.m., Dallas, Texas, on the date of such proposed borrowing. If
any Lender shall elect not to make such an offer, such Lender shall so
notify the Administrative Lender before 9:30 a.m., Dallas, Texas time,
on the date of such proposed borrowing, and such Lender shall not make
any Bid Rate Advance as part of such borrowing. If any Lender shall
fail to respond to the Administrative Lender by such time, such Lender
shall be deemed to have elected not to make an offer.
(iii) The Borrower shall, in turn, before 10:30 a.m., Dallas,
Texas time, on the date of such proposed borrowing either
(A) cancel such proposed borrowing by giving the
Administrative Lender notice to that effect, or
(B) accept one or more of the offers made by any
Lender or Lenders pursuant to clause (ii) above, in its sole
discretion, by giving notice to the Administrative Lender of
the amount of each Bid Rate Advance (which amount shall be
equal to or greater than the minimum amount, and equal to or
less than the maximum amount, for which notification was given
to the Borrower by the Administrative Lender on behalf of such
Lender for such Bid Rate Advance pursuant to clause (ii)
above) to be made by each Lender as part of such borrowing,
and reject any remaining offers made by the Lenders pursuant
to clause (ii) above by giving the Administrative Lender
notice to that effect.
(iv) If the Borrower notifies the Administrative Lender that
such proposed borrowing is cancelled pursuant to clause (iii)(A)
above, the Administrative Lender shall give prompt notice thereof to
the Lenders and such borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to clause (iii)(B) above, the
Administrative Lender shall in turn promptly notify each Lender of the
date, rate of interest, and amount of each Bid Rate Advance and the
Lender making such Advance.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of each Base Rate Advance, from the date such Advance
is made until it is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) or repaid, at a
simple interest rate per annum equal to the Base Rate Basis as in
effect from time to time, provided that interest on Base Rate Advances
shall not exceed the Maximum Amount. If at any time the Base Rate
Basis would exceed the Highest Lawful Rate, interest payable on Base
Rate Advances shall be limited to the Highest Lawful Rate, but the
Base Rate Basis shall not thereafter be reduced below the Highest
Lawful Rate until
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the total amount of interest accrued on such Advances equals the
amount of interest that would have accrued if the Base Rate Basis had
been in effect at all times.
(ii) Interest on each Base Rate Advance shall be computed on
the basis of a year of 365 or 366 days, as applicable, for the number
of days actually elapsed, and shall be payable in arrears on each
Quarterly Date and on the Maturity Date.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the unpaid principal
amount of each LIBOR Advance, from the date such Advance is made until
it is due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) or repaid, at a rate per annum
equal to the LIBOR Basis for such Advance. The Administrative Lender,
whose determination shall be conclusive, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding date
and shall notify the Borrower and the Lenders of such LIBOR Basis.
(ii) Subject to Section 11.10 hereof, interest on each LIBOR
Advance shall be computed on the basis of a 360-day year for the
actual number of days elapsed, and shall be payable in arrears on the
applicable Payment Date and on the Maturity Date; provided, however,
that if the Interest Period for such Advance exceeds three months,
interest shall also be due and payable in arrears on each Quarterly
Date during such Interest Period.
(c) On Bid Rate Advances. The Borrower shall pay interest on the
outstanding unpaid principal amount of each Bid Rate Advance at a per annum
rate equal to the interest rate agreed to by the Borrower and the Lender making
such Bid Rate Advance pursuant to Section 2.2(g) hereof. Interest on each Bid
Rate Advance shall be computed and shall be payable at such times as agreed
upon between the Borrower and the Lender making such Advance pursuant to
Section 2.2(g) hereof.
(d) Interest if No Notice of Selection of LIBOR Basis or Interest
Period. If the Borrower fails to give the Administrative Lender timely notice
of its selection of a LIBOR Basis for a LIBOR Advance, or if for any reason a
determination of a LIBOR Basis for any Advance is not timely concluded due to
the fault of the Borrower, the Base Rate Basis shall apply to the applicable
Advance. If the Borrower fails to give the Administrative Lender timely notice
of its selection of an Interest Period for a LIBOR Advance, a one-month
Interest Period shall apply to the applicable Advance.
(e) Interest After an Event of Default. (i) After an Event of Default
(other than an Event of Default specified in Section 8.1(f) or (g) hereof) and
during any continuance thereof, at the option of Determining Lenders, and (ii)
after an Event of Default specified in Section 8.1(f) or (g) hereof and during
any continuance thereof, automatically and without any action by the
Administrative Lender or any Lender, the Obligations shall bear interest at
arate per annum equal to the Default Rate. Such interest shall be payable on
the earlier of demand,
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the Maturity Date or upon the occurrence of an Event of Default specified in
Section 8.1(f) or 8.1(g) hereof, immediately, and shall accrue until the
earlier of (i) waiver or cure (to the satisfaction of the Determining Lenders)
of the applicable Event of Default, (ii) agreement by the Lenders to rescind
the charging of interest at the Default Rate, or (iii) payment in full of the
Obligations. The Lenders shall not be required to accelerate the maturity of
the Advances, to exercise any other rights or remedies under the Loan
Documents, or to give notice to the Borrower of the decision to charge interest
at the Default Rate. The Lenders will undertake to notify the Borrower, after
the effective date, of the decision to charge interest at the Default Rate, but
any failure to do so will not affect the application of such rate.
Section 2.4 Fees.
(a) Commitment Fee. Subject to Section 11.10 hereof, the Borrower
agrees to pay to the Administrative Lender, for the ratable account of the
Lenders, a commitment fee on the daily average unborrowed balance of the
Commitment based on the following schedule:
<TABLE>
<CAPTION>
Applicability Per Annum
Percentage
<S> <C> <C>
(i) If the Leverage Ratio is not less than 5.0 to 1 0.3750
(ii) If the Leverage Ratio is less than 5.0 to 1 but is
not less than 3.0 to 1 0.2500
(iii) If the Leverage Ratio is less than 3.0 to 1 but is
not less than 2.0 to 1 0.1875
(iv) If the Leverage Ratio is less than 2.0 to 1 0.1250
</TABLE>
The commitment fee shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis according
to the performance of the Borrower as tested by the Leverage Ratio. Except as
set forth in the last sentence hereof, any such increase or reduction in such
fee shall be effective on the third Business Day following the date of receipt
of the applicable financial statements. If financial statements of the Borrower
setting forth the Leverage Ratio are not received by the Administrative Lender
by the date required pursuant to Section 6.1 hereof, the commitment fee shall
be determined as if the Leverage Ratio is not less than 5.0 to 1 until such
time as such financial statements are received. For the last fiscal quarter of
any fiscal year of the Borrower, the Borrower may provide its unaudited
financial statements, subject only to year-end adjustments, for the purpose of
adjusting the commitment fee. Notwithstanding anything above to the contrary,
if the compliance certificate required to be delivered pursuant to Section
7.5(b) hereof, prior to any proposed acquisition, indicates that the Leverage
Ratio after giving effect to the proposed acquisition would result in an
adjustment of the commitment fee, such fee shall be increased or decreased, as
the case may be, as of the date of such acquisition.
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<PAGE> 31
Such fees shall be (i) payable in arrears on each Quarterly Date and
the Maturity Date, fully earned when due and, subject to Section 11.10 hereof,
nonrefundable when paid and (ii) subject to Section 11.10 hereof, computed on
the basis of a year of 365 or 366 days, as applicable, for the actual number of
days elapsed. For purposes of calculating the commitment fee only, (i) undrawn
portions of Letters of Credit outstanding from time to time will reduce the
unused portion of the Commitment and (ii) outstanding Bid Rate Advances shall
not reduce the unused portion of the Commitment.
(b) Facility Fee. Subject to Section 11.10 hereof, the Borrower agrees
to pay directly to each Lender a facility fee in the amount provided for in a
facility fee letter between the Borrower and each Lender. Such fee shall be
payable on the Agreement Date, fully earned when due and, subject to Section
11.10 hereof, nonrefundable when paid.
(c) Administrative Fee. Subject to Section 11.10 hereof, the Borrower
agrees to pay to the Administrative Lender, for its account and not the account
of the Lenders, a quarterly administrative fee as provided in a fee letter
between the Borrower and the Administrative Lender.
Section 2.5 Prepayment.
(a) Voluntary Prepayments. The principal amount of any Base Rate
Advance may be prepaid in full or in part at any time, without penalty and
without regard to the Payment Date for such Advance, upon two Business Days',
and any LIBOR Advance may be prepaid, subject to the last sentence of this
Section upon three Business Days prior telephonic notice (to be promptly
followed by written notice) by an Authorized Signatory to the Administrative
Lender. LIBOR Advances may be voluntarily prepaid only so long as the Borrower
concurrently reimburses the Lenders in accordance with Section 2.9 hereof. Any
notice of prepayment shall be irrevocable.
(b) Mandatory Prepayment. On or before the date of any reduction of
the Commitment, the Borrower shall prepay applicable outstanding Advances in an
amount necessary to reduce the sum of outstanding Advances and Reimbursement
Obligations to an amount less than or equal to the Commitment as so reduced.
The Borrower shall first prepay all Base Rate Advances, shall thereafter prepay
LIBOR Advances, and finally prepay Bid Rate Advances. To the extent that any
prepayment requires that a LIBOR Advance be repaid on a date other than the
last day of its Interest Period, the Borrower shall reimburse each Lender in
accordance with Section 2.9 hereof.
(c) Prepayments from Sales of Assets and Equity. Concurrently with the
receipt of Net Cash Proceeds from the sale or disposition by the Borrower or
any Restricted Subsidiary of (i) any (A) asset in which the Net Cash Proceeds
from the sale or disposition thereof exceeds $100,000 and (B) assets sold or
disposed of during any fiscal year in which the aggregate Net Cash Proceeds
previously received during such fiscal year from sales or dispositions of all
assets exceeds $1,000,000, the Borrower shall first prepay all Base Rate
Advances, shall thereafter
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<PAGE> 32
prepay LIBOR Advances, and finally prepay Bid Rate Advances in a principal
amount equal to (y) in the case of clause (A) above, all Net Cash Proceeds from
such sale or disposition and (z) in the case of clause (B) above, the amount
that the aggregate Net Cash Proceeds received during any such fiscal year
exceeds $1,000,000, or (ii) any Equity, the Borrower shall prepay Advances in a
principal amount by which 50% of the aggregate Net Cash Proceeds received by
the Borrower and its Restricted Subsidiaries after the Agreement Date from the
sale or disposition of Equity exceed $100,000,000.
(d) Prepayments from Issuance of Institutional Debt. Concurrently with
the receipt of Net Cash Proceeds from the issuance of Institutional Debt by the
Borrower, the Borrower shall prepay first all Base Rate Advances, shall
thereafter prepay LIBOR Advances, and finally prepay Bid Rate Advances in a
principal amount equal to such Net Cash Proceeds.
(e) Prepayments, Generally. Any prepayment of an Advance shall be
accompanied by interest accrued on the principal amount being prepaid. Any
voluntary partial prepayment of a Base Rate Advance shall be in a principal
amount which is at least $1,000,000 and which is an integral multiple of
$100,000. Any voluntary partial prepayment of a LIBOR Advance shall be in a
principal amount which is at least $1,000,000 and which is an integral multiple
of $100,000, and to the extent that any prepayment of a LIBOR Advance is made
on a date other than the last day of its Interest Period, the Borrower shall
reimburse each Lender in accordance with Section 2.9 hereof. Following the
Amortization Date, prepayments shall be applied to the mandatory reductions of
the Commitment pursuant to Section 2.6(c) hereof in inverse order.
Section 2.6 Reduction and Change of Commitment.
(a) Voluntary Reduction. The Borrower shall have the right, upon not
less than 3 Business Days' notice (provided no notice shall be required for a
termination in whole of the Commitment) by an Authorized Signatory to the
Administrative Lender (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify
the Lenders, to terminate or reduce the Commitment, in whole or in part. Each
partial termination shall be in an aggregate amount which is at least
$5,000,000 and which is an integral multiple of $100,000, and no voluntary
reduction in the Commitment shall cause any LIBOR Advance to be repaid prior to
the last day of its Interest Period. Notwithstanding anything hereinto the
contrary, in no event shall the Borrower have the right to reduce the
Commitment to an amount less than the aggregate outstanding Reimbursement
Obligations.
(b) Mandatory Reduction. The Commitment shall be automatically reduced
(i) by the amount of any amount prepaid or required to be prepaid pursuant to
Section2.5(b) hereof, (ii) if a Default or Event of Default exists or would
exist as a result of the sale or disposition of assets, by the amount of
aggregate Net Cash Proceeds received by the Borrower and its Subsidiaries after
the Agreement Date from the sale and disposition of assets referred to in
Section2.5(c) hereof and which are required to be used to prepay Advances as
provided therein, (iii) if a Default or Event of Default exists, by the amount
of aggregate Net Cash Proceeds received by the Borrower and its Subsidiaries
after the Agreement Date from the sale or disposition of
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<PAGE> 33
Equity referred to in Section 2.5(c) hereof, and (iv) if a Default or Event or
Default exists or would exist as a result of the issuance of Institutional
Debt, by the amount of any amount prepaid or required to be prepaid pursuant to
Section 2.5(d) hereof. Notwithstanding anything herein to the contrary, in no
event shall the Borrower reduce the Commitment to an amount less than the
aggregate outstanding Reimbursement Obligations.
(c) Amortization. On each Quarterly Date, commencing on the
Amortization Date, through the last Business Day of September 2003, the
Commitment outstanding on the Amortization Date shall automatically reduce by
an amount equal to one-fourth (or, in the case of calendar year 1998, the full
reduction percentage, and in the case of calendar year 2003, one-third) of the
percentage reduction that the Commitment is to reduce in the calendar year in
which such Quarterly Date falls pursuant to the table below. Notwithstanding
the foregoing, on the Maturity Date, the Commitment shall automatically reduce
to zero.
<TABLE>
<CAPTION>
Calendar Year % Reduction
<S> <C>
1998 2.5%
1999 11.25%
2000 17.50%
2001 25.00%
2002 25.00%
2003 18.75%
</TABLE>
(d) General Requirements. Upon any reduction of the Commitment
pursuant to Section 2.6(b), the Borrower shall immediately make a repayment of
applicable Advances in accordance with Section 2.5(b) hereof. The Borrower
shall reimburse each Lender for any loss or out-of-pocket expense incurred by
each Lender in connection with any such payment, as set forth in Section2.9
hereof. The Borrower shall not have any right to rescind any termination or
reduction. Once reduced, the Commitment may not be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Lender. Unless
the Administrative Lender shall have been notified by a Lender prior to the
date of any proposed Revolving Credit Advance (which notice shall be effective
upon receipt) that such Lender does not intend to make the proceeds of such
Revolving Credit Advance available to the Administrative Lender, the
Administrative Lender may assume that such Lender has made such proceeds
available to the Administrative Lender on such date, and the Administrative
Lender may in reliance upon such assumption (but shall not be required to) make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Lender by such Lender, the
Administrative Lender shall be entitled to
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<PAGE> 34
recover such amount on demand from such Lender (or, if such Lender fails to pay
such amount forthwith upon such demand, from the Borrower) together with
interest thereon in respect of each day during the period commencing on the
date such amount was available to the Borrower and ending on (but excluding)
the date the Administrative Lender receives such amount from the Lender, with
interest thereon if paid by such Lender,at a per annum rate equal to the
Federal Funds Rate, and if paid by Borrower, at the applicable Base Rate. No
Lender shall be liable for any other Lender's failure to fund a Revolving
Credit Advance hereunder.
Section 2.8 Payment of Principal of Advances. The Borrower agrees to
pay the principal amount of the Advances to the Administrative Lender for the
account of the Lenders as follows:
(a) End of Interest Period. The principal amount of each Advance
hereunder shall be due and payable on its Payment Date, which principal payment
may be made by means of a Refinancing Advance.
(b) Commitment Reduction. On the date of reduction of the Commitment
pursuant to Section 2.6 hereof, including the Maturity Date, the aggregate
amount of the Advances outstanding on such date of reduction in excess of the
Commitment as reduced minus all outstanding Reimbursement Obligations shall be
due and payable, which principal payment may not be made by means of
Refinancing Advances.
(c) Maturity Date. The principal amount of the Advances, all accrued
interest and fees thereon, and allother Obligations, shall be due and payable
in full on the Maturity Date.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur
any losses or reasonable outofpocket expenses in connection with (a) failure by
the Borrower to borrow any LIBOR Advance or Bid Rate Advance which is at a
fixed rate after having given notice of its intention to borrow in accordance
with Section 2.2 hereof (whether by reason of the Borrower's election not to
proceed or the nonfulfillment of any of the conditions set forth in Article 3
hereof), or (b) any prepayment for any reason of any LIBOR Advance in whole or
in part (including a prepayment pursuant to Sections 2.5(c), 2.5(d) and 9.3(b)
hereof), the Borrower agrees to pay to any such Lender, upon its demand, an
amount sufficient to compensate such Lender for all such losses and
out-of-pocket expenses. Such Lender's good faith determination of the amount of
such losses or out-of-pocket expenses, calculated in its usual fashion, absent
manifest error, shall be binding and conclusive. Such losses shall include,
without limiting the generality of the foregoing, lost profits and reasonable
expenses incurred by such Lender in connection with the re-employment of funds
prepaid, repaid, converted or not borrowed, converted or paid, as the case may
be. Upon request of the Borrower, such Lender shall provide a certificate
setting forth the amount to be paid to it by the Borrower hereunder and
calculations therefor.
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<PAGE> 35
Section 2.10 Manner of Payment.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Advances, fees, and any other amount owed under
this Agreement or any other Loan Document shall be made not later than 1:00
p.m. (Dallas, Texas time) on the date specified for payment under this
Agreement to the Administrative Lender at the Administrative Lender's office,
in lawful money of the United States of America constituting immediately
available funds.
(b) If any payment under this Agreement or any other Loan Document
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business Day, unless such
Business Day falls in another calendar month, in which case payment shall be
made on the preceding Business Day. Any extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(c) The Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever. (d) Each payment by the Borrower in
respect of obligations relating to the Revolving Credit Advance and the Letters
of Credit (whether for principal, interest, fees or otherwise) shall be made to
the Administrative Lender for the account of the Lenders pro rata in accordance
with their respective Specified Percentages. Each payment by the Borrower in
respect of obligations related to Bid Rate Advances (whether for principal,
interest, fees or otherwise) shall be made to the Administrative Lender for the
account of each Lender holding such Bid Rate Advance. Notwithstanding anything
in this Section 2.10(d) or any other provision of this Agreement or any other
Loan Document to the contrary, any payment by the Borrower in respect of any
Advances after acceleration of the Advances pursuant to Section 8.2 or any
monies received by the Administrative Lender as a result of the exercise of
remedies under any Loan Documents after acceleration of the Advances pursuant
to Section 8.2 shall be distributed pro rata to each Lender based on the
percentage that the outstanding Advances and Reimbursement Obligations owed to
such Lender bears to the aggregate Advances and Reimbursement Obligations owed
to all Lenders after the payment of the Administrative Lender's expenses
incurred on behalf of the Lenders then due and payable.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in Schedule 1 attached hereto.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer (except any such transfer which is made by a Lender
pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose of
complying with Applicable Law). Increased costs for
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<PAGE> 36
expenses resulting from a change in law occurring subsequent to any such
designation or transfer shall be deemed not to result solely from such
designation or transfer.
Section 2.12 Sharing of Payments. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of setoff,
or otherwise) on account of its Revolving Credit Advances in excess of its
Specified Percentage of all payments made by the Borrower with respect to
Revolving Credit Advances shall purchase from each other Lender such
participation in the Revolving Credit Advances made by such other Lender as
shall be necessary to cause such purchasing Lender to share the excess payment
pro rata according to Specified Percentages with each other Lender which is not
in default of its obligations hereunder with respect to such Revolving Credit
Advance; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest, provided, further that after an Event of Default, such
payments will be shared pro rata among all Lenders based on the total amount of
all Advances outstanding. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section, to the fullest
extent permitted by law, may exercise all its rights of payment (including the
right of set off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
Section 2.13 Calculation of LIBOR Rate. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 Booking Loans. Any Lender may make, carry or transfer
Advances at, to or for the account of any of its branch offices or the office
of any Affiliate.
Section 2.15 Taxes.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Lender, taxes imposed on its overall net
income, and franchise taxes imposed on it (including interest and penalties
imposed thereon), by the jurisdiction under the laws of which such Lender or
the Administrative Lender (as the case may be) is organized or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender or the Administrative
Lender, (x) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.15) such Lender or the
Administrative Lender (as the case may be) receives an amount equal to the sum
it would have
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<PAGE> 37
received had no such deductions been made, (y) the Borrower shall make such
deductions and (z) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with Applicable
Law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Lender for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative
Lender (as the case may be) and all liabilities (including penalties, additions
to tax, interest and reasonable expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted, other than penalties, additions to tax, interest and expenses arising
as a result of gross negligence on the part of such Lender or the
Administrative Lender, provided, however, that the Borrower shall have no
obligation to indemnify such Lender or the Administrative Lender (i) unless
notice has been given by such Lender or the Administrative Lender, as
applicable, in a time sufficient to afford the Borrower, in good faith, a
reasonable opportunity to contest such payment by such Lender or the
Administrative Lender, provided such opportunity to contest exists under
Applicable Law, and (ii) until such Lender or the Administrative Lender shall
have delivered to the Borrower a certificate setting forth in reasonable detail
the basis of the Borrower's obligation to indemnify such Lender or the
Administrative Lender pursuant to this Section 2.15. This indemnification shall
be made within 30 days from the date such Lender or the Administrative Lender
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Lender the original or a certified
copy of a receipt evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder, the Borrower will furnish to the
Administrative Lender a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Administrative Lender, in either case
stating that such payment is exempt from or not subject to Taxes, provided,
however, that such certificate or opinion need only be given if: (i) the
Borrower makes any payment from any account located outside the United States,
or (ii) the payment is made by a payor that is not a United States Person. For
purposes of this Section 2.15 the terms "United States" and "United States
Person" shall have the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees
that:
(i) it shall, no later than the Agreement Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section
11.06 after the Agreement Date, the date upon
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<PAGE> 38
which such Lender becomes a party hereto) deliver to the Borrower through the
Administrative Lender, with a copy to the Administrative Lender:
(A) if any lending office is located in the United States of
America, two (2) accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"),
(B) if any lending office is located outside the United States
of America, two (2) accurate and complete signed originals of Internal
Revenue Service Form 1001 or any successor thereto ("Form 1001").
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the account of
such lending office or lending offices under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time or
reasonably promptly thereafter but only to the extent the forms previously
delivered by it hereunder are no longer effective, deliver to the Borrower
through the Administrative Lender, with a copy to the Administrative Lender, in
replacement for the forms previously delivered by it hereunder:
(A) if such changed or additional lending office is located in
the United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals
of Form 1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the account of
such changed or additional lending office under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause (ii)
above) requiring a change in the most recent Form 4224 or Form 1001 previously
delivered by such Lender and if the delivery of the same be lawful, deliver to
the Borrower through the Administrative Lender with a copy to the
Administrative Lender, two (2) accurate and complete original signed copies of
Form 4224 or Form 1001 in replacement for the forms previously delivered by
such Lender; and
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation as
may be required from time
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<PAGE> 39
to time by any applicable law, treaty, rule or regulation in order to establish
such Lender's tax status for withholding purposes.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the payment in full of principal and interest
hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.15 shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender.
(h) Each Lender (and the Administrative Lender with respect to
payments to the Administrative Lender for its own account) agrees that (i) it
will take all reasonable actions by all usual means to maintain all exemptions,
if any, available to it from United States withholding taxes (whether available
by treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; provided,
however, the Lenders and the Administrative Lender shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Section 2.16 Letters of Credit.
(a) The Letter of Credit Facility. The Borrower may request the Issuing
Bank, on the terms and conditions hereinafter set forth, to issue, and the
Issuing Bank shall, if so requested, issue, letters of credit (the "Letters of
Credit") for the account of the Borrower from time to time on any Business Day
from the date of the initial Advance until the Maturity Date in an aggregate
maximum amount (assuming compliance with all conditions to drawing) not to
exceed at any time outstanding the lesser of (i) $100,000,000 (the "Letter of
Credit Facility"), and (ii) the difference of (A) the Commitment minus (B)the
aggregate principal amount of Advances then outstanding. No Letter of Credit
shall have an expiration date (including all rights of renewal) later than the
earlier of (i) the Maturity Date or (ii) one year after the date of issuance
thereof. Immediately upon the issuance of each Letter of Credit, the Issuing
Bank shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed to have purchased and received from the Issuing Bank, in
each case irrevocably and without any further action by any party, an undivided
interest and participation in such Letter of Credit, each drawing thereunder and
the obligations of the Borrower under this Agreement in respect thereof in an
amount equal to the product of (i) such Lender's Specified Percentage of the
Commitment times (ii) the maximum amount available to be drawn under such Letter
of Credit (assuming compliance with all conditions to drawing). Within the
limits of the Letter of Credit Facility, and subject to the limits referred to
above, the Borrower may request the issuance of Letters of
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Credit under this Section 2.16(a), repay any Advances resulting from drawings
thereunder pursuant to Section 2.16(c) and request the issuance of additional
Letters of Credit under this Section 2.16(a). During the term of this
Agreement, provided that no Default or Event of Default then exists and subject
to the same conditions for the issuance of a Letter of Credit set forth in
Section 3.2 hereof, the Issuing Bank may at Borrowerns option, automatically
renew any expiring Letters of Credit for a period of time not to exceed the
earlier of (x)five (5) days prior to the Maturity Date or (y) one year after
the date of issuance thereof.
(b) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (Dallas time) on the third Business
Day prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to the Issuing Bank, which shall give to the Administrative Lender and
each Lender prompt notice thereof by telex, telecopier or cable. Each Letter of
Credit shall be issued upon notice given in accordance with the terms of any
separate agreement between the Borrower and the Issuing Bank in form and
substance reasonably satisfactory to the Borrower and the Issuing Bank
providing for the issuance of Letters of Credit pursuant to this Agreement and
containing terms and conditions not inconsistent with this Agreement (a "Letter
of Credit Agreement"), provided that if any such terms and conditions are
inconsistent with this Agreement, this Agreement shall control. Each such
notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telex, telecopier or cable, specifying therein, the requested (A) date of such
issuance (which shall be a Business Day), (B) maximum amount of such Letter of
Credit, (C) expiration date of such Letter of Credit, (D) name and address of
the beneficiary of such Letter of Credit, (E) form of such Letter of Credit and
(F) such other information as shall be required pursuant to the relevant Letter
of Credit Agreement. If the requested terms of such Letter of Credit are
acceptable to the Issuing Bank in its reasonable discretion, the Issuing Bank
shall, subject to this Section 2.16(b), upon fulfillment of the applicable
conditions set forth in Article 3 hereof, make such Letter of Credit available
to the Borrower at its office referred to in Section 11.1 or as otherwise
agreed with the Borrower in connection with such issuance.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Revolving Credit Advance,
which shall bear interest at the applicable Base Rate Basis, in the amount of
such draft (but without any requirement for compliance with the conditions set
forth in Article 3 hereof). In the event that a drawing under any Letter of
Credit is not reimbursed by the Borrower by 11:00 A.M. (Dallas time) on the
first Business Day after such drawing, the Issuing Bank shall promptly notify
Administrative Lender and each other Lender. Each such Lender shall, on the
first Business Day following such notification, make an Revolving Credit
Advance, which shall bear interest at the applicable Base Rate Basis, and shall
be used to repay the applicable portion of the Issuing Bank's Revolving Credit
Advance with respect to such Letter of Credit, in an amount equal to the amount
of its participation in such drawing for application to reimburse the Issuing
Bank (but without any requirement for compliance with the applicable conditions
set forth in Article 3 hereof) and shall make available to the Administrative
Lender for the account of the Issuing Bank, by deposit at the Administrative
Lender's office, in same day funds, the amount of such Revolving Credit
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Advance. In the event that any Lender fails to make available to the
Administrative Lender for the account of the Issuing Bank the amount of such
Revolving Credit Advance, the Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest thereon at a rate per
annum equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal
Funds Rate.
(d) Increased Costs. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit or guarantees issued by, or assets held by, or deposits in or for the
account of, the Issuing Bank or any Lender or (ii) impose on the Issuing Bank
or any Lender any other condition regarding this Agreement or such Lender or
any Letter of Credit, and the result of any event referred to in the preceding
clause (i) or (ii) shall be, in the reasonable opinion of the Issuing Bank or
any Lender, to increase the cost to the Issuing Bank of issuing or maintaining
any Letter of Credit or to any Lender of purchasing any participation therein
or making any Advance pursuant to Section 2.16(c) ("Increased Letter of Credit
Costs"), then, upon demand by the Issuing Bank or such Lender, the Borrower
shall, subject to Section 11.10 hereof, pay to the Issuing Bank or such Lender,
from time to time as specified by the Issuing Bank or such Lender, additional
amounts that shall be sufficient to compensate the Issuing Bank or such Lender
for such Increased Letter of Credit Costs. Notwithstanding the foregoing, any
demand for Increased Letter of Credit Costs shall not include any Letter of
Credit costs with respect to any period more than 180 days prior to the date
that the Issuing Bank or any Lender gives notice to the Borrower of such
Increased Letter of Credit Costs unless the effective date of the condition
which results in the right to received Increased Letter of Credit Costs is
retroactive (the "Increased Letter of Credit Costs Retroactive Effective
Date"). If any Increased Letter of Credit Costs has an Increased Costs Letter
of Credit Retroactive Effective Date and the Issuing Bank or any Lender demands
compensation within 180 days after the date setting the Increased Letter of
Credit Costs Effective Date (the "Increased Letter of Credit Costs Set Date"),
the Issuing Bank or such Lender, as appropriate, shall have the right to
receive such Increased Letter of Credit Costs from the Increased Letter of
Credit Retroactive Effective Date. If the Issuing Bank or a Lender does not
demand such Increased Letter of Credit Costs within 180 days after the
Increased Letter of Credit Costs Set Date, the Issuing Bank or such Lender, as
appropriate, may not receive payment of Increased Letter of Credit Costs with
respect to any period more than 180 days prior to such demand. A certificate as
to the amount of such increased cost, submitted to the Borrower by the Issuing
Bank or such Lender, shall include in reasonable detail the basis for the
demand for additional compensation and shall be conclusive and binding for all
purposes, absent demonstrable error. The obligations of the Borrower under this
Section 2.16(d) shall survive termination of this Agreement. The Issuing Bank
or any Lender claiming any additional compensation under this Section 2.16(d)
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to reduce or eliminate any such additional compensation which may
thereafter accrue and which efforts would not, in the sole discretion of the
Issuing Bank or such Lender, be otherwise disadvantageous.
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(e) Obligations Absolute. The obligations of the Borrower under this
Agreement with respect to any Letter of Credit, any Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of Credit or any
Advance pursuant to Section 2.16(c) shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any other Loan Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "L/C Related Documents");
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in
respect of the Letters of Credit or any Revolving Credit Advance
pursuant to Section 2.16(c) or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set- off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C Related
Documents or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, except to the extent that any payment by
the Issuing Bank against any such statement or other document shall be
as a result of the Issuing Bank's gross negligence or willful
misconduct;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit, except for any payment made
upon the Issuing Bank's gross negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any
Collateral, or any release or amendment or waiver of or consent to
departure from any Subsidiary Guaranty or any other guarantee, for all
or any of the Obligations of the Borrower in respect of the Letters of
Credit or any Revolving Credit Advance pursuant to Section2.16(c); or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor, other
than the Issuing's Bank gross negligence or wilful misconduct.
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(f) Compensation for Letters of Credit.
(i) Credit Fees. Subject to Section 11.9 hereof, the Borrower
shall pay to the Administrative Lender for the account of each Lender
a credit fee (which shall be payable quarterly in arrears on each
Quarterly Date and on the Maturity Date) on the average daily amount
available for drawing under all outstanding Letters of Credit
(computed, subject to Section 11.10 hereof, on the basis of a 365-day
year for the actual number of days elapsed) at the following per annum
percentages, applicable in the following situations:
<TABLE>
<CAPTION>
Applicability Percentage
<S> <C>
(i) If the Leverage Ratio is not less than 5.0 to 1 1.2500
(ii) If the Leverage Ratio is less than 5.0 to 1 but is not
less than 4.5 to 1 1.2500
(iii) If the Leverage Ratio is less than 4.5 to 1 but is not
less than 4.0 to 1 0.7500
(iv) If the Leverage Ratio is less than 4.0 to 1 but is not
less than 3.5 to 1 0.6250
(v) If the Leverage Ratio is less than 3.5 to 1 but is not
less than 3.0 to 1 0.5000
(vi) If the Leverage Ratio is less than 3.0 to 1 but is not
less than 2.0 to 1 0.4375
(vii) If the Leverage Ratio is
less than 2.0 to 1 0.3750
</TABLE>
(ii) Adjustment of Credit Fee. The credit fee payable in
respect of the Letters of Credit shall be subject to reduction or
increase, as applicable and as set forth in the table in (i) above, on
a quarterly basis according to the performance of the Borrower as
tested by the Leverage Ratio. Except as set forth in the last sentence
hereof, any such increase or reduction in such fee shall be effective
on the third Business Day following the date of receipt of the
applicable financial statements. If financial statements of the
Borrower setting forth the Leverage Ratio are not received by the
Administrative Lender by the date required pursuant to Section 6.1
hereof, the fee payable in respect of the Letters of Credit shall be
determined as if the Leverage Ratio is not less than 5.0 to 1 until
such time as such financial statements are received. For the last
fiscal quarter of any fiscal year of the Borrower, the Borrower may
provide its unaudited financial statements, subject only to year-end
adjustments, for the purpose of adjusting the Letter of Credit fee.
Notwithstanding anything above to the contrary, if the compliance
certificate required to be delivered pursuant to Section 7.5(b)
hereof, prior to any proposed acquisition, indicates that the Leverage
Ratio after giving effect to the proposed acquisition would result in
an
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<PAGE> 44
adjustment of the Letter of Credit fee, such fee shall be increased or
decreased, as the case may be, as of the date of such acquisition.
(iii) Issuance Fee. Subject to Section 11.10 hereof, the
Borrower shall pay to the Administrative Lender, for the sole account
of the Issuing Bank, an issuance fee of $500 on the date of issuance
of each Letter of Credit.
(g) L/C Cash Collateral Account.
(i) Upon the occurrence of an Event of Default and demand by
the Administrative Lender pursuant to Section 8.2(c), other than an
Event of Default pursuant to Section 8.1(f) or 8.1(g) hereof upon such
event the referenced sums will become immediately due and payable
without further action by the Administrative Lender, the Borrower will
promptly pay to the Administrative Lender in immediately available
funds an amount equal to 100% of the maximum amount then available to
be drawn under the Letters of Credit then outstanding. Any amounts so
received by the Administrative Lender shall be deposited by the
Administrative Lender in a deposit account maintained by the Issuing
Bank (the "L/C Cash Collateral Account").
(ii) As security for the payment of all Reimbursement
Obligations and for any other Obligations, the Borrower hereby grants,
conveys, assigns, pledges, sets over and transfers to the
Administrative Lender (for the benefit of the Issuing Bank and
Lenders), and creates in the Administrative Lender's favor (for the
benefit of the Issuing Bank and Lenders) a Lien in, all money,
instruments and securities at any time held in or acquired in
connection with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be under the
sole dominion and control of the Administrative Lender and the
Borrower shall have no right to withdraw or to cause the
Administrative Lender to withdraw any funds deposited in the L/C Cash
Collateral Account except as otherwise provided in Section
2.16(g)(iii). At any time and from time to time, upon the
Administrative Lender's request, the Borrower promptly shall execute
and deliver any and all such further instruments and documents,
including UCC financing statements, as may be necessary, appropriate
or desirable in the Administrative Lender's judgment to obtain the
full benefits (including perfection and priority) of the security
interest created or intended to be created by this paragraph (ii) and
of the rights and powers herein granted. The Borrower shall not create
or suffer to exist any Lien on any amounts or investments held in the
L/C Cash Collateral Account other than the Lien granted under this
paragraph (ii) and Liens arising by operation of Law and not by
contract which secure amounts not yet due and payable.
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<PAGE> 45
(iii) The Administrative Lender shall (A) apply any funds in
the L/C Cash Collateral Account on account of Reimbursement
Obligations when the same become due and payable if and to the extent
that the Borrower shall fail directly to pay such Reimbursement
Obligations, (B) after the Maturity Date, apply any proceeds remaining
in the L/C Cash Collateral Account first to pay any unpaid Obligations
then outstanding hereunder and then to refund any remaining amount to
the Borrower, and (C) provided no Default or Event of Default shall be
in existence, return any funds in the L/C Cash Collateral Account to
the Borrower.
(iv) The Borrower, no more than once in any calendar month,
may direct the Administrative Lender to invest the funds held in the
L/C Cash Collateral Account (so long as the aggregate amount of such
funds exceeds any relevant minimum investment requirement) in (A)
direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof and
(B) one or more other types of investments permitted by the
Determining Lenders, in each case with such maturities as the
Borrower, with the consent of the Determining Lenders, may specify,
pending application of such funds on account of Reimbursement
Obligations or on account of other Obligations, as the case may be. In
the absence of any such direction from the Borrower, the
Administrative Lender shall invest the funds held in the L/C Cash
Collateral Account (so long as the aggregate amount of such funds
exceeds any relevant minimum investment requirement) in one or more
types of investments with the consent of the Determining Lenders with
such maturities as the Borrower, with the consent of the Determining
Lenders, may specify, pending application of such funds on account of
Reimbursement Obligations or on account of other Obligations, as the
case may be. All such investments shall be made in the Administrative
Lender's name for the account of the Lenders. The Borrower recognizes
that any losses or taxes with respect to such investments shall be
borne solely by the Borrower, and the Borrower agrees to hold the
Administrative Lender and the Lenders harmless from any and all such
losses and taxes. Administrative Lender may liquidate any investment
held in the L/C Cash Collateral Account in order to apply the proceeds
of such investment on account of the Reimbursement Obligations (or on
account of any other Obligation then due and payable, as the case may
be) without regard to whether such investment has matured and without
liability for any penalty or other fee incurred (with respect to which
the Borrower hereby agrees to reimburse the Administrative Lender) as
a result of such application.
(v) The Borrower shall pay to the Administrative Lender the
fees customarily charged by the Issuing Bank with respect to the
maintenance of accounts similar to the L/C Cash Collateral Account in
an amount not to exceed $1,000 in aggregate per calendar year.
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<PAGE> 46
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Closing and the Initial Advance
and the Letter of Credit. The obligation of each Lender to sign this Agreement
and to make the initial Advance and the obligation of the Issuing Bank to issue
the initial Letter of Credit is subject to receipt by the Administrative Lender
of each of the following, in form and substance satisfactory to the
Administrative Lender, with a copy (except for the notes) for each Lender:
(a) a loan certificate of the Borrower certifying as to the accuracy
of its representations and warranties in the Loan Documents, certifying that no
Default or Material Adverse Effect, except as listed in Schedule 11 hereto, has
occurred since the last financial statements delivered to the Lenders prior to
the Agreement Date, certifying Borrower is in compliance with all covenants in
the Agreement, and including a certificate of incumbency with respect to each
Authorized Signatory, and including (i) a copy of the Articles of Incorporation
of the Borrower, certified to be true, complete and correct by the secretary of
state of its state of incorporation, (ii) a copy of the By-Laws of the
Borrower, as in effect on the Agreement Date, (iii) a copy of the resolutions
of the Borrower authorizing it to execute, deliver and perform this Agreement,
the Revolving Credit Notes, the Bid Rate Notes, and the other Loan Documents to
which it is a party, and (iv) a copy of a certificate of goodstanding and a
certificate of existence for its state of incorporation and each state in which
it is or should be qualified to do business;
(b) a certificate of an officer acceptable to the Lenders of each
Restricted Subsidiary, certifying as to the incumbency of the officers signing
the Loan Documents to which it is a party, and including (i) a copy of its
Articles of Incorporation, certified as true, complete and correct by the
secretary of state of its state of incorporation, (ii) a copy of its By-Laws,
as in effect on the Agreement Date, (iii) a copy of the resolutions authorizing
it to execute, deliver and perform the Loan Documents to which it is a party,
and (iv) a copy of a certificate of good standing and a certificate of
existence for its state of incorporation and each state in which it is or
should be qualified to do business;
(c) duly executed Revolving Credit Notes, payable to the order of each
Lender and in an amount for each Lender equal to its Specified Percentage of
the Commitment;
(d) duly executed Bid Rate Notes, payable to the order of each Lender
in the principal amount of $300,000,000;
(e) a duly executed and completed Borrower Pledge Agreement, dated as
of the Agreement Date, granting the Lenders a lien and security interest in (i)
the Pledged Stock owned directly by the Borrower and (ii) the Holdings Note;
(f) duly executed and completed Subsidiary Pledge Agreements, dated as
of the Agreement Date, granting the Lenders a lien and security interest in the
(i) Pledged Stock owned
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<PAGE> 47
directly by Holdings, Radio Licenses, Television Licenses, Metroplex Licenses
and CCR HoustonNevada, and (ii) the Intercompany Notes (other than the Holdings
Note);
(g) the Pledged Stock, together with stock powers duly executed in
blank;
(h) the Intercompany Notes, duly endorsed;
(i) a duly executed and completed Subsidiary Guaranty, dated as of the
Agreement Date executed by Holdings, Management, Memphis, Radio Licenses,
Television Licenses, Metroplex Licenses, Radio, Television, Metroplex, CCRE,
CCR Houston-Nevada and Productions;
(j) an opinion of counsel and of FCC counsel to the Borrower and its
Restricted Subsidiaries addressed to the Lenders and in form and substance
satisfactory to the Lenders, dated the Agreement Date; (k) copies of insurance
binders or certificates covering the assets of the Borrower and its
Subsidiaries, and meeting the requirements of Section 5.5 hereof;
(l) reimbursement for Administrative Lender for Special Counsel's
reasonable fees and expenses rendered through the date hereof;
(m) evidence that all corporate proceedings of the Borrower and its
Restricted Subsidiaries taken in connection with the transactions contemplated
by this Agreement and the other Loan Documents shall be reasonably satisfactory
in form and substance to the Lenders and Special Counsel; and the Lenders shall
have received copies of all documents or other evidence which the
Administrative Lender, Special Counsel or any Lender may reasonably request in
connection with such transactions;
(n) copies of the following consolidated and consolidating financial
statements for the Borrower and its Subsidiaries, as of and for the period
ended June 30, 1995: (i) consolidated and consolidating balance sheets as of
the end of such period, and (ii) consolidated and consolidating statements of
income and changes in cash for such period; which financial statements shall
set forth in comparative form figures for the corresponding periods in the
previous fiscal year, all in reasonable detail and certified by an Authorized
Signatory to the best of his knowledge to be complete and correct and prepared
in accordance with GAAP (other than footnotes thereto), subject to year-end
adjustment;
(o) the facility fee for the account of each Lender as required
pursuant to Section 2.4(b) hereof;
(p) all Indebtedness owing by the Borrower under the Existing Credit
Agreement shall have been refinanced in full; and
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<PAGE> 48
(q) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation the status,
organization or authority of the Borrower or any Restricted Subsidiary, and the
enforceability of and security for the Obligation.
Section 3.2 Conditions Precedent to All Advances and Letters of
Credit. The obligation of each Lender to make each Advance (including the
initial Advance) and the obligation of the Issuing Bank to issue each Letter of
Credit (including the initial Letter of Credit) hereunder is subject to
fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance or issuance:
(a) With respect to Advances (other than Refinancing Advances that are
Refinancing Advances of Revolving Credit Advances) and each issuance of aLetter
of Credit, all of the representations and warranties of the Borrower under this
Agreement, which, pursuant to Section 4.2 hereof, are made at and as of the
time of such Advance or issuance, shall be true and correct at such time inall
material respects, both before and after giving effect to the application of
the proceeds of the Advance or issuance;
(b) The incumbency of the Authorized Signatories shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to Section 3.1(a) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Lender. The Lenders
may, without waiving this condition, consider it fulfilled and a representation
by the Borrower made to such effect if no written notice to the contrary, dated
on or before the date of such Advance or issuance, is received by the
Administrative Lender from the Borrower prior to the making of such Advance or
issuance;
(c) There shall not exist a Default hereunder, with respect to
Advances (other than Refinancing Advances that are Refinancing Advances of
Revolving Credit Advances) and with respect to issuance of each Letter of
Credit, or an Event of Default, with respect to any Refinancing Advance, and,
with respect to each Advance (other than a Refinancing Advance that is a
Refinancing Advances of a Revolving Credit Advance) and with respect to
issuance of each Letter of Credit, the Administrative Lender shall have
received written or telephonic certification thereof by an Authorized Signatory
(which certification, if telephonic, shall be followed promptly by written
certification);
(d) The aggregate Advances and amount available for draws under
Letters of Credit, after giving effect to such proposed Advance or Letter of
Credit, shall not exceed the maximum principal amount then permitted to be
outstanding hereunder; and
(e) The Administrative Lender shall have received all such other
certificates, reports, statements or other documents as the Administrative
Lender or any Lender may reasonably request.
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<PAGE> 49
Each request by the Borrower to the Administrative Lender or the
Issuing Bank, as appropriate, for an Advance or the issuance of a Letter of
Credit shall constitute a representation and warranty by the Borrower as of the
date of the making of such Advance or the issuance of such Letter of Credit
that all the conditions contained in this Section 3.2 have been satisfied.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby
represents and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date, (i)
the respective jurisdictions of incorporation and percentage ownership by the
Borrower or another Subsidiary of the Subsidiaries listed on Schedule 7 are
true and correct and (ii) all Subsidiaries are Restricted Subsidiaries. Each of
the Borrower and its Restricted Subsidiaries is a corporation or partnership
duly organized, validly existing and in good standing under the laws of its
state of organization. Each of the Borrower and its Restricted Subsidiaries has
the corporate or organizational power and authority to own its properties and
to carry on its business as now being and hereafter proposed to be conducted.
Each of the Borrower and its Restricted Subsidiaries is duly qualified, in good
standing and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization.
(b) Authorization. The Borrower has corporate power and has taken all
necessary corporate action to authorize it to borrow hereunder. Each of the
Borrower and its Restricted Subsidiaries has corporate power and has taken all
necessary corporate action to execute, deliver and perform the Loan Documents
to which it is party in accordance with the terms thereof, and to consummate
the transactions contemplated thereby. Each Loan Document has been duly
executed and delivered by the Borrower or the Restricted Subsidiary executing
it. Each of the Loan Documents to which the Borrower and its Restricted
Subsidiaries are party is a legal, valid and binding respective obligation of
the Borrower or the Restricted Subsidiary, as applicable, enforceable in
accordance with its terms, subject, to enforcement of remedies, to the
following qualifications: (i) equitable principles generally, and (ii)
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to the bankruptcy, insolvency or similar event of the
Borrower or any Restricted Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance by the Borrower and its
Restricted Subsidiaries of the other Loan Documents to which they are
respectively a party, and the consummation of the transactions contemplated
thereby, do not and will not (i) require any consent or approval not already
obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a
breach of, or
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<PAGE> 50
constitute a default under the articles of incorporation or by-laws of the
Borrower or any Restricted Subsidiary, or under any Necessary Authorization,
indenture, agreement or other instrument, to which the Borrower or any
Restricted Subsidiary is a party or by which they or their respective
properties may be bound, or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Restricted Subsidiary, except
Permitted Liens.
(d) Business. The Borrower and its Restricted Subsidiaries are engaged
solely in the communications and media broadcasting business and activities
related thereto (including, without limitation, radio and television
broadcasting, print, productions, billboards, power transmission rentals and
sales and real property rentals and sales, but only to the extent that such
real property rentals and sales arise from the lease or sale of properties
previously used by the Borrower or its Restricted Subsidiaries in the
communications and media broadcasting business).
(e) Licenses, etc. All Necessary Authorizations have been duly
authorized and obtained, and are in full force and effect. The Borrower and its
Restricted Subsidiaries are and will continue to be in compliance in all
material respects with all provisions thereof.No Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge, threatened
challenge or revocation.
(f) Compliance with Law. The Borrower and its Restricted Subsidiaries
are in compliance with all Applicable Laws, the violation of which could
reasonably be expected to have a Material Adverse Effect. The Borrower and its
Restricted Subsidiaries have duly and timely filed all reports, statements and
filings that are required to be filed by any of them under the Communications
Act, and are in all material respects in compliance therewith, including
without limitation the rules and regulations of the FCC relating to the
operation of television and radio stations. The Borrower and its Restricted
Subsidiaries have obtained all appropriate approvals and consents of, and have
made all filings with, the FCC in connection with the acquisition and ownership
of each of their television and radio stations. No Person has filed or
submitted any document or instrument to the FCC challenging or contesting the
FCC order approving any assignment of a FCC license to the Borrower or any of
its Restricted Subsidiaries.
(g) Title to Properties. The Borrower and its Restricted Subsidiaries
have good and indefeasible title to, or a valid leasehold interest in, all of
their material assets. None of their assets are subject to any Liens, except
Permitted Liens. No financing statement or other Lien filing (except relating
to Permitted Liens) is on file in any state or jurisdiction that names the
Borrower or any of its Restricted Subsidiaries as debtor or covers (or purports
to cover) any assets of the Borrower or any of its Restricted Subsidiaries. The
Borrower and its Restricted Subsidiaries have not signed any such financing
statement or filing, nor any security agreement authorizing any Person to file
any such financing statement or filing.
(h) Litigation. Except as reflected on Schedule 3 hereto, there is no
action, suit, investigation or proceeding pending against, or, to the best of
the Borrower's knowledge, threatened against the Borrower or any of its
Restricted Subsidiaries, or in any other manner
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<PAGE> 51
relating directly and materially adversely to the Borrower, any of its
Restricted Subsidiaries, or any of their material properties, in any court or
before any arbitrator of any kind or before or by any governmental body the
result of which could reasonably be expected to require the payment of money by
the Borrower or any Restricted Subsidiary in an amount of $500,000 or more in
any one such action, suit or proceeding or $2,500,000 or more in the aggregate
for all such actions, suits or proceedings.
(i) Taxes. All federal, state and other tax returns of the Borrower
and its Restricted Subsidiaries required by law to be filed have been duly
filed and all federal, state and other taxes, assessments and other
governmental charges or levies upon the Borrower, its Restricted Subsidiaries
or any of their properties, income, profits and assets, which are due and
payable, have been paid, unless the same are being diligently contested in good
faith by appropriate proceedings, with adequate reserves established therefor,
and no Lien (other than a Permitted Lien) has attached and no foreclosure,
distraint, sale or similar proceedings have been commenced. The charges,
accruals and reserves on the books of the Borrower and its Restricted
Subsidiaries in respect of their taxes are, in the judgment of the Borrower,
adequate.
(j) Financial Statements; Material Liabilities. The Borrower has
furnished or caused to be furnished to the Lenders copies of its December 31,
1994, financial statements, which are prepared in good faith and complete in
all material respects and present fairly in accordance with GAAP the financial
position of the Borrower and its Restricted Subsidiaries as at such dates and
the results of operations for the periods then ended, subject to normal
year-end adjustments. The Borrower and its Restricted Subsidiaries have no
material liabilities, contingent or otherwise, nor material losses, except as
disclosed in writing to the Lenders prior to the Agreement Date.
(k) No Adverse Change. Since December 31, 1994, no event or
circumstances has occurred or arisen that could reasonably be expected to have
a Material Adverse Effect except as listed on Schedule 11 hereto.
(l) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan other than those disclosed to the Administrative Lender
in writing. Each such Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and any other applicable Federal or
state law, rule or regulation. With respect to each Plan of the Borrower and
each member of its Controlled Group (other than a Multiemployer Plan), all
reports required under ERISA or any other Applicable Law to be filed with any
governmental authority, the failure of which to file could reasonably result in
liability of the Borrower or any member of its Controlled Group in excess of
$100,000, have been duly filed. All such reports are true and correct in all
material respects as of the date given. No such Plan of the Borrower or any
member of its Controlled Group has been terminated nor has any accumulated
funding deficiency (as defined in Section 412(a) of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or
requested. None of the Borrower or any member of its Controlled Group has
failed to make any contribution or pay any amount due or owing as
46
<PAGE> 52
required by Section 412 of the Code or Section 302 of ERISA or the terms of
any such Plan prior to the due date under Section 412 of the Code and Section
302 of ERISA. There has been no ERISA Event or any event requiring disclosure
under Section 4041(c)(3)(C), 4068(f), 4063(a) or 4043(b) of ERISA with respect
to any Plan or trust of the Borrower or any member of its Controlled Group
since the effective date of ERISA. The value of the assets of each Plan (other
than a Multiemployer Plan) of the Borrower and each member of its Controlled
Group equaled or exceeded the present value of the benefit liabilities, as
defined in Title IV of ERISA, of each such Plan as of the most recent valuation
date using Plan actuarial assumptions at such date. There are no pending or, to
the best of the Borrower's knowledge, threatened claims, lawsuits or actions
(other than routine claims for benefits in the ordinary course) asserted or
instituted against, and neither the Borrower nor any member of its Controlled
Group has knowledge of any threatened litigation or claims against, (i) the
assets of any Plan or trust or against any fiduciary of a Plan with respect to
the operation of such Plan, or (ii) the assets of any employee welfare benefit
plan within the meaning of Section 3(1) or ERISA, or against any fiduciary
thereof with respect to the operation of any such plan. None of the Borrower or
any member of its Controlled Group has engaged in any prohibited transactions,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, in
connection with any Plan. None of the Borrower or any member of its Controlled
Group has withdrawn from any Multiemployer Plan, nor has incurred or reasonably
expects to incur (A) any liability under Title IV of ERISA (other than premiums
due under Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and
no event has occurred which with the giving of notice under Section 4219 of
ERISA would result in such liability) under Section 4201 of ERISA as a result
of a complete or partial withdrawal (within the meaning of Section 4203 or 4205
of ERISA) from a Multiemployer Plan, or (C) any liability under Section 4062 of
ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA. None
of the Borrower, any member of its Controlled Group, or any organization to
which the Borrower or any member of its Controlled Group is a successor or
parent corporation within the meaning of ERISA Section 4069(b), has engaged in
a transaction within the meaning of ERISA Section 4069. None of the Borrower or
any member of its Controlled Group maintains or has established any welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides for
continuing benefits or coverage for any participant or any beneficiary of any
participant after such participant's termination of employment except as may be
required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") and the regulations thereunder, and at the expense of the
participant or the beneficiary of the participant, or retiree medical
liabilities. Each of Borrower and its Controlled Group which maintains a
welfare benefit plan within the meaning of Section 3(1) of ERISA has complied
in all material respects with any applicable notice and continuation
requirements of COBRA and the regulations thereunder.
(m) Compliance with Regulations G, T, U and X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, and no part of the proceeds of the Advances or the
Letters of Credit will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock. No assets
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of the Borrower and its Restricted Subsidiaries are margin stock, and none of
the Pledged Stock is margin stock. None of the Borrower and its Restricted
Subsidiaries, nor any agent acting on their behalf, have taken or will
knowingly take any action which might cause this Agreement or any Loan
Documents to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934, in each case
as in effect now or as the same may hereafter be in effect.
(n) Governmental Regulation. The Borrower and its Restricted
Subsidiaries are not required to obtain any Necessary Authorization that has
not already been obtained from, or effect any material filing or registration
that has not already been effected with, the FCC or any other federal, state or
local regulatory authority in connection with the execution and delivery of
this Agreement or any other Loan Document, or the performance thereof (other
than any enforcement of remedies by the Administrative Lender on behalf of the
Lenders), in accordance with their respective terms, including any borrowings
hereunder. (o) Absence of Default. The Borrower and its Restricted Subsidiaries
are in compliance in all material respects with all of the provisions of their
articles of incorporation and by-laws, and no event has occurred or failed to
occur, which has not been remedied or waived, the occurrence or nonoccurrence
of which constitutes, or which with the passage of time or giving of notice or
both would constitute, (i) an Event of Default or (ii) adefault by the Borrower
or any of its Restricted Subsidiaries under any material indenture, agreement
or other instrument, or any judgment, decree or order to which the Borrower or
any of its Restricted Subsidiaries is a party or by which they or any of their
material properties is bound.
(p) Investment Company Act. The Borrower is not required to register
under the provisions of the Investment Company Act of 1940, as amended. Neither
the entering into or performance by the Borrower of this Agreement nor the
issuance of the Notes violates any provision of such act or requires any
consent, approval, or authorization of, or registration with, the Securities
and Exchange Commission or any other governmental or public body or authority
pursuant to any provisions of such act.
(q) Environmental Matters. Neither the Borrower nor any Subsidiary has
any actual knowledge or reason to believe that any substance deemed hazardous
by any Applicable Environmental Law, has been installed on any real property
now owned by the Borrower or any of its Subsidiaries. The Borrower and its
Subsidiaries are not in violation of or subject to any existing, pending or, to
the best of the Borrower's knowledge, threatened investigation or inquiry by
any governmental authority or to any material remedial obligations under any
Applicable Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances,
if any, pertaining to any real property of the Borrower and its Subsidiaries.
The Borrower and its Subsidiaries have not obtained and are not required to
obtain any permits, licenses or similar authorizations to construct, occupy,
operate or use any buildings,
improvements, fixtures, and equipment forming a part of any real
property of the Borrower or any Subsidiary by reason of any Applicable
Environmental Laws. The Borrower and its
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Subsidiaries undertook, at the time of acquisition of any real property,
reasonable inquiry into the previous ownership and uses of such real property
consistent with good commercial or customary practice. The Borrower and its
Subsidiaries have taken all reasonable steps to determine, and the Borrower and
its Subsidiaries have no actual knowledge or reason to believe, after
reasonable investigation, that any hazardous substances or solid wastes have
been disposed of or otherwise released on or to the real property of the
Borrower or any of its Subsidiaries in any manner or quantities which would be
deemed a violation of the Applicable Environmental Laws.
(r) Certain Agreements. The Capitalized Lease Obligations and the
Affiliation Agreements have been duly authorized, executed and delivered by the
Borrower or its Restricted Subsidiaries, as applicable, and (to the best of the
Borrower's knowledge) the other parties thereto. Except as disclosed to each
Lender, there is no litigation, or, to the best of the Borrower's knowledge,
claim of breach or default, pending or threatened with respect to any
Capitalized Lease Obligations or Affiliation Agreement that could reasonably be
expected to adversely effect any such lease or contract. The Borrower has no
knowledge of any default by any seller of any of the Borrower's or its
Restricted Subsidiaries' television or radio stations under any obligations of
such seller to the Borrower or any Restricted Subsidiary. The Borrower has no
notice of or belief that any party to any Capitalized Lease Obligation or
Affiliation Agreement is contemplating a breach, default or termination for any
reason of such contract or lease, other than as disclosed in writing and
reasonably acceptable to the Lenders. The Borrower has provided, or caused to
be provided, to the Administrative Lender complete and correct copies of or
access to the Capitalized Lease Obligations and Affiliation Agreements, all as
amended, together with all exhibits and schedules thereto.
(s) Valid Issuance of Securities. All Pledged Stock has been duly
authorized and validly issued, and is fully paid and nonassessable. The Capital
Stock described on Exhibit A to the Pledge Agreements constitutes all the
issued and outstanding Capital Stock of the Subsidiaries of the Borrower or the
Subsidiaries of another Subsidiary. No Person has conversion rights with
respect to, or any subscription rights, calls, commitments or claims of any
character for, or any repurchase or redemption options relating to, the Pledged
Stock, except for those listed on Schedule 5 hereto. The Pledged Stock, when
issued or sold, was either (i) registered or qualified under applicable federal
or state securities laws, or (ii) exempt therefrom.
(t) Certain Fees. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Commitments or the Advances hereunder or the
issuance of any Letters of Credit. The Borrower agrees to indemnify and hold
harmless the Administrative Lender and each Lender from and against any claims,
demand, liability, proceedings, costs or expenses asserted with respect to or
arising in connection with any such fees or commissions.
(u) Compliance. Attached as Schedule 4 hereto is a complete list of
all material licenses, consents, authorizations, permits and Necessary
Authorizations as of the Agreement
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Date. Such licenses, consents, permits and authorizations constitute all that
are necessary, appropriate or advisable for each of the Borrower and its
Restricted Subsidiaries to operate its business and own its properties, and are
in full force and effect. No event has occurred which permits (or with the
passage of time would permit) the revocation or termination of any such
license, consents, permits and authorizations, or which could result in the
imposition of any restriction thereon of such a nature that could reasonably be
expected to have a Material Adverse Effect.
(v) Patents, Etc. The Borrower and its Restricted Subsidiaries have
obtained all patents, trademarks, service- marks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their business as presently conducted and as
proposed to be conducted, the loss of which could reasonably be expected to
have a Material Adverse Effect. Nothing has come to the attention of the
Borrower or any of its Restricted Subsidiaries to the effect that (i) any
process, method, part or other material presently contemplated to be employed
by the Borrower or any Restricted Subsidiary may infringe any patent,
trademark, service-mark, trade name, copyright, license or other right owned by
any other Person, or (ii) there is pending or overtly threatened any claim or
litigation against or affecting the Borrower or any Restricted Subsidiary
contesting its right to sell or use any such process, method, part or other
material.
(w) Disclosure. Neither this Agreement nor any other document,
certificate or statement which has been furnished to any Lender by or on behalf
of the Borrower or any Restricted Subsidiary in connection herewith contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statement contained herein and therein not
misleading at the time it was furnished. There is no fact known to the Borrower
and not known to the public generally that could reasonably be expected to
materially adversely affect the assets or business of the Borrower and its
Restricted Subsidiaries, or in the future could reasonably be expected (so far
as the Borrower can now foresee) to have a Material Adverse Effect, which has
not been set forth in this Agreement or in the documents, certificates and
statements furnished to the Lenders by or on behalf of the Borrower prior to
the date hereof in connection with the transaction contemplated hereby.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance and each Letter of Credit, and each shall be
true and correct when made, except to the extent (a) previously fulfilled in
accordance with the terms hereof, (b) applicable to a specific date or
otherwise subsequently inapplicable, or (c) previously waived in writing by the
Determining Lenders with respect to any particular factual circumstance. All
such representations and warranties shall survive, and not be waived by, the
execution hereof by any Lender, any investigation or inquiry by any Lender, or
by the making of any Advance under this Agreement.
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ARTICLE 5
General Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 5.1 Preservation of Existence and Similar Matters. The
Borrower shall, and shall cause each Restricted Subsidiary to:
(a) preserve and maintain, or timely obtain and thereafter preserveand
maintain, its existence, rights, franchises, licenses, authorizations,
consents, privileges and all other Necessary Authorizations from federal, state
and local governmental bodies and any tribunal (regulatory or otherwise), the
loss of which could have a Material Adverse Effect; and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, unless the failure to do
so could not have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower and
its Restricted Subsidiaries shall (a) engage substantially in the media or
communication related business and activities related thereto, and (b) comply
in all material respects with the requirements of all Applicable Law, the
failure of which could reasonably be expected to have a Material Adverse
Effect.
Section 5.3 Maintenance of Properties. The Borrower shall, and shall
cause each Restricted Subsidiary to, maintain or cause to be maintained all its
properties (whether owned or held under lease) in reasonably good repair,
working order and condition, taken as a whole, and from time to time make or
cause to be made all appropriate repairs, renewals, replacements, additions,
betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower
shall, and shall cause each Restricted Subsidiary to, maintain a system of
accounting established and administered in accordance with GAAP, keep adequate
records and books of account in which complete entries will be made and all
transactions reflected in accordance with GAAP, and keep accurate and complete
records of its respective assets. The Borrower and each of its Restricted
Subsidiaries shall maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower shall, and shall cause each
Restricted Subsidiary to, maintain insurance from responsible companies in such
amounts and against such risks as shall be customary and usual in the industry
for companies of similar size and capability, but in no event less than the
amount and types insured as of the Agreement Date. Each insurance policy shall
provide for at least 30 days' prior notice to the Administrative Lender of any
proposed termination or cancellation of such policy, whether on account of
default or otherwise,
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the loss of which could, individually or in the aggregate, reasonably be
expected to have Material Adverse Effect.
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall
cause each Restricted Subsidiary to, pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or its income or properties
prior to the date on which penalties attach thereto, and all lawful material
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any of its properties; except that no such tax, assessment, charge, levy
or claim need be paid which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the appropriate books, but only so long as no Lien (other than a
Permitted Lien) shall attach with respect thereto and no foreclosure,
distraint, sale or similar proceedings shall have been commenced. The Borrower
shall, and shall cause each Restricted Subsidiary to, timely file all
information returns required by federal, state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower shall, and shall
cause each Restricted Subsidiary to, promptly permit representatives of the
Administrative Lender or any Lender from time to time to (a) visit and inspect
the properties of the Borrower and Restricted Subsidiary as often as the
Administrative Lender or any Lender shall deem advisable, (b) inspect and make
extracts from and copies of the Borrower's and each Restricted Subsidiary's
books and records, and (c) discuss with the Borrower's and each Restricted
Subsidiary's directors, officers, employees and auditors its business, assets,
liabilities, financial positions, results of operations and business prospects.
Section 5.8 Payment of Indebtedness. Subject to Section 5.6 hereof,
the Borrower shall, and shall cause each Restricted Subsidiary to, pay its
Indebtedness when and as the same becomes due, other than amounts (other than
the Obligations) duly and diligently disputed in good faith.
Section 5.9 Use of Proceeds. The Borrower shall use the proceeds of
Advances and Letters of Credit to make acquisitions permitted under Section 7.5
hereof, to make Capital Expenditures, to make Investments (including advances
to Subsidiaries) permitted pursuant to Section 7.3 hereof, to refinance all
outstanding Indebtedness under the Existing Credit Agreement, for working
capital and for other general corporate purposes.
Section 5.10 Indemnity.
(a) The Borrower agrees to defend, protect, indemnify and hold
harmless the Administrative Lender, the Issuing Bank, each Lender, each of
their respective affiliates, and each of their respective (including such
affiliates') officers, directors, employees, agents, attorneys, shareholders
and consultants (including, without limitation, those retained in connection
with the satisfaction or attempted satisfaction of any of the conditions set
forth herein) of each of the foregoing (collectively, "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments,
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suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees (whether direct, indirect or consequential
and whether based on any federal, state, or local laws and regulations, under
common law or at equitable cause, or on contract, tort or otherwise, arising
from or connected with the past, present or future operations of the Borrower
or its predecessors in interest, or the past, present or future environmental
condition of property of the Borrower), in any manner relating to or arising
out of this Agreement, the Loan Documents, or any act, event or transaction or
alleged act, event or transaction relating or attendant thereto, the making of
or any participations in the Advances or the Letters of Credit and the
management of the Advances and the Letters of Credit, including in connection
with, or as a result, in whole or in part, of any ordinary or mere negligence
of Administrative Lender, the Issuing Bank or any Lender (other than those
matters raised exclusively by a participant against the Administrative Lender,
the Issuing Bank or any Lender and not the Borrower), or the use or intended
use of the proceeds of the Advances and the Letters of Credit hereunder, or in
connection with any investigation of any potential matter covered hereby, but
excluding any claim or liability that arises as the result of the gross
negligence or willful misconduct of any Indemnitee, as finally judicially
determined by a court of competent jurisdiction, but excluding matters raised
by one Lender against another Lender or by any shareholders of a Lender against
a Lender or its management (collectively, "Indemnified Matters"); provided
however, that so long as no Event of Default shall have occurred and be
continuing, there shall be no settlement by the Indemnitees or any of them with
respect to any Indemnified Matter without prior consultation with the Borrower.
(b) In addition, the Borrower shall periodically, upon request,
reimburse each Indemnitee for its reasonable legal and other actual expenses
(including the cost of any investigation and preparation) incurred in
connection with any Indemnified Matter; provided, however, that the Indemnitees
agree that they shall endeavor to use legal counsel common to all Indemnitees
in connection with any Indemnified Matter unless any such Indemnitee shall
reasonably determine, in its sole discretion, that the use of such common legal
counsel would conflict with its interests in such Indemnified Matter. If for
any reason the foregoing indemnification is unavailable to any Indemnitee or
insufficient to hold any Indemnitee harmless with respect to Indemnified
Matters, then the Borrower shall contribute to the amount paid or payable by
such Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by the Borrower and the Borrower's stockholders on the one hand and such
Indemnitee on the other hand but also the relative fault of the Borrower and
such Indemnitee, as well as any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations under this Section shall
be in addition to any liability which the Borrower may otherwise have, shall
extend upon the same terms and conditions to each Indemnitee, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Borrower, the Administrative
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Lender, the Issuing Bank, the Lenders and all other Indemnitees. This Section
shall survive any termination of this Agreement and payment of the Obligations.
Section 5.11 Environmental Law Compliance. The use which the Borrower
or any Subsidiary intends to make of any real property owned by it will not
result in the disposal or other release of any hazardous substance or solid
waste on or to such real property in any manner or quantities which would be
deemed a violation of the Applicable Environmental Laws. Borrower further
agrees to exercise reasonable due diligence in the acquisition of real property
in connection with compliance with Applicable Environmental Laws. As used
herein, the terms "hazardous substance" and "release" as used in this Section
shall have the meanings specified in CERCLA (as defined in the definition of
Applicable Environmental Laws), and the terms "solid waste" and "disposal"
shall have the meanings specified in RCRA (as defined in the definition of
Applicable Environmental Laws); provided, however, that if CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment; and
provided further, to the extent that any other law applicable to the Borrower,
any Subsidiary or any of their properties establishes a meaning for "hazardous
substance," "release," "solid waste," or "disposal" which is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply. The
Borrower agrees to indemnify and hold the Administrative Lender, the Issuing
Bank and each Lender harmless from and against, and to reimburse them with
respect to, any and all claims, demands, causes of action, loss, damage,
liabilities, costs and expenses (including attorneys' fees and courts costs) of
any kind or character, known or unknown, fixed or contingent, asserted against
or incurred by any of them at any time and from time to time by reason of or
arising out of (a) the failure of the Borrower or any Subsidiary to perform any
obligation hereunder regarding asbestos or Applicable Environmental Laws, (b)
any violation on or before the Release Date of any Applicable Environmental Law
in effect on or before the Release Date, and (c) any act, omission, event or
circumstance existing or occurring on or prior to the Release Date (including
without limitation the presence on such real property or release from such real
property of hazardous substances or solid wastes disposed of or otherwise
released on or prior to the Release Date), resulting from or in connection with
the ownership of the real property, regardless of whether the act, omission,
event or circumstance constituted a violation of any Applicable Environmental
Law at the time of its existence or occurrence, or whether the act, omission,
event or circumstance is caused by or relates to the negligence of any
Indemnified Person; provided that, the Borrower shall not be under any
obligation to indemnify the Administrative Lender, the Issuing Bank or any
Lender to the extent that any such liability arises as the result of the gross
negligence or willful misconduct of such Person, as finally judicially
determined by a court of competent jurisdiction. The provisions of this
paragraph shall survive the Release Date and shall continue thereafter in full
force and effect.
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ARTICLE 6
Information Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled), the Borrower shall furnish or cause to be furnished to
the Administrative Lender:
Section 6.1 Quarterly Financial Statements and Information. Within 45
days after the end of each fiscal quarter, consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of such
quarter and the related consolidated and consolidating statements of income and
consolidated statements of changes in cash flow for such quarter and for the
elapsed portion of the year ended with the last day of such quarter, all of
which shall be certified by the president or chief financial officer of the
Borrower, to be, in his or her opinion, complete and correct in all material
respects and to present fairly, in accordance with GAAP, the financial position
and results of operations of the Borrower and its Subsidiaries as at the end of
and for such period, and for the elapsed portion of the year ended with the
last day of such period, subject only to normal year-end adjustments. In
addition, the Borrower shall furnish within such time period a reconciliation
of such financial statements setting forth the difference in financial position
and results of operations between its Subsidiaries and its Restricted
Subsidiaries for such period and for the elapsed portion of the year ended with
the last day on such period, subject to sound year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate
of No Default.
(a) Within 90 days after the end of each fiscal year, a copy of (i)
the consolidated balance sheet of the Borrower and its Subsidiaries, as of the
end of the current and prior fiscal years and (ii) consolidated statements of
earnings, statements of changes in shareholders' equity, and statements of
changes in cash flow as of and through the end of such fiscal year, all of
which are prepared in accordance with GAAP, and certified by independent
certified public accountants acceptable to the Lenders, whose opinion shall be
in scope and substance in accordance with generally accepted auditing standards
and shall be unqualified. In addition, the Borrower shall furnish within such
time period an unaudited reconciliation of such financial statements setting
forth the difference in financial position and results of operations between
its Subsidiaries and its Restricted Subsidiaries as of and through the end of
such fiscal year.
(b) Simultaneously with the delivery of the statements required by
this Section 6.2, a letter from the Borrower's public accountants certifying
that no Default was detected during the examination of the Borrower and its
Restricted Subsidiaries, and authorizing the Borrower to deliver such financial
statements and opinion thereon to the Administrative Lender and Lenders
pursuant to this Agreement.
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(c) As soon as available, but in any event within 60 days following
the end of each fiscal year, a copy of the annual consolidated operating budget
of the Borrower and its Subsidiaries for the succeeding fiscal year.
Section 6.3 Compliance Certificates. At the time financial statements
are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of an
Authorized Signatory:
(a) setting forth at the end of such period, a calculation of the
Leverage Ratio, as well as certifications and arithmetical calculations
required to establish whether the Borrower and its Restricted Subsidiaries were
in compliance with the requirements of Sections 7.1(d), (e), (f), (g) and (h),
7.3(h), 7.6, 7.7, 7.10, 7.11, 7.12, 7.13 and 7.14 hereof, which shall be
substantially in the form of Exhibit H hereto;
(b) setting forth the aggregate amount of outstanding Advances and
Reimbursement Obligations and certifying as to compliance herewith; and
(c) stating that, to the best of his or her knowledge after due
inquiry, no Default has occurred as at the end of such period, or if a Default
has occurred, disclosing each such Default and its nature, when it occurred,
whether it is continuing and the steps being taken with respect to such
Default.
Section 6.4 Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Borrower or any Restricted Subsidiary by
accountants in connection with any annual, interim or special audit, including
without limitation any report prepared in connection with the annual audit
referred to in Section 6.2 hereof, and any other comment letter submitted to
management in connection with any such audit, (ii) each financial statement,
report, notice or proxy statement sent by the Borrower or any Restricted
Subsidiary to stockholders generally, (iii) each regular or periodic report and
any registration statement (other than statements on Form S-8) or prospectus
(or material written communication in respect of any thereof) filed by the
Borrower or any subsidiary with any securities exchange, with the Securities
and Exchange Commission or any successor agency, and (iv) all press releases
concerning material financial aspects of the Borrower or any Restricted
Subsidiary;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s)
or other evidence of indebtedness or other security of the Borrower or any
Restricted Subsidiary in excess of $750,000 in the aggregate has given notice or
taken any action with respect to a breach, failure to perform, claimed default
or event of default thereunder, (ii) any party to any Capitalized Lease
Obligations or any Local Marketing Agreement has given notice or taken any
action with respect to a breach, failure to perform, claimed default or event of
default thereunder, (iii) any occurrence or non-occurrence of any event which
constitutes or which with the passage of time or giving of notice or both could
constitute a material breach by the Borrower or any Restricted Subsidiary under
any material agreement or instrument which could
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reasonably be expected to result in a liability in excess of $750,000, other
than this Agreement to which the Borrower or any Restricted Subsidiary is a
party or by which any of their properties may be bound, or (iv) any event,
circumstance or condition which could reasonably be expected to have a Material
Adverse Effect, a written notice specifying the details thereof (or the nature
of any claimed default or event of default) and what action is being taken or
is proposed to be taken with respect thereto; provided, however, no notice
shall be required to be delivered hereunder with respect to any event,
circumstance or condition set forth in clause (i), (ii) or (iii) immediately
preceding if, in the opinion of counsel to the Borrower or such Restricted
Subsidiary, there is no reasonable possibility of an adverse determination with
respect to such event, circumstance or condition;
(c) Promptly upon receipt thereof, information with respect to and
copies of any notices received from the FCC or any other federal, state or
local regulatory agencies or any tribunal relating to any order, ruling, law,
information or policy that relates to a breach of or noncompliance with the
Communications Act, or could reasonably be expected to result in the payment of
money by the Borrower or any Restricted Subsidiary in an amount of $750,000 or
more in the aggregate, or otherwise have a Material Adverse Effect, or result
in the loss or suspension of any Necessary Authorization; provided, however, no
information shall be required to be delivered hereunder if, in the opinion of
counsel to the Borrower or such Restricted Subsidiary, there is no reasonable
possibility of an adverse determination with respect to such notice;
(d) Promptly upon receipt from any governmental agency, or any
government, political subdivision or other entity, any material notice,
correspondence, hearing, proceeding or order regarding or affecting the
Borrower, any Subsidiary, or any of their properties or businesses; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the assets, business, liabilities, financial position,
projections, results of operations or business prospects of the Borrower and
its Subsidiaries, as the Administrative Lender or any Lender may reasonably
request.
Section 6.5 Notice of Litigation, Default and Other Matters. Prompt
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all proceedings and investigations by or
before the FCC or any other governmental body, and all actions and proceedings
in any court or before any arbitrator involving claims for damages, fines or
penalties (including punitive damages) in excess of $750,000 in the aggregate
(after deducting the amount with respect to the Borrower or any Restricted
Subsidiary such Person is insured, provided such claim has not been denied),
against or in any other way relating directly to the Borrower, any Restricted
Subsidiary, or any of their properties or businesses; provided, however, no
notice shall be required to be delivered
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hereunder if, in the opinion of counsel to the Borrower or such Restricted
Subsidiary, there is no reasonable possibility of an adverse determination in
such action or proceeding;
(b) Promptly upon the happening of any condition or event which
constitutes a Default, a written notice specifying the nature and period of
existence thereof and what action is being taken or is proposed to be taken
with respect thereto; and
(c) Any material adverse change with respect to the business, assets,
liabilities, financial position, results of operations or prospective business
of the Borrower or any Subsidiary, other than changes in the ordinary course of
business which have not had and are not likely to have a Material Adverse
Effect.
Section 6.6 ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Borrower or
any member of its Controlled Group knows or has reason to know that any ERISA
Event described in clause (a) of the definition of ERISA Event or any event
described in Section 4063(a) of ERISA with respect to any Plan of the Borrower
or any member of its Controlled Group has occurred, and (ii) within 10 days
after the Borrower or any member of its Controlled Group knows or has reason to
know that any other ERISA Event with respect to any Plan of the Borrower or any
member of its Controlled Group has occurred or a request for a minimum funding
waiver under Section 412 of the Code with respect to any Plan of the Borrower
or any member of its Controlled Group, a written notice describing such event
and describing what action is being taken or is proposed to be taken with
respect thereto, together with a copy of any notice of event that is given to
the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its Controlled
Group of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof
by the Borrower or any member of its Controlled Group with the United States
Department of Labor, the Internal Revenue Service or the PBGC, copies of each
annual and other report (including Schedule B thereto) with respect to each
Plan;
(d) Promptly and in any event within 30 days after receipt thereof, a
copy of any notice, determination letter, ruling or opinion the Borrower or any
member of its Controlled Group receives from the PBGC, the United States
Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential
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withdrawal liability pursuant to Section 4219 or 4202 of ERISA, and a statement
from the chief financial officer of the Borrower or such member of its
Controlled Group setting forth details as to the events giving rise to such
potential withdrawal liability and the action which the Borrower or such member
of its Controlled Group is taking or proposes to take with respect thereto;
(f) Notification within 30 days of any material increases in the
benefits of any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any
Plan to which the Borrower or any member of its Controlled Group was not
previously contributing;
(g) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows or has reason to know that the Borrower or
any such member of its Controlled Group has or intends to file a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA and a copy of such notice; and
(h) Promptly after receipt of written notice of commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any member of its Controlled Group with
respect to any Plan, except those which, in the aggregate, if adversely
determined could not have a Material Adverse Effect.
ARTICLE 7
Negative Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section7.1 Indebtedness. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, assume, incur or otherwise become or
remain obligated in respect of, or permit to be outstanding, or suffer to exist
any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable (including film right payables), accrued
expenses, deferred revenue items, pension liabilities and customer advance
payments incurred in the ordinary course of business;
(c) Guaranties to the extent permitted under Section 7.6 hereof;
(d) Capitalized Lease Obligations and Indebtedness incurred to
purchase tangible personal property, in an aggregate amount not to exceed
$7,500,000 at any time;
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(e) Indebtedness evidenced by the Intercompany Notes; and
(f) Institutional Debt in an aggregate amount not to exceed
$300,000,000 at any time outstanding; provided, that, (i) such debt is
unsecured, (ii) such debt is at all times on terms and conditions to the
reasonable satisfaction of the Determining Lenders, (iii) such debt has a final
maturity and Weighted Average Life to Maturity (computed from the date of
incurrence of such debt) at least one day longer than the Maturity Date and the
Weighted Average Life to Maturity of the Obligations, and (iv) the Net Cash
Proceeds of such issuance are applied in accordance with Section 2.5(d) hereof;
(g) Indebtedness set forth on Schedule 9 hereto, and all renewals and
extensions (but not increases) thereof;
(h) Indebtedness not to exceed $60,000,000 United States dollars in
the aggregate principal amount outstanding at any time, provided that the terms
of such Indebtedness are reasonably acceptable to the Administrative Lender;
(i) Indebtedness (in addition to Indebtedness otherwise permitted
pursuant to this Section 7.1) of its Restricted Subsidiaries not to exceed
$10,000,000 in aggregate principal amount outstanding at any time; and
(j) Indebtedness (in addition to the Indebtedness otherwise permitted
pursuant to this Section 7.1) of the Borrower and its Restricted Subsidiaries
not to exceed in aggregate principal amount outstanding at any time 100% of
Operating Cash Flow for the immediately preceding four fiscal quarters,
provided, however, the incurrence of Indebtedness otherwise permitted pursuant
to clauses (c), (d), (e), (f), (h), (i) and (j) immediately preceding shall be
permitted only if there shall exist no Default prior to or after giving effect
to any such proposed Indebtedness.
Section 7.2 Liens. The Borrower shall not, and shall not permit any
Restricted Subsidiary to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets, whether now owned or
hereafter acquired, except Permitted Liens. The Borrower shall not, and shall
not permit any Restricted Subsidiary to, agree with any other Person that it
shall not create, assume, incur, permit or suffer to exist or to be created,
assumed, incurred or permitted to exist, directly or indirectly, any Lien on
any of its assets.
Section 7.3 Investments. The Borrower shall not, and shall not permit
any Subsidiary to, make, own or maintain any Investment, except that the
Borrower may purchase or otherwise acquire and own and maintain:
(a) Marketable, direct obligations of, or guaranteed by, the United
States of America and maturing within 365 days of the date of purchase;
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(b) Commercial paper issued by U.S. corporations that have a rating of
A-1/P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's
Corporation;
(c) Certificates of deposit of domestic banks maturing within 365
days of the date of purchase, which banks' debt obligations have one of the two
highest ratings obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Corporation;
(d) Securities issued by U.S. corporations that have one of the two
highest ratings obtainable from Moody's or S&P;
(e) Investments in newly-formed or existing Restricted Subsidiaries
(i) that are subject to the provisions hereof, (ii) that are or immediately
become party to the Subsidiary Guaranty (iii) whose Capital Stock is pledged to
the Lenders to secure the Obligations, and (iv) whose Intercompany Notes are
pledged to the Lenders to secure the Obligations;
(f) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms;
(g) Investments which are described on Schedule 8 hereto; and
(h) Provided there shall exist no Default prior to or after giving
effect to any such proposed Investments (which may include, without limitation,
Investments in Unrestricted Subsidiaries), other Investments in communication
or media related businesses not to exceed, at any time outstanding, an
aggregate amount (determined using the purchase price or cost of such
Investments without any adjustment for depreciation or amortization) equal to
the sum of (i) 150% of Operating Cash Flow for the immediately preceding four
fiscal quarters, plus (ii) 100% of the first $50,000,000 of Net Cash Proceeds
received by the Borrower and its Subsidiaries from the issuance of Equity after
the Agreement Date, plus (iii) 50% of Net Cash Proceeds in excess of
$50,000,000 received by the Borrower and its Subsidiaries from the issuance of
Equity (including any conversion of subordinated convertible debentures, which
constitutes Subordinated Debt, into Equity) after the Agreement Date, plus (iv)
50% of the Net Cash Proceeds received by the Borrower and its Subsidiaries from
the issuance of any subordinated convertible debentures after the Agreement
Date.
Section 7.4 Amendment and Waiver. The Borrower shall not, and shall
not permit any Restricted Subsidiary to, enter into any amendment of any
material term or provision of its articles of incorporation or by-laws. In
addition, the Borrower shall not, and shall not permit any Restricted
Subsidiary to, enter into any amendment of, or agree to or accept any waiver of
any of the provisions of, any Necessary Authorization, unless (a) the
Determining Lenders consent to such amendment and (b) the Lenders are provided
with 10 days' written notice prior to the execution or effectiveness of the
proposed amendment or waiver.
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Section 7.5 Liquidation, Disposition or Acquisition of Assets, Merger,
New Subsidiaries. The Borrower shall not, and shall not permit any Restricted
Subsidiary to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, properties or business,
other than immaterial assets sold in the ordinary course of business, or
dispositions whose proceeds are applied in accordance with Section 2.5(c)
hereof;
(b) acquire (i) all or any substantial part of the assets, property or
business of any other Person, or (ii) any assets that constitute a division or
operating unit of the business of any other Person; provided, however, that, so
long as there shall exist no Default prior to or after giving effect to a
proposed transaction, the Borrower or any Restricted Subsidiary may, subject to
the limitations set forth in Section 7.3(h) hereof and in this Section 7.5(b),
purchase assets, property or business of another Person, so long as (i) the
Lenders shall have received prior written notice at least 20 Business Days
prior to the date of such purchase, (ii) the Administrative Lender shall have
received at least 10 Business Days prior to the date of such purchase a
compliance certificate in the form required by Section 6.3 hereof, but setting
forth the covenant calculations described in Section 6.3(a) hereof both prior
to and after giving effect to the proposed purchase, (iii) such acquisition
shall be pursuant to documentation acceptable to the Administrative Lender,
(iv) such assets, property or business shall be in or relate to the
communications or media related business, and (v) the Administrative Lender
shall have received copies of all documents, instruments, opinions and other
information relating to the seller and assets to be acquired as it may
reasonably request;
(c) subject to the limitations set forth in Section 7.3(h) hereof,
enter into any merger or consolidation; provided, however, that, so long as
there shall exist no Default prior to or after giving effect to a proposed
transaction, the Borrower or any Restricted Subsidiary may merge or consolidate
with another Person, so long as (i) the Lenders shall have received prior
written notice at least 20 Business Days prior to the date of such transaction,
(ii) the Administrative Lender shall have received at least 10 Business Days
prior to the date of such transaction a compliance certificate in the form
required by Section 6.3 hereof, but setting forth the covenant calculations
described in Section 6.3(a) hereof both prior to and after giving effect to the
proposed merger or consolidation, (iii) such merger or consolidation shall be
pursuant to documentation acceptable to the Administrative Lender, (iv) the
Person with whom such merger or consolidation is being consummated with shall
be engaged in a communication or media related business, (v) the Borrower or
such Restricted Subsidiary shall be the surviving entity, provided, that if the
Borrower merges or consolidates with a Restricted Subsidiary, the Borrower
shall be the surviving entity, and (vi) the Administrative Lender shall have
received copies of all documents, instruments, opinions and other information
relating to the seller and assets to be acquired as it may reasonably request;
or
(d) create or acquire any Subsidiary, except as permitted by Sections
7.3(e) and (h) hereof.
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Section 7.6 Guaranties. Other than those guaranties referenced on
Schedule 10 hereto, the Borrower shall not, and shall not permit any Restricted
Subsidiary to, at any time make or issue any Guaranty, or assume, be obligated
with respect to, or permit to be outstanding any Guaranty, of any obligation of
any other Person except Guaranties in an aggregate amount not to exceed
$10,000,000 at any time; provided, however, such Guaranties shall be permitted
only if prior to such proposed Guaranty or after giving effect thereto there
shall exist no Default.
Section 7.7 Dividends. The Borrower shall not, and shall not permit
any Subsidiary to, directly or indirectly declare or pay any Dividend;
provided, however, (a) any Subsidiary may declare and pay Dividends to the
Borrower or any Restricted Subsidiary and (b) the Borrower may declare and pay
Dividends (including amounts which become Dividends as a result of the proviso
in the definition of Dividends) on any date in an amount not to exceed the sum
of (y) 25% of Excess Cash Flow for the immediately preceding twenty four month
period ending on the date of such proposed Dividend minus (z) the aggregate
amount of Dividends previously declared and paid during such twenty-fourth
month period; provided, further, however, notwithstanding clause (b)
immediately preceding to the contrary, the Borrower shall pay no such Dividends
unless there shall exist no Default prior to or after giving effect to any such
proposed Dividend.
Section 7.8 Affiliate Transactions. The Borrower shall not, and shall
not permit any Subsidiary to, at any time engage in any transaction with an
Affiliate, nor make an assignment or other transfer of any of its assets or
properties to any Affiliate, on terms materially less advantageous to the
Borrower or Subsidiary than would be the case if such transaction had been
effected with a nonAffiliate (other than advances to employees in the ordinary
course of business). The Borrower shall not, and shall not permit any
Subsidiary to, in any event incur or suffer to exist any Indebtedness or
Guaranty in favor of any Affiliate, unless such Affiliate shall subordinate the
payment and performance thereof on terms satisfactory to the Lenders in their
sole discretion, and otherwise upon terms, conditions and documentation, and in
a manner satisfactory to Determining Lenders. Notwithstanding the foregoing,
the Borrower may loan the proceeds of Advances to Subsidiaries that are
Restricted Subsidiaries, so long as (a) there shall exist no Default prior to
or after giving effect to such proposed loan and (b) such advances are
evidenced by Intercompany Notes that have been pledged pursuant to the Pledge
Agreements and for which entries in the financial records of the Borrower and
its Restricted Subsidiaries are made evidencing such loans and repayments
thereof.
Section 7.9 Compliance with ERISA. The Borrower shall not, and shall
not permit any Subsidiary to, directly or indirectly, or permit any member of
its Controlled Group to directly or indirectly, (a) terminate any Plan so as to
result in any material (in the opinion of the Determining Lenders) liability to
the Borrower or any member of its Controlled Group, (b) permit to exist any
ERISA Event, or any other event or condition which presents the risk of a
material (in the opinion of the Determining Lenders) liability of the Borrower
or any member of its Controlled Group, (c) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer
Plan so as to result in any material (in the opinion of the Determining
Lenders) liability to the Borrower or any member of its Controlled
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Group, (d) enter into any new Plan or modify any existing Plan so as to
increase its obligations thereunder except in the ordinary course of business
consistent with past practice which could result in any material (in the
opinion of the Determining Lenders) liability to the Borrower or any member of
its Controlled Group, or (e) permit the present value of all benefit
liabilities, as defined in Title IV of ERISA, under each Plan of the Borrower
or any member of its Controlled Group (using the actuarial assumptions utilized
by the PBGC upon termination of aplan) to materially (in the opinion of the
Determining Lenders) exceed the fair market value of Plan assets allocable to
such benefits all determined as of the most recent valuation date for each such
Plan.
Section 7.10 Leverage Ratio. At the end of each fiscal quarter
occurring during the periods indicated below, the Borrower shall not permit the
Leverage Ratio to be greater than:
<TABLE>
<CAPTION>
Period Ratio
<S> <C>
From date hereof through December 31, 1996 5.25 to 1
Thereafter through December 31, 1997 5.00 to 1
Thereafter through December 31, 1998 4.75 to 1
Thereafter 4.50 to 1
</TABLE>
Provided, that in the event the Collateral is released at any time during the
period from the Agreement Date through December 31, 1996, the Leverage Ratio
during such period shall not be greater than 5.00 to 1.
Section 7.11 Fixed Charges Coverage Ratio. The Borrower shall not
permit the ratio of (a) Operating Cash Flow for the four consecutive fiscal
quarters then ending to (b) Fixed Charges for such fiscal quarters as of the
last day of any fiscal quarter during the term of this Agreement, to be less
than 1.10 to 1.
Section 7.12 Interest Coverage Ratio. At the end of each fiscal
quarter, the Borrower shall not permit the ratio of (a) Operating Cash Flow for
the four consecutive fiscal quarters then ending, to (b) interest expense of
the Borrower and its Subsidiaries for such quarters, to be less than 2.0 to 1.
Section7.13 Debt Service Coverage Ratio. The Borrower shall not permit
the ratio of (a) Operating Cash Flow for the four consecutive fiscal quarters
then ending, to (b) Pro-Forma Debt Service for the four succeeding fiscal
quarters, to be less than 1.25 to 1 at the end of each fiscal quarter during
the term of this Agreement.
Section 7.14 Capital Stock of the Borrower. The Borrower shall not,
and shall not permit any Restricted Subsidiary to, make or permit any issuance,
transfer, assignment, distribution,
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mortgage, pledge or gift of any shares of Pledged Stock, except in connection
with issuances permitted by Schedule 5 hereto and then only if such shares are
pledged and delivered to the Administrative Lender pursuant to the pledge
agreements.
Section 7.15 Sale and Leaseback. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, enter into any arrangement whereby it
sells or transfers any of its assets, and thereafter rents or leases such
assets.
Section 7.16 Sale or Discount of Receivables. The Borrower shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly sell,
with or without recourse, for discount or otherwise, any notes or accounts
receivable.
Section 7.17 Business of Television Licenses and Radio Licenses and
Metroplex Licenses. Notwithstanding anything in this Agreement to the contrary,
Borrower shall not permit Television Licenses, Radio Licenses, or Metroplex
Licenses to engage in any business other than the ownership of (i) FCC licenses
and Necessary Authorizations for the operation of Television, Radio and
Metroplex, respectively, and (ii) at least 95% of the Capital Stock of
Television and 100% of the Capital Stock of Radio and Metroplex, respectively.
Section 7.18 Subordinated Debt. The Borrower shall not, and shall not
permit any Subsidiary to, (a) make any payment of principal, interest, premium,
fee or otherwise with respect to Subordinated Debt except in strict accordance
with the terms of the Subordinated Debt documentation, (b) prepay, redeem,
repurchase or defease, or set aside funds for the prepayment, redemption,
repurchase or defeasance of all or any portion of the Subordinated Debt or (c)
amend or change (or take any action or fail to take any action the result of
which is an effective amendment or change) or accept any waiver or consent with
respect to, any document or instrument in connection with any Subordinated Debt
that would result in (i) an increase in the outstanding principal amount of the
Subordinated Debt, (ii) a change in any principal, interest, fees, or other
amounts payable under the Subordinated Debt (including without limitation a
waiver or action that results in the waiver of any payment default under the
Subordinated Debt), (iii) a change in any date fixed for any payment of
principal, interest, fees, or other amounts payable under the Subordinated Debt
(including, without limitation, as a result of any redemption, defeasance or
otherwise), (iv) a change in any percentage of holders of the Subordinated Debt
required to take (or refrain from taking) any action, (v) a change in any
financial covenant, (vi) a change in any remedy or right of the holders of the
Subordinated Debt, (vii) a change in any covenant, term or provision which
would result in such term or provision being more restrictive than the terms of
this Agreement and the other Loan Documents, (viii) a change that grants or
permits the granting of any security interest or Lien on any asset or property
of the Borrower or any Subsidiary to secure any Subordinated Debt, or (ix) a
change in any term or provision of any document or instrument in connection
with any Subordinated Debt that could have, in any material respect, an adverse
effect on the interests of Lenders.
Section 7.19 Other Agreements. Except as otherwise provided in this
Agreement, neither Borrower nor any Restricted Subsidiary shall enter into any
agreement pursuant to which the
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ability of the Borrower or a Restricted Subsidiary to pay any money, dividend
or other type of advance to, or otherwise make any other Investment in, the
Borrower or any Restricted Subsidiary shall be limited or in which such payment
would be a default or event of default.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or
non-governmental body:
(a) Any representation or warranty made under any Loan Document shall
prove to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall default in the payment of (i) any interest
under any Note or any fees payable hereunder or any other costs, fees, expenses
or other amounts payable hereunder or under the Loan Documents, when due, which
Default is not cured within three days from the date such payment became due by
payment of such late amount, or (ii) any principal under any of the Notes;
(c) The Borrower or any Restricted Subsidiary shall default in the
performance or observance of any agreement or covenant contained in Section 5.1
or Article 7 hereof;
(d) The Borrower or any Restricted Subsidiary shall default in the
performance or observance of any other agreement or covenant contained in this
Agreement not specifically referred to elsewhere in this Section 8.1, and such
default shall not be cured within a period of 30 days after the earlier of
written notice from the Administrative Lender thereof or actual notice thereof;
(e) There shall occur any default or breach in the performance or
observance of any agreement or covenant (after the expiration of any applicable
grace period) or breach of any representation or warranty contained in any of
the Loan Documents (other than this Agreement);
(f) There shall be entered a decree or order by a court having
jurisdiction in the premises constituting an order for relief in respect of the
Borrower or any Subsidiary under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official of the Borrower
or any Subsidiary, or of any substantial part of their respective properties,
or ordering the winding-up or liquidation of the affairs of the Borrower or any
Subsidiary, and any such decree or order shall continue unstayed and in effect
for a period of 60 consecutive days;
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(g) The Borrower or any Subsidiary shall file a petition, answer or
consent seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, or the Borrower or any Subsidiary shall
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment or taking of possession of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Borrower or any Subsidiary or of any substantial part of their
respective properties, or the Borrower or any Subsidiary shall fail generally
to pay its debts as they become due, or the Borrower or any Subsidiary shall
take any action in furtherance of any such action;
(h) A final judgment or judgments shall be entered by any court
against the Borrower or any Subsidiary for the payment of money which exceeds
$500,000 in the aggregate, or a warrant of attachment or execution or similar
process shall be issued or levied against property of the Borrower or any
Subsidiary which, together with all other such property of the Borrower and its
Subsidiaries subject to other such process, exceeds in value $500,000 in the
aggregate, and if such judgment or award is not insured or, within 30 days
after the entry, issue or levy thereof, such judgment, warrant or process shall
not have been paid or discharged or stayed pending appeal, or if, after the
expiration of any such stay, such judgment, warrant or process shall not have
been paid or discharged;
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other party-in
interest or disqualified person shall engage in transactions which in the
aggregate would reasonably result in a direct or indirect liability to the
Borrower or any member of its Controlled Group in excess of $750,000 under
Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or
any member of its Controlled Group shall incur any accumulated funding
deficiency, as defined in Section 412 of the Code, in the aggregate in excess
of $750,000, or request a funding waiver from the Internal Revenue Service for
contributions in the aggregate in excess of $750,000; (iii) the Borrower or any
member of its Controlled Group shall incur any withdrawal liability in the
aggregate in excess of $250,000 as a result of a complete or partial withdrawal
within the meaning of Section 4203 or 4205 of ERISA; (iv) the Borrower or any
member of its Controlled Group shall fail to make a required contribution by
the due date under Section 412 of the Code or Section 302 of ERISA which would
result in the imposition of a lien under Section 412 of the Code or Section 302
of ERISA; (v) the Borrower, any member of its Controlled Group or any Plan
sponsor shall notify the PBGC of an intent to terminate, or the PBGC shall
institute proceedings to terminate, or the PBGC shall institute proceedings to
terminate, any Plan; (vi) a Reportable Event shall occur with respect to a
Plan, and within 15 days after the reporting of such Reportable Event to the
Administrative Lender, the Administrative Lender shall have notified the
Borrower in writing that the Determining Lenders have made a determination
that, on the basis of such Reportable Event, there are reasonable grounds for
the termination of such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such Plan
and as a result thereof an Event of Default shall have occurred hereunder;
(vii) a trustee shall be appointed by a court of competent jurisdiction to
administer any Plan or the assets thereof; (viii) the benefits of any Plan
shall be increased, or the Borrower
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or any member of its Controlled Group shall begin to maintain, or begin to
contribute to, any Plan, without the prior written consent of the Determining
Lenders; or (ix) any ERISA Event with respect to a Plan shall have occurred,
and 30 days thereafter (A) such ERISA Event, other than such event described in
clause (vi) of the definition of ERISA Event herein, (if correctable) shall not
have been corrected and (B) the then present value of such Plan's benefit
liabilities, as defined in Title IV of ERISA, shall exceed the then current
value of assets accumulated in such Plan; provided, however, that the events
listed in subsections (v) through (ix) shall constitute Events of Default only
if, as of the date thereof or any subsequent date, the maximum amount of
liability that the Borrower or any member of its Controlled Group could incur
in the aggregate under Section 4062, 4063, 4064, 4219 or 4023 of ERISA or any
other provision of law with respect to all such Plans, computed by the actuary
of the Plan taking into account any applicable rules and regulations of the
PBGC at such time, and based on the actuarial assumptions used by the Plan,
resulting from or otherwise associated with such event exceeds $750,000;
(j) All or any material portion of the Collateral or the Loan
Documents shall be the subject of any proceeding instituted by any Person other
than a Lender (except in connection with any Lender's exercise of any remedies
under the Loan Documents), or there shall exist any litigation or threatened
litigation with respect to all or any material portion of the Collateral or the
Loan Documents, or any Person shall challenge in any manner whatsoever the
validity or enforceability of all or any portion of the Loan Documents or the
Collateral; provided, however, that during any such time any such circumstance
shall be bonded or stayed in accordance with Applicable Law and to the
satisfaction of the Determining Lenders, such circumstance shall not be an
Event of Default;
(k) The Borrower or any Restricted Subsidiary shall default in the
payment of any Indebtedness in an aggregate amount of $750,000 or more beyond
any grace period provided with respect thereto, or shall default in the
performance of any agreement or instrument under which such Indebtedness is
created or evidenced beyond any applicable grace period, if the effect of such
default is to permit or cause the holder of such Indebtedness (or a trustee on
behalf of any such holder) to cause such Indebtedness to become due prior to
its date of maturity;
(l) Less than 90% of the issued and outstanding Capital Stock of the
Restricted Subsidiaries of the Borrower shall be owned, directly or indirectly,
by the Borrower and by management of the Borrower; except that, with respect to
the Australian subsidiaries, Borrower shall own less than 50% of the Capital
Stock of such subsidiaries, and with respect to CCC-Houston, Borrower shall own
less than 79% of such subsidiary;
(m) The Borrower or any Subsidiary shall fail to comply in any
material respect with the Communications Act, or any rule or regulation
promulgated by the FCC;
(n) Any material Necessary Authorization shall be revoked; or there
shall occur a material default under any material Necessary Authorization by
the Borrower or any Subsidiary beyond any applicable grace period; or any
proceedings shall in any way be brought by any
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Person to challenge the validity or enforceability of any material Necessary
Authorization and the FCC shall designate the Necessary Authorization for a
revocation hearing; or proceedings for the renewal of any material Necessary
Authorization shall not be commenced at least 90 days prior to the expiration
thereof; or any material Necessary Authorization shall expire due to
termination, nonrenewal or for any other reason, or shall be designated for a
revocation hearing;
(o) Any lease of the Borrower or any Restricted Subsidiary shall
terminate or cease to be effective, and termination or cessation thereof could
reasonably be expected to have a Material Adverse Effect; provided, however,
that termination or cessation of a lease shall not constitute an Event of
Default if another lease reasonably satisfactory to the Determining Lenders is
contemporaneously substituted therefor;
(p) Any material provision of any Loan Document shall for any reason
cease to be valid and binding on or enforceable against any party to it (other
than the Administrative Lender or any Lender) in all material respects, or any
such party shall so state in writing; or
(q) There shall exist any breach or default of any management
agreement or contract of the Borrower or any Restricted Subsidiary, or any such
management agreement or contract shall terminate in accordance with its terms
and shall not be renewed among the parties upon substantially similar terms,
and such breach, default or termination could reasonably be expected to have a
Material Adverse Effect.
Section 8.2 Remedies. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in Section
8.1(f) or (g) hereof, the Administrative Lender shall, upon the direction of
the Determining Lenders, terminate the Commitments and/or declare the principal
of and interest on the Advances and all Obligations and other amounts owed
under the Loan Documents to be forthwith due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived, anything in the Loan Documents to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Section
8.1(f) or (g) hereof, such principal, interest and other amounts shall
thereupon and concurrently therewith become due and payable and the Commitments
shall forthwith terminate, all without any action by the Administrative Lender,
any Lender or any holders of the Notes and without presentment, demand, protest
or other notice of any kind, all of which are expressly waived, anything in the
Loan Documents to the contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Lender may (or, upon the direction of the Determining Lenders,
shall) demand upon the Borrower to, and forthwith upon such demand, the
Borrower shall, pay to the Administrative Lender in same day funds at the
office of the Administrative Lender on such demand for deposit in the L/C Cash
Collateral Account, an amount equal to the maximum amount available to be drawn
under the
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Letters of Credit then outstanding; provided, however, that upon the occurrence
of an Event of Default pursuant to Section 8.1(f) or 8.1 (g) hereof, such
amount shall become immediately due and payable without the requirement of any
action on the part of Administrative Lender.
(d) The Administrative Lender, and the Lenders may exercise all of the
post-default rights granted to them under the Loan Documents or under
Applicable Law.
(e) The rights and remedies of the Administrative Lender and the
Lenders hereunder shall be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate. If with respect to
any proposed LIBOR Advance for any Interest Period, any Lender determines that
(i) deposits in dollars (in the applicable amount) are not being offered to
that Lender in the relevant market for such Interest Period or (ii) the LIBOR
Basis for such proposed LIBOR Advance does not adequately cover the cost to
such Lender of making and maintaining such proposed LIBOR Advance for such
Interest Period, such Lender shall forthwith give notice thereof to the
Borrower, whereupon until such Lender notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligation of
such Lender to make LIBOR Advances shall be suspended.
Section 9.2 Illegality. If any applicable law, rule or regulation, or
any change therein or adoption thereof, or interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or its LIBOR Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for such Lender (or its LIBOR
Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall
so notify the Borrower and the Administrative Lender. Before giving any notice
to the Borrower pursuant to this Section, the notifying Lender shall designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for giving such notice and will not, in the sole judgment
of the Lender, be materially disadvantageous to the Lender. Upon receipt of
such notice, notwithstanding anything contained in Article 2 hereof, the
Borrower shall repay in full the then outstanding principal amount of each
LIBOR Advance owing to the notifying Lender, together with accrued interest
thereon, on either (a) the last day of the Interest Period applicable to such
Advance, if the Lender may lawfully continue to maintain and fund such Advance
to such day, or (b) immediately, if the Lender may not lawfully continue to
fund and maintain such Advance to such day. Concurrently with repaying each
affected LIBOR Advance owing to such Lender, notwithstanding anything contained
in Article 2 hereof, the Borrower shall borrow a Base Rate Advance from such
Lender, and such Lender shall make such Base Rate Advance, in an amount
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such that the outstanding principal amount of the Advances owing to such Lender
shall equal the outstanding principal amount of the Advances owing immediately
prior to such repayment.
Section 9.3 Increased Costs.
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof or
compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any tax,
duty or other charge (net of any tax benefit engendered thereby) with respect
to its LIBOR Advances or its obligation to make such Advances, or shall change
the basis of taxation of payments to a Lender (or to its LIBOR Lending Office)
of the principal of or interest on its LIBOR Advances or in respect of any
other amounts due under this Agreement, as the case may be, or its obligation
to make such Advances (except for changes in the rate of tax on the overall net
income of the Lender or its LIBOR Lending Office and franchise taxes imposed
upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a Lender's LIBOR
Lending Office or shall impose on the Lender (or its LIBOR Lending Office) or
on the United States market for certificates of deposit or the London interbank
market any other condition affecting its LIBOR Advances or its obligation to
make such Advances;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material, then, within 15 days after demand by a Lender, the Borrower agrees to
pay to such Lender such additional amount as will compensate such Lender for
such increased costs or reduced amounts. The affected Lender will as soon as
practicable notify the Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section and will designate a different LIBOR Lending Office or
other lending office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole judgment of the affected
Lender made in good faith, be disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder and
calculations therefor shall be conclusive in the absence of manifest error. In
determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this
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Section, the Borrower may at any time, upon at least five Business Days' prior
notice to the Lender, after reimbursement to the Lender by the Borrower in
accordance with this Section of all costs incurred, prepay in full the then
outstanding LIBOR Advances of the Lender, together with accrued interest
thereon to the date of prepayment, along with any reimbursement required under
Section 2.9 hereof. Concurrently with prepaying such LIBOR Advances, the
Borrower shall borrow a Base Rate Advance from the Lender, and the Lender shall
make such Base Rate Advance, in an amount such that the outstanding principal
amount of the Advances owing to such Lender shall equal the outstanding
principal amount of the Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances. If notice has been given
pursuant to Section 9.1, 9.2 or9.3 hereof suspending the obligation of a Lender
to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or
prepaid, then, unless and until the Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as LIBOR Advances shall be made instead
as Base Rate Advances.
Section 9.5 Capital Adequacy. If either (a) the introduction of or any
change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by a Lender or any corporation controlling such
Lender (any event or occurrence in clauses (a) or (b) above being a "Regulatory
Modification"), and such Lender reasonably determines that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
or Advances hereunder and other commitments or advances of such Lender of this
type, then, upon demand by such Lender, subject to Section 11.10, the Borrower
shall immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender with respect to
such circumstances (collectively, "Additional Costs"), to the extent that such
Lender reasonably determines in good faith such increase in capital to be
allocable to the existence of such Lender's Commitment hereunder.
Notwithstanding the foregoing, any Lender's demand for Additional Costs shall
not include any Additional Costs with respect to any period more than 180 days
prior to the date that such Lender gives notice to the Borrower of such
Additional Costs unless the effective date of the Regulatory Modification which
results in the right to receive Additional Costs is retroactive (the
"Regulatory Modification Retroactive Effective Date"). If any Regulatory
Modification has a Regulatory Modification Retroactive Effective Date and any
Lender demands compensation within 180 days after the date setting the
Regulatory Modification Retroactive Effective Date (the "Regulatory
Modification Set Date"), such Lender shall have the right to receive such
Additional Costs from the Regulatory Modification Retroactive Effective Date.
If a Lender does not demand such Additional Costs within 180 days after the
Regulatory Modification Set Date, such lender may not receive payment of
Additional Costs with respect to any period more than 180 days prior to such
demand. A certificate as to such amounts submitted to the Borrower by a Lender
hereunder, shall, in the absence of demonstrable error, be conclusive and
binding for all purposes.
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ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 Agreement Among Lenders. The Lenders agree among
themselves that:
(a) Administrative Lender. Each Lender hereby appoints the
Administrative Lender as its nominee in its name and on its behalf, to receive
all documents and items to be furnished hereunder; to act as nominee for and on
behalf of all Lenders under the Loan Documents; to take such action as may be
requested by Determining Lenders, provided that, unless and until the
Administrative Lender shall have received such requests, the Administrative
Lender may take such administrative action, or refrain from taking such
administrative action, as it may deem advisable and in the best interests of
the Lenders; to arrange the means whereby the proceeds of the Advances of the
Lenders are to be made available to the Borrower; to distribute promptly to
each Lender information, requests and documents received from the Borrower, and
each payment (in like funds received) with respect to any of such Lender's
Advances, fee or other amount; and to deliver to the Borrower requests,
demands, approvals and consents received from the Lenders. Administrative
Lender agrees to promptly distribute to each Lender, at such Lender's address
set forth below information, requests, documents and payments received from the
Borrower.
(b) Replacement of Administrative Lender. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the Administrative Lender or any successor Administrative
Lender ever resign as Administrative Lender, or should the Administrative
Lender or any successor Administrative Lender ever be removed with or without
cause by the Determining Lenders, then the Lender appointed by the other
Lenders shall forthwith become the Administrative Lender, and the Borrower and
the Lenders shall execute such documents as any Lender may reasonably request
to reflect such change. Any resignation or removal of the Administrative Lender
or any successor Administrative Lender shall become effective upon the
appointment by the Lenders of a successor Administrative Lender; provided,
however, that if the Lenders fail for any reason to appoint a successor within
60 days after such removal or resignation, the Administrative Lender or any
successor Administrative Lender (as the case may be) shall thereafter have no
obligation to act as Administrative Lender hereunder.
(c) Expenses. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any reasonable expenses paid by the Administrative
Lender directly and solely in connection with any of the Loan Documents if
Administrative Lender does not receive reimbursement therefor from other
sources within 60 days after the date incurred, unless payment of such fees is
being diligently disputed by such Lender or the Borrower in good faith. Any
amount so paid by the Lenders to the Administrative Lender shall be returned by
the Administrative Lender pro rata to each paying Lender to the extent later
paid by the Borrower or any other Person on the Borrower's behalf to the
Administrative Lender.
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(d) Delegation of Duties. The Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Lender. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or
teletype message, statement, order, or other document or conversation
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected by the Administrative Lender. The
Administrative Lender may, in its reasonable judgment, deem and treat the payee
of any Note as the owner thereof for all purposes hereof.
(f) Limitation of Administrative Lender's Liability. Neither the
Administrative Lender nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or wilful misconduct. Except as aforesaid, the
Administrative Lender shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Lender
shall not be compelled to do any act hereunder or to take any action towards
the execution or enforcement of the powers hereby created or to prosecute or
defend any suit in respect hereof, unless indemnified to its satisfaction
against loss, cost, liability and expense. The Administrative Lender shall not
be responsible in any manner to any Lender for the effectiveness,
enforceability, genuineness, validity or due execution of any of the Loan
Documents, or for any representation, warranty, document, certificate, report
or statement made herein or furnished in connection with any Loan Documents, or
be under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of any
Loan Documents on the part of the Borrower. To the extent not reimbursed by the
Borrower, each Lender hereby severally, but not jointly, indemnifies and holds
harmless the Administrative Lender, pro rata according to its Specified
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and/or
disbursements of any kind or nature whatsoever which may be imposed on,
asserted against, or incurred by the Administrative Lender in any way with
respect to any Loan Documents or any action taken or omitted by the
Administrative Lender under the Loan Documents (including any negligent action
of the Administrative Lender), except to the extent the same result from gross
negligence or wilful misconduct by the Administrative Lender.
(g) Liability Among Lenders. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts or
omissions in bad faith.
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(h) Rights as Lender. With respect to its commitment hereunder, the
Advances made by it and Note issued to it, the Administrative Lender shall have
the same rights as a Lender and may exercise the same as though it were not the
Administrative Lender, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Lender in its
individual capacity. The Administrative Lender or any Lender may accept
deposits from, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower and any of its Affiliates, and any Person
who may do business with or own securities of the Borrower or any of its
Affiliates, all as if the AdministrativeLender were not the Administrative
Lender hereunder and without any duty to account therefor to the Lenders.
Section 10.2 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements referred to in Sections
4.1(j), 6.1 and 6.2 hereof, and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Lender or any other Lender and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
Section 10.3 Benefits of Article. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders or the
Borrower, as applicable; consequently, no Person other than Lenders or the
Borrower shall be entitled to rely upon, or to raise as a defense, in any
manner whatsoever, the failure of the Administrative Lender or any Lender to
comply with such provisions.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement shall be
in writing and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after
deposit in the mail, designated as registered mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, or one day after being delivered to the telegraph
office or sent out by telex addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:
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(i) If to the Borrower, at:
Clear Channel Communications, Inc.
7710 Jones-Maltsberger, Suite 600
San Antonio, Texas 78216
Attn: Randall T. Mays, Vice President-Treasurer
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Thomas E. Carter, Senior Vice President
(iii) If to a Lender, at its address shown below its name
on the signature pages hereof, or if applicable, set
forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the preparation, negotiation, execution and delivery of
thisAgreement and the other Loan Documents, the transactions contemplated
hereunder and thereunder, and the making of Advances and the issuance of
Letters of Credit hereunder, including without limitation the reasonable fees
and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the administration of the transactions contemplated in this
Agreement and the other Loan Documents, the preparation, negotiation, execution
and delivery of any waiver, amendment or consent by the Lenders relating to
this Agreement or the other Loan Documents; and
(c) all reasonable costs, out-of-pocket expenses and attorneys' fees
of the Administrative Lender and each Lender incurred for enforcement,
collection, restructuring, refinancing and "work-out", or otherwise incurred in
obtaining performance under the Loan Documents, and all reasonable costs and
out-ofpocket expenses of collection if default is made in the payment of the
Notes, which in each case shall include without limitation reasonable fees and
expenses of consultants,counsel for the Administrative Lender and any Lender,
and administrative fees for the Administrative Lender.
Section 11.3 Waivers. The rights and remedies ofthe Lenders under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Administrative Lender or any Lender
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in exercising any right shall operate as a waiver of such right. The Lenders
expressly reserve the right to require strict compliance with the terms of this
Agreement in connection with any funding of a request for an Advance and the
Issuing Bank expressly reserves the right to require strict compliance with the
terms of this Agreement in connection with any issuance of aLetter of Credit.
In the event that any Lender decides to fund an Advance or the Issuing Bank
decides to issue a Letter of Credit at a time when the Borrower is not in
strict compliance with the terms of this Agreement, such decision by such
Lender shall not be deemed to constitute an undertaking by the Lender to fund
any further requests for Advances or by the Issuing Bank to issue any
additional Letter of Credit or preclude the Lenders from exercising any rights
available under the Loan Documents or at law or equity. Any waiver or
indulgence granted by the Lenders shall not constitute a modification of this
Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Lenders at variance with
the terms of the Agreement such as to require further notice by the Lenders of
the Lenders' intent to require strict adherence to the terms of this Agreement
in the future. Any such actions shall not in any way affect the ability of the
Administrative Lender or the Lenders, in their discretion, to exercise any
rights available to them under this Agreement or under any other agreement,
whether or not the Administrative Lender or any of the Lenders are a party
thereto, relating to the Borrower.
Section 11.4 Determination by the Lenders Conclusive and Binding. Any
material determination required or expressly permitted to be made by the
Administrative Lender or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be conclusive and binding on all parties.
Section 11.5 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, each Lender and any subsequent
holder of any Note, and any assignee or participant in any Note is hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or any other Person, any such notice being hereby expressly
waived, to set-off, appropriate and apply any deposits (general or special
(except trust and escrow accounts), time or demand, including without
limitation Indebtedness evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other Indebtedness at any time held or
owing by such Lender or holder to or for the credit or the account of the
Borrower, against and on account of the Obligations and other liabilities of
the Borrower to such Lender or holder, irrespective of whether or not (a) the
Lender or holder shall have made any demand hereunder, or (b) the Lender or
holder shall have declared the principal of and interest on the Advances and
other amounts due hereunder to be due and payable as permitted by Section 8.2
and although such obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by any Lender or by any assignee,
participant or subsequent holder of any Note shall be subject to pro rata
treatment of all Obligations and other liabilities hereunder.
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Section 11.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
(c) A Lender may at any time sell participations in all or any part of
its Advances (collectively, "Participations") to any banks or other financial
institutions ("Participants") provided that such Participation shall not confer
on any Person (other than the parties hereto) any right to vote on, approve or
sign amendments or waivers, or any other independent benefit or any legal or
equitable right, remedy or other claim under this Agreement or any other Loan
Documents, other than the right to vote on, approve, or sign amendments or
waivers or consents with respect to items that would result in (i) any increase
in the commitment of any Participant; or (ii)(A) the extension of the date of
maturity of, or (B) the extension of the due date for any payment of principal,
interest or fees respecting, or (C) the reduction of the amount of any
installment of principal or interest on or the change or reduction of any
mandatory reduction required hereunder, or (D) a reduction of the rate of
interest on, the Advances, the Letters of Credit, or the Reimbursement
Obligations, or change in Applicable Margin; or (iii) the release of security
for the Obligations, including without limitation any guarantee or Pledged
Stock; or (iv) the reduction of any fees payable hereunder. Notwithstanding
the foregoing, the Borrower agrees that the Participants shall be entitled to
the benefits of Article 9 and Section 11.5 hereof as though they were Lenders
and the Lenders may provide copies of all financial information received from
the Borrower to such Participants. To the fullest extent it may effectively do
so under Applicable Law, the Borrower agrees that any Participant may exercise
any and all rights of banker's lien, set-off and counterclaim with respect to
this Participation as fully as if such Participant were the holder of the
Advances in the amount of its Participation.
(d) Each Lender may assign to one or more financial institutions or
funds organized under the laws of the United States, or any state thereof, or
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "Assignee")
its rights and obligations under this Agreement and the other Loan Documents up
to a total of 49% of its Specified Percentage of the Commitment; provided,
however, that (i) each such assignment shall be subject to the prior written
consent of the Administrative Lender and Borrower, which approval shall not be
unreasonably withheld (provided that without the consent of the Borrower or the
Administrative Lender, any Lender may make assignments to its Affiliates or
another Lender), (ii) each such assignment shall be of a constant, and not a
varying, percentage of the Lender's rights and obligations under this
Agreement, (iii) the amount of the Commitment, Advances and Reimbursement
Obligations being assigned pursuant to each such assignment (determined as of
the date of the assignment with respect to such assignment) shall in no event
be less than $5,000,000 and which is an integral multiple of $1,000,000, (iv)
the applicable
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Lender, Administrative Lender and applicable Assignee shall execute and deliver
to the Administrative Lender an Assignment and Acceptance Agreement (an
"Assignment Agreement") in substantially the form of Exhibit I hereto, together
with the Notes subject to such assignment, (v) the Assignee or the Lender
executing the Assignment as the case may be, shall deliver to the
Administrative Lender a processing fee of $2,500 and (vi) notwithstanding
anything herein to the contrary, any Lender may assign up to a total of 100% of
its Specified Percentage of the Commitment with the prior written consent of
the Borrower and the Administrative Lender, which consent may be withheld for
any reason or for no reason. Upon such execution, delivery and acceptance from
and after the effective date specified in each Assignment, which effective date
shall be at least three Business Days after the execution thereof, (A) the
Assignee thereunder shall be party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment,
have the rights and obligations of a Lender hereunder and (B) the assigning
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment, relinquish such rights and be
released from such obligations under this Agreement. The Borrower shall not be
liable for any fees or expenses of the Administrative Lender, any Lender, or
any Assignee, incurred in connection with such an Assignment.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Note to any
Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S.
Board and any Operating Circular issued by such Federal Reserve Bank; provided,
however, that no such assignment under this clause (e) shall release the
assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender
and an Assignee, and any note or notes subject to such assignment, the Borrower
shall, within three Business Days after its receipt of such Assignment
Agreement, at its own expense, execute and deliver to the Administrative Lender
in exchange for the surrendered Notes new Notes to the order of such Assignee
in an amount equal to the portion of the Advances, Reimbursement Obligations
and Commitment assigned to it pursuant to such Assignment Agreement and new
Notes to the order of the Administrative Lender in an amount equal to the
portion of the Advances and Commitment retained by it hereunder. Such new notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment Agreement and shall otherwise be in substantially the form of
Exhibit A hereto.
(g) No Lender may, without the prior consent of the Borrower, which
shall not be unreasonably withheld, in connection with any assignment or
Participation or proposed assignment or Participation pursuant to this Section
11.6, disclose to the Assignee or Participant or proposed Assignee or
Participant, any information (which is not otherwise publicly available)
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower, unless such proposed assignee or participant agrees to keep such
information confidential and signs a confidentiality agreement in a form
substantially similar to the confidentiality agreement signed
79
<PAGE> 85
by the Persons who were Lenders on the Agreement Date. The Borrower may not
prohibit any Participation by withholding its consent pursuant to this Section
11.6(g).
(h) Except as specifically set forth in this Section 11.6, nothing in
this Agreement or any other Loan Documents, expressed or implied, is intended
to or shall confer on any Person other than the respective parties hereto and
thereto and their successors and assignees permitted hereunder and thereunder
any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
Section 11.7 Release of Collateral. At the Borrower's option, Borrower
may request that the lien on the Capital Stock of Borrower's Subsidiaries be
released in the event that (i) Borrower obtains a senior unsecured debt rating
of at least BBB- from S&P or Baa3 from Moody's and (ii) no Default or Event of
Default has occurred and is continuing. Upon receipt of such request, the
Administrative Lender shall release such Collateral.
Section 11.8 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.9 Severability. Any provision of this Agreement which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.10 Interest and Charges. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to receive, collect or apply,
as interest on the Obligations, any amount in excess of the Maximum Amount. If
any Lender or participant ever receives, collects or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated hereunder as such; and if principal
is paid in full, any remaining excess shall be paid to the Borrower. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, the Borrower and the Lenders shall, to
the maximum extent permitted under Applicable Law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effect thereof, and (c) amortize,
prorate, allocate and spread in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations so that the interest
rate is uniform throughout the entire term of the Obligations; provided,
however, that if the Obligations are paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Amount, the Lenders
shall refund to the Borrower the amount of such excess or credit the amount of
such excess against the total principal amount of the Obligations owing, and,
in such event, the Lenders shall not be subject to any penalties provided by
any laws for contracting for, charging
80
<PAGE> 86
or receiving interest in excess of the Maximum Amount. This Section shall
control every other provision of all agreements pertaining to the transactions
contemplated by or contained in the Loan Documents.
Section 11.11 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.12 Amendment and Waiver. The provisions of this Agreement
may not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such
amendment, modification or waiver shall be made (a) without the consent of all
Lenders, if it would (i) increase the Specified Percentage or commitment of any
Lender, or (ii) extend or postpone any Commitment Reduction, extend or postpone
the date of payment or maturity of, extend the due date for any payment of
principal or interest on, reduce the amount of any installment of principal or
interest on, or reduce the rate of interest on, any Advance, the Reimbursement
Obligations, fees or other amounts owing under any Loan Documents, or (iii)
release any security for or guaranty of the Obligations (except pursuant to
this Agreement), or (iv) reduce the fees payable hereunder, or (v) revise this
Section 11.12, or (v) waive the date for payment of any of the Obligations, or
(vi) amend the definition of Determining Lenders, (vii) revise Sections 2.5(b),
(c) or (d) hereof or (vii) revise Sections 2.6(b) or (c) hereof; or (b) without
the consent of the Administrative Lender, if it would alter the rights, duties
or obligations of the Administrative Lender. Neither this Agreement nor any
term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Administrative Lender
and, in the case of an amendment, by the Borrower.
Section 11.13 Exception to Covenants. Neither the Borrower nor any
Restricted Subsidiary shall be deemed to be permitted to take any action or
fail to take any action which is permitted as an exception to any of the
covenants contained herein or which is within the permissible limits of any of
the covenants contained herein if such action or omission would result in the
breach of any other covenant contained herein.
Section 11.14 No Liability of Issuing Bank. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any Lender nor any of their respective officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit, except for any payment
made upon the Issuing Bank's gross negligence or willful misconduct; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the
81
<PAGE> 87
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under
a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit other
than pursuant to the Uniform Commercial Code Section 5-114. In furtherance and
not in limitation of the foregoing, the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Section 11.15 Credit Agreement Governs. In the event of any conflict
between the terms of this Agreement and any terms of any other Loan Document,
the terms of this Agreement shall control.
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(b),
TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT
THE PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925,
AS AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT
THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVELENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY
AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT
AND MAKING ANY ADVANCES HEREUNDER.
SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL
82
<PAGE> 88
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
83
<PAGE> 89
IN WITNESS WHEREOF, this Amended and Restated Credit Agreement is
executed as of the date first set forth above.
BORROWER: CLEAR CHANNEL COMMUNICATIONS, INC.
By /s/ RANDY MAYS
------------------------------
Title: Vice President
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By /s/ THOMAS E. CARTER
------------------------------
Thomas E. Carter,
Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.
as a Lender
Specified Percentage:
0.09167
By /s/ THOMAS E. CARTER
------------------------------
Thomas E. Carter,
Senior Vice President
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Thomas E. Carter,
Senior Vice President
<PAGE> 90
BANK OF BOSTON
Specified Percentage:
0.05833
By ILLEGIBLE
------------------------------
Title Assistant Vice President
---------------------------
100 Federal Street
Boston, Massachusetts 02110
Attn: Mark S. Denomme,
Vice President
<PAGE> 91
BANK OF MONTREAL, CHICAGO BRANCH
Specified Percentage:
0.05833
By /s/ RENE ENCARNACION
----------------------------
Title Director
------------------------
430 Park Avenue
16th Floor
New York, New York 10022
Attn: Ola Anderssen
<PAGE> 92
THE BANK OF NEW YORK
Specified Percentage
0.06833
By /s/ JOHN MATTIO
------------------------------
Title Vice President
---------------------------
One Wall Street, 16th Floor South
New York, New York 10286
Attn: Edward F. Ryan, Jr.,
Vice President
<PAGE> 93
ABN AMRO BANK N.V., HOUSTON AGENCY
Specified Percentage:
0.05833
By /s/ MICHAEL N. OAKES
-------------------------------
Title Vice President
----------------------------
By /s/ ILLEGIBLE
-------------------------------
Title Assistant Vice President
----------------------------
3 Riverway, Suite 1700
Houston, Texas 77056
Attn: Michael N. Oakes,
Vice President
<PAGE> 94
THE BANK OF CALIFORNIA, N.A.
Specified Percentage:
0.05
By /s/ GAIL L. FLETCHER
------------------------------
Title Vice President
---------------------------
400 California Street
San Francisco, California 94104
Attn: Gail Fletcher
Vice President
<PAGE> 95
CITIBANK, N.A.
Specified Percentage:
0.04167
By /s/ ROBERT A. KELLER
------------------------------
Title Vice President
---------------------------
399 Park Avenue, 4th Floor
New York, New York 10043
Attn: Robert Keller
<PAGE> 96
NATWEST BANK N.A.
Specified Percentage:
5.83333%
By /s/ JEFFREY H. HOFF
------------------------------
Title Jeffrey H. Hoff, Vice President
---------------------------
175 Water Street
New York, New York 10038
Attn: Jeffrey H. Hoff,
Vice President
<PAGE> 97
CORESTATES BANK, N.A.
Specified Percentage:
0.03333
By /s/ ILLEGIBLE
-----------------------------
Title Vice President
--------------------------
1339 Chestnut Street, 10th Floor
Philadelphia, Pennsylvania 19101
Attn: Douglas E. Blackman,
Vice President
<PAGE> 98
SOCIETY NATIONAL BANK
Specified Percentage:
0.04167
By /s/ JASON R. WEAVER
------------------------------
Title Assistant Vice President
---------------------------
Media Finance Division
127 Public Square
Cleveland, Ohio 44114-1306
Attn: Jason R. Weaver
Assistant Vice President
<PAGE> 99
CIBC INC.
Specified Percentage:
0.05833
By /s/ PAMELA H. FRIEDMAN
--------------------------------
Title Vice President
----------------------------
425 Lexington Avenue
New York, New York 10017
Attn: Pamela H. Friedman
Vice President
<PAGE> 100
TORONTO DOMINION (TEXAS), INC.
Specified Percentage:
.05
By /s/ DIANE BAILEY
-------------------------------
Title Vice President
----------------------------
Houston Agency
909 Fannin Street, 17th Floor
Houston, Texas 77010
Attn: Diane Bailey
<PAGE> 101
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
Specified Percentage
0.04167
By /s/ ILLEGIBLE
-------------------------------
Title Vice President
----------------------------
Specialized Industries/Communications
One First Union Center TW-19
301 South College Street
Charlotte, North Carolina 28288-0735
Attn: Lloyd R. Sams,
Vice President
<PAGE> 102
BANQUE PARIBAS
Specified Percentage:
0.03333
By /s/ THOMAS G. BRANDT
-----------------------------------
Title Group Vice President/Vice President
-----------------------------------
2029 Century Park East, Suite 3900
Los Angeles, California 90067
Attn: Thomas G. Brandt
<PAGE> 103
FIRST INTERSTATE BANK OF TEXAS, N.A.
Specified Percentage:
0.04167
By /s/ Chuck Bridgeman
--------------------------------
Title Vice President
-----------------------------
700 North St. Mary's #300
San Antonio, Texas 78205
Attn: Charles Bridgeman
<PAGE> 104
SOCIETE GENERALE
Specified Percentage:
0.04167
By /s/ Bryan G. Petermann
---------------------------
Title Bryan G. Peterman
-----------------------
Vice President
1221 Avenue of the Americas
New York, New York 10020
Attn: Bryan Petermann
<PAGE> 105
THE SUMITOMO BANK, LIMITED
Specified Percentage:
0.03333 /s/ Harumitsu Seki
By Harumitsu Seki
-----------------------------------
Title General Manager
--------------------------------
700 Louisiana, Suite 1750
Houston, Texas 77002
Attn: Michael Shyrock
<PAGE> 106
THE LONG-TERM CREDIT BANK OF JAPAN
LIMITED, NEW YORK BRANCH
Specified Percentage:
0.03333 /s/ Satoru Otsubo
By Satoru Otsubo
----------------------------------
Title Joint General Manager
------------------------------
165 Broadway
New York, New York 10006
Attn: Mr. T.J. Fukunaga
<PAGE> 107
MELLON BANK, N.A.
Specified Percentage:
0.04167
By /s/ LISA M. PELLOW
-----------------------------
Title Vice President
--------------------------
One Mellon Bank Center, Room 4440
Pittsburgh, PA 15258-0001
Attn: Lisa M. Pellow
with a copy to:
Three Mellon Bank Center, 23rd Floor
Pittsburgh, PA 15259
Attn: Loan Administration
<PAGE> 108
PNC BANK, NATIONAL ASSOCIATION
Specified percentage
0.03333
By /s/ Marlene S. Dooner
----------------------------------
Title Marlene S. Dooner
-------------------------------
Vice President
Broad & Chestnut Streets
Philadelphia, PA 19101
Attn: Marlene S. Dooner
<PAGE> 109
SHAWMUT BANK CONNECTICUT, N.A.
Specified Percentage:
0.03333
By /s/ Robert F. West
-------------------------------
Title Director
----------------------------
777 Main Street, MSN 397
Hartford, Connecticut 06115
Attn: Wendy E. Klepper
<PAGE> 1
EXHIBIT 99(c)(1)
TENDER OFFER AGREEMENT
BETWEEN
CLEAR CHANNEL RADIO, INC.
AND
HEFTEL BROADCASTING CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 THE OFFER.................................................... 1
1.1 The Offer.................................................... 1
1.2 Schedule 14D-1............................................... 2
1.3 Shareholder Lists............................................ 2
1.4 Company Action............................................... 3
1.5 Stock Options and Warrants................................... 3
1.6 Closing...................................................... 4
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PARENT..................... 4
2.1 Organization, Standing and Power............................. 4
2.2 Authority.................................................... 4
2.3 Brokers...................................................... 5
2.4 Financing.................................................... 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 5
3.1 Organization................................................. 5
3.2 Capitalization............................................... 5
3.3 Authority.................................................... 6
3.4 Brokers...................................................... 6
3.5 Board Actions................................................ 6
3.6 Financial Statements......................................... 6
ARTICLE 4 PRE-CLOSING COVENANTS........................................ 7
4.1 Conduct of Business by the Company Pending the
Closing...................................................... 7
4.2 No Other Bids................................................ 9
4.3 Control of Stations.......................................... 10
4.4 Renewal Application.......................................... 11
ARTICLE 5 ADDITIONAL AGREEMENTS........................................ 11
5.1 Access to Information of the Company;
Confidentiality.............................................. 11
5.2 Fees and Expenses............................................ 11
5.3 Additional Agreements........................................ 11
5.4 Consents and Filings......................................... 12
5.5 Indemnification.............................................. 12
5.6 Company Indebtedness......................................... 14
5.7 Convertible Securities....................................... 14
5.8 Parent Commission Filings.................................... 14
5.9 Maintain Listing............................................. 14
5.10 Independent Directors........................................ 15
ARTICLE 6 FCC APPROVAL................................................. 15
ARTICLE 7 CONDITIONS................................................... 15
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 8 TERMINATION.................................................. 16
8.1 Termination.................................................. 16
8.2 Effect of Termination........................................ 17
ARTICLE 9 DEFINITIONS.................................................. 19
ARTICLE 10 GENERAL PROVISIONS........................................... 19
10.1 Amendment.................................................... 19
10.2 Waiver....................................................... 20
10.3 Public Statements............................................ 20
10.4 Assignment and Binding Effect................................ 20
10.5 Governing Law................................................ 20
10.6 Entire Agreement............................................. 20
10.7 Severability................................................. 20
10.8 Titles....................................................... 21
10.9 Attorneys' Fees.............................................. 21
10.10 Multiple Counterparts........................................ 21
10.11 Notices...................................................... 21
10.12 Incorporation by Reference................................... 22
10.13 Representations and Warranties............................... 22
</TABLE>
-ii-
<PAGE> 4
TENDER OFFER AGREEMENT
THIS TENDER OFFER AGREEMENT (this "Agreement") is made and entered into
on June 1, 1996, by and between CLEAR CHANNEL RADIO, INC., a Nevada corporation
("Parent") and HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the
"Company"), with reference to the following facts:
RECITALS:
A. Parent desires to make a tender offer (the "Offer") to purchase
all of the outstanding shares of the Class A Common Stock, par value $.001 per
share, of the Company (the "Class A Common Stock") and Class B Common Stock, par
value $.001 per share, of the Company (the "Class B Common Stock" and together
with the Class A Common Stock, the "Company Common") for a price of $23 per
share (the "Offer Price") on the terms and conditions contained herein.
B. The Board of Directors of the Company, deeming the Offer to be
desirable and in the best interests of the Company and its stockholders has
authorized and approved the Offer, subject to the terms and conditions set forth
herein, and the execution and delivery of this Agreement.
C. The Board of Directors of Parent, deeming the Offer to be
desirable and in the best interests of Parent and its stockholders, has
authorized and approved the Offer, subject to the terms and conditions set forth
herein, and the execution and delivery of this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
THE OFFER
1.1 The Offer. Subject to the provisions of this Agreement, as
promptly as practicable, but in no event later than five business days after the
announcement of the Offer by Parent, Parent shall commence the Offer. Subject to
Article 8, the Offer shall remain open for 40 days; provided, however, if at any
time prior to the end of such 40 day period, shares of Company Common are
tendered to Parent which when combined with the shares of Class A Common Stock
owned by affiliates of Parent total 80% of the outstanding shares of Company
Common, Parent shall publish notice of such fact and shall extend the
termination date for the Offer by 10 days. Parent expressly reserves the right
to modify the terms of the Offer, except that, without the consent of the
<PAGE> 5
Company, Parent shall not (a) reduce the Offer Price, (b) amend or add to the
conditions to the obligations of Parent to complete the transactions
contemplated hereby set forth in Article 7 (the "Closing Conditions"), (c)
change the number of shares of Company Common subject to the Offer, (d) change
the form of consideration payable in the Offer, (e) except as set forth in this
Section 1.1, extend the termination date for the Offer, or (e) terminate the
Offer except in accordance with Section 8.1. Subject to the terms and conditions
of this Agreement, on the Closing Date, Parent shall pay for all shares of
Company Common validly tendered and not withdrawn prior to the termination of
the Offer.
1.2 Schedule 14D-1. As promptly as reasonably practicable following
the execution of this Agreement, Parent shall file with the Securities and
Exchange Commission (the "Commission") a Tender Offer Statement on Schedule
14D-1 with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1 and
the documents therein pursuant to which the Offer will be made, together with
any supplements or amendments thereto, are referred to herein as the "Offer
Documents"). Parent covenants that the Offer Documents (i) shall comply as to
form in all material respects with the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder and (ii) on the date filed with the Commission and on the
date first published, sent or given to the holders of shares of Company Common,
shall not 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 are made, not
misleading, except that no representation is made by Parent with respect to
information supplied by the Company specifically for inclusion in the Offer
Documents. Each of Parent and the Company agrees promptly to correct any
information supplied by it specifically for inclusion in the Offer Documents if
and to the extent that such information shall have become false or misleading in
any material respect, and each of Parent further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the
Commission and to be disseminated to holders of shares of Company Common, in
each case as and to the extent required by applicable Federal securities laws.
Parent agrees to provide the Company and its counsel in writing with any
comments Parent or its counsel may receive from the Commission or its staff with
respect to the Offer Documents promptly after the receipt of such comments.
1.3 Shareholder Lists. In connection with the Offer, the Company
shall (a) cause its transfer agent to furnish Parent with mailing labels
containing the names and addresses of the record holders of Company Common as of
a recent date and of those persons becoming record holders after such date,
together with copies of all security position listings and computer files and
all other information in the Company's possession or control
-2-
<PAGE> 6
regarding the beneficial owners of Company Common, and (b) furnish to Parent
such information and assistance as Parent may reasonably request in
communicating the Offer to the Company's stockholders. Subject to the
requirements of law, and except for such steps as are necessary to disseminate
the Offer, Parent shall hold in confidence the information contained in any such
labels and lists, will use such information only in connection with the Offer
and, if this Agreement is terminated, will, upon request, deliver to the Company
all copies of, and any extracts or summaries from, such information then in its
possession.
1.4 Company Action. The Company hereby consents to the Offer. The
Company shall, on the date of commencement of the Offer, file with the
Commission a Solicitation/Recommendation Statement on Schedule 14D-9 (as amended
from time to time, the "Schedule 14D-9") which shall reflect the recommendation
of the Company's Board of Directors to accept the Offer. Parent shall include
copies of such Schedule 14D-9 (excluding exhibits) with the Offer Documents to
be mailed to stockholders of the Company in connection with the Offer. The
Company covenants that the Schedule 14D-9 (i) shall comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and (ii) on the date filed with the
Commission and on the date first published, sent or given to the holders of
shares of Company Common, shall not 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 are made, not misleading, except that no representation is made
by the Company with respect to information supplied by Parent specifically for
inclusion in the Schedule 14D-9. Each of the Company and Parent agrees promptly
to correct any information supplied by it specifically for inclusion in the
Schedule 14D-9 which shall have become false or misleading in any material
respect and the Company agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the Commission and disseminated to
holders of shares of Company Common, in each case as and to the extent required
by applicable Federal securities laws. The Company agrees to provide Parent and
its counsel in writing with any comments the Company or its counsel may receive
from the Commission or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments.
1.5 Stock Options and Warrants. Whether or not then exercisable or
vested, each option to purchase Class A Common Stock of the Company or warrant
to purchase Class B Common Stock of the Company listed on Schedule 1.5 attached
hereto (collectively, "Convertible Securities" and individually, a "Convertible
Security") outstanding immediately prior to the Closing Date shall be cancelled
at the Closing Date and in settlement thereof on the Closing Date Parent shall
pay each holder of any such Convertible Security, upon receipt by Parent of any
consent of the holder thereof necessary to effect
-3-
<PAGE> 7
cancellation of such Convertible Security and written acknowledgement of such
security holder of the cancellation of such Convertible Securities in accordance
with this Section (a "Security Holder Consent and Acknowledgement"), an amount
equal to (x) the product of (i) the Offer Price minus the exercise price per
share of the Convertible Security and (ii) the total number of shares of Company
Common for which such Convertible Security is exercisable (without regard as to
whether the Convertible Security is then exercisable as to all such shares),
less (y) any federal, state, local or foreign taxes required to be withheld from
such payment. The Board of Directors of the Company (or, if appropriate, any
committee thereof) shall adopt such resolutions or take such other actions as
are necessary, subject to obtaining the applicable Security Holder Consent and
Acknowledgment to reflect the terms set forth in the prior sentence.
1.6 Closing. Unless this Agreement shall have been terminated
pursuant to the provisions of Section 8.1, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Jeffer, Mangels, Butler & Marmaro LLP, 2121 Avenue of the Stars, 10th Floor,
Los Angeles, California 90067 on the first business day after satisfaction or
waiver of the conditions set forth in Article 7 or at such other place, time and
date as the parties may mutually agree. The date and time of such Closing are
herein referred to as the "Closing Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
2.1 Organization, Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has the requisite corporate power to carry on its business as it is
now being conducted.
2.2 Authority.
(a) Parent has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent. This Agreement has been duly executed and delivered by
Parent and constitutes a valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms.
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(b) No consent, approval, order or authorization of, notice to,
or registration, declaration or filing with, any governmental entity is
necessary in connection with the execution and delivery of this Agreement by
Parent or the consummation by Parent of the transactions contemplated hereby
other than (i) the consent of the Federal Communications Commission (the "FCC")
to the transfer of control of the FCC licenses for the stations owned by the
Company's subsidiaries ("Company FCC Licenses"); (ii) compliance with the
Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); and (iii) compliance with the applicable requirements of the Exchange
Act.
2.3 Brokers. Parent has not entered into any contract, agreement,
arrangement or understanding with any person or entity which will result in the
obligation to pay any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement.
2.4 Financing. Parent has the funds, or has commitments or agreements
with financial institutions to provide the funds, in an aggregate amount not
less than the amount necessary to purchase the shares of Company Common in the
Offer, plus the amounts payable under Section 1.5 plus the aggregate amount of
payments due to the Co-Chief Executive Officers of the Company in exchange for
termination of their employment agreements with the Company and delivery of an
agreement not to compete at the Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as follows:
3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to carry on its business as it is now
being conducted.
3.2 Capitalization. The authorized capital stock of the Company and
the number, class and/or series of the shares of the capital stock of the
Company outstanding or reserved as of the date hereof is as set forth on
Schedule 3.2 attached hereto. All of the outstanding shares of the capital stock
of the Company are validly issued, fully paid, nonassessable and free of
preemptive rights and all outstanding Convertible Securities are duly authorized
and validly issued. Except as set forth on Schedules 1.5 and 3.2, there are no
shares of capital stock or other securities of the Company outstanding and no
outstanding options, warrants, subscription rights (including any preemptive
rights), calls or commitments of any character whatsoever to which the Company
is a party or is bound, requiring the issuance,
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sale or transfer by the Company of any shares of capital stock of the Company or
any securities convertible into or exchangeable or exercisable for, or rights to
purchase or otherwise acquire, any shares of capital stock of the Company.
3.3 Authority.
(a) The Company has the requisite corporate power and authority
to enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(b) No consent, approval, order or authorization of, notice to,
or registration, declaration of filing with, any governmental entity is
necessary in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions contemplated by
this Agreement, other than (i) the consent of the FCC to the transfer of control
of the Company FCC Licenses; (ii) compliance with the HSR Act; and (iii)
compliance with the applicable requirements of the Exchange Act.
3.4 Brokers. The Company has not entered into any contract,
agreement, arrangement or understanding with any person or entity which will
result in the obligation to pay any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement,
except as set forth on Schedule 3.4 attached hereto.
3.5 Board Actions. The Board of Directors of the Company (at a
meeting duly called and held) has resolved to recommend acceptance of the Offer.
3.6 Financial Statements. As of their respective dates, the Company's
Annual Reports on Form 10-K for the fiscal years ended September 30, 1994 and
1995, and Quarterly Reports for the quarters ended December 31, 1995 and March
31, 1996, and all other forms, reports, statements and documents filed by the
Company with the Commission since July 27, 1994 did not 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 therein, in the light of the
circumstances under which they were made, not misleading. All of the
consolidated financial statements of the Company included or incorporated by
reference in the Forms 10-K and 10Q filed with the Commission prior to the date
hereof were prepared in accordance with generally accepted accounting principles
consistently applied (except, as to the quarterly financials, for normal
year-end
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adjustments), and present fairly the financial position, results of operations
and changes in financial position of the Company and its consolidated
subsidiaries as of the dates and for the periods indicated. All of the
consolidated financial statements of the Company included or incorporated by
reference in the Forms 10-K and 10Q filed with the Commission between the date
hereof and the Closing Date will be prepared in accordance with generally
accepted accounting principles consistently applied (except, as to the quarterly
financials, for normal year-end adjustments), and will present fairly the
financial position, results of operations and changes in financial position of
the Company and its consolidated subsidiaries as of the dates and for the
periods indicated.
ARTICLE 4
PRE-CLOSING COVENANTS
4.1 Conduct of Business by the Company Pending the Closing.
Except as otherwise expressly contemplated hereby, the Company covenants and
agrees that prior to the Closing Date, unless Parent shall otherwise consent in
writing:
(a) The Company and the Company's subsidiaries (individually, a
"Company Subsidiary") shall conduct its business and keep its books and
accounts, records and files in the usual and ordinary manner in which such
business has been conducted in the past;
(b) The Company shall not directly or indirectly do, or permit
any Company Subsidiary to do, any of the following: (i) issue, sell, pledge,
dispose of or encumber any shares of, or any options, warrants or rights of any
kind to acquire any shares of or any securities convertible into or exchangeable
or exercisable for any shares of, capital stock of the Company or any Company
Subsidiary, except for shares of Company Common issuable upon exercise of the
issued and outstanding Convertible Securities set forth on Schedule 1.5; (ii)
except (A) in the ordinary course of business and consistent with prior
practice, (B) for transactions with non-affiliates of the Company which involves
payments up to $500,000 in the aggregate, and (C) the sale of KLTY-TV, sell,
pledge, dispose of or encumber any assets of the Company or any Company
Subsidiary which are material to the Company or any Company Subsidiary; (iii)
split, combine, subdivide or reclassify any shares of the Company's capital
stock or declare, set aside or pay any dividend or distribution, payable in
cash, stock, property or otherwise, with respect to any of the Company's capital
stock, other than the payment in cash of any accrued dividends on the Series A
Preferred Stock; (iv) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any of the Company's capital stock; (v) adopt a
plan of complete or partial liquidation or resolutions providing for the
complete or partial liquidation or dissolution of the Company or any Company
Subsidiary, except for the transactions set forth in Schedule
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4.1(b) attached hereto (collectively, the "Subsidiary Reorganizations"); (vi)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division or any
material assets thereof or, other than cash management transactions in the
ordinary course of business and consistent with prior practice, make any
investment either by purchase of stock or securities, contributions to capital,
property transfer or purchase of any property or assets of any other individual
or entity; (vii) amend or modify the corporate charter, bylaws or other
organizational documents of any Company Subsidiary, except in connection with
the Subsidiary Reorganizations, (viii) enter into any agreement or transaction
with any, or modify the terms of any existing agreement with any, affiliate,
(ix) terminate or fail to renew any Company FCC License, (x) fail to operate any
radio station owned by the Company or a Company Subsidiary in accordance with
the Communications Act, the rules, regulations and policies of the FCC and the
terms of the Company FCC Licenses, other than failures which, individually or in
the aggregate, are not reasonably anticipated to have a material adverse effect
on the business, assets, results of operations, financial condition or prospects
of the Company on a consolidated basis, (xi) cancel, discount or otherwise
compromise any accounts receivable except in the ordinary course of business
consistent with past practice, (xii) fail to file in a timely manner any
applications to renew a Company FCC License, (xiii) (other than agreements for
the sale of air time) enter into any agreement which involves payments by the
Company of $50,000 or more, unless such agreement provides for cancellation
thereof by the Company on 60 or fewer days notice and the amount payable by the
Company during the period from the date of delivery of notice of cancellation
until the date of cancellation plus any penalty for early termination does not
exceed $50,000, (xiv) enter into any barter or trade agreement that is prepaid,
(xv) apply to the FCC for any construction permit that would restrict the
current operations of any of the radio stations owned by the Company's
subsidiaries (individually, a "Station") or make any change in any Station's
buildings, leasehold improvements or fixtures, except in the ordinary course of
business or as necessary to comply with the Company's affirmative covenants in
Section 4.4(h) or (xvi) enter into any contract, agreement, commitment or
arrangement to do any of the foregoing;
(c) Except (i) for salary increases or other employee benefit
arrangements in the ordinary course of business and consistent with prior
practice, (ii) as may be required pursuant to any agreements in effect on the
date hereof, (iii) as may be required by law, neither the Company nor any
Company Subsidiary shall (1) grant any severance or termination pay to, or enter
into any new employment or severance agreement with, any officer or employee of
the Company or any Company Subsidiary, (2) adopt or amend any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred compensation,
employee benefit plan, agreement, trust fund or other arrangement for the
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benefit or welfare of employees or former employees or (3) increase the
compensation or fringe benefits of any employee or former employee or pay any
benefit not required by any existing plan, arrangement or agreement;
(d) The Company shall not directly or indirectly do, or permit
any Company Subsidiary to do, any of the following: make or revoke any material
tax election, settle or compromise any material federal, state, local or foreign
tax liability (or any other tax liability which may have a material effect on
taxable years ending after the Closing Date) or change (or make a request to any
taxing authority to change) any aspect of accounting for tax purposes in any
material respect;
(e) The Company shall deliver to Parent copies of any report,
statement or schedule filed with the Commission subsequent to the date hereof;
(f) The Company shall provide Parent with copies of the regular
monthly internal operating statements relating to the Company for the monthly
accounting periods between the date of this Agreement and the Closing Date by
the 20th day of each calendar month for the preceding calendar month, which
shall present fairly the financial position of the Company and the results of
operations for the period indicated in accordance with generally accepted
accounting principles consistently applied. Such monthly statements shall: (i)
show the actual results and budget for such month by line item, and (ii) account
for items of non-recurring income and expense separately and (iii) account for
and separately state all intercompany allocations of expenses relating to the
Company, all of which shall be presented fairly and in accordance with generally
accepted accounting principles consistently applied;
(g) The Company shall make all commercially reasonable efforts
to preserve the business organization of each Station intact, to retain
substantially as at present each Station's employees, consultants and agents,
and to preserve the goodwill of each Station's suppliers, advertisers, customers
and other having business relations with it; and
(h) The Company shall keep all tangible personal property and
real property in good operating condition (ordinary wear and tear excepted) and
repair and maintain adequate and usual supplies of inventory, office supplies,
spare parts and other materials as have been customarily maintained in the past.
The Company shall maintain in effect the casualty and liability insurance on its
assets heretofore in force.
4.2 No Other Bids. The Company shall not, directly or indirectly,
solicit, initiate or encourage (including by way of furnishing information or
assistance) any inquiry or the making of any proposal that constitutes, or
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may reasonably be expected to lead to, any inquiry or proposal that constitutes,
or may reasonably be expected to lead to, any Competing Transaction (a "Takeover
Proposal") or enter into any discussions, contracts or negotiations with respect
to any Competing Transaction and the Company shall not authorize or knowingly
permit any of its officers, directors, employees, investment bankers, attorneys,
accountants or other advisors or representatives to take any such action and the
Company will direct such parties not to take any such action. The Company
promptly shall advise Parent in writing of any Takeover Proposal and shall, in
such notice, indicate the identity of the offeror and the material terms and
conditions of any such Takeover Proposal, including, without limitation, price.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Board of Directors of the Company or any committee thereof from (a) (i)
furnishing or causing to be furnished information concerning the Company and its
businesses, properties or assets to a third party, (ii) engaging in negotiations
with a third party, (iii) taking and disclosing to the Company's stockholders a
position with respect to any Takeover Proposal (and, in connection therewith,
withdrawing or modifying the approval or recommendation by the Board of
Directors of the Offer) or (iv) entering into a Competing Transaction, but in
each case referred to in the foregoing clauses (i) through (iv) only to the
extent that prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity (A) the Board of
Directors of the Company shall conclude, after consultation with its outside
legal counsel (which may be the Company's regularly engaged legal counsel), in
good faith that such action is required under applicable law for the discharge
of its fiduciary duties, and (B) the Company provides written notice to Parent
to the effect that it is furnishing information, or affording access to
properties, books or records to, or entering into discussions or negotiations
with, such person or entity or (b) complying with Rule 14e-2 promulgated under
the Exchange Act. As used in this Agreement, "Competing Transaction" shall mean
any merger, consolidation, reorganization, share exchange or other business
combination involving the Company or any Company Subsidiary or any acquisition
in any manner of beneficial ownership of 20% or more of the outstanding shares
of any class of capital stock of the Company, or any class of the capital stock
of any Company Subsidiary, or of all or a significant portion of the assets of
the Company and the Company Subsidiaries, taken as a whole.
4.3 Control of Stations. Notwithstanding Section 4.1, until the grant
of the FCC Consent Parent shall not directly or indirectly control, manage,
supervise or direct the operation of the Company's radio stations or the conduct
of the Company's business, including, but not limited to, matters relating to
programming, personnel and finances, all of which shall remain and be solely the
responsibility of and under the complete discretion and control of each licensee
of the Company's radio stations.
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4.4 Renewal Application. In the event at the Closing the application
for renewal of the license for WAMR-FM, Miami, Florida (the "Renewal
Application") remains pending or has not become a Final Order, the parties agree
the Closing shall occur and each party hereto agrees to abide by the procedures
established in Stockholders of CBS, Inc., FCC 95-469 (rel. Nov. 22, 1995) P. P.
34-35, for processing applications for transfer of control of a license during
the pendency of an application for renewal of a station license. Without
limiting the generality of the foregoing, the Company agrees to use commercially
reasonable efforts to cooperate with Parent with the prosecution of the Renewal
Application, and Parent agrees that any interest it may acquire in such license
at Closing is subject to whatever action the FCC may ultimately take with
respect to the Renewal Application. Notwithstanding anything in this Agreement
to the contrary, this Section 4.4 shall survive the Closing until any order
issued by the FCC with respect to the Renewal Application becomes a Final Order
(for purposes hereof, "Final Order" shall have the same meaning as in Article 6
except "grant of the Renewal Application" shall be substituted for "FCC
Consent").
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Access to Information of the Company; Confidentiality. From the
date hereof to the Closing Date, the Company shall afford, and shall cause its
officers, directors, employees and agents to afford, to Parent and to the
officers, employees and agents of Parent complete access during normal business
hours at all reasonable times to the Company's officers, employees, agents,
properties, books, records and contracts, and shall furnish, and cause each
Company Subsidiary to furnish, to Parent all financial, operating and other data
and information as Parent, through its officers or employees, may reasonably
request. All information provided to Parent shall be subject to the
Confidentiality Letter Agreement, dated May 31, 1996, between Clear Channel
Radio, Inc. and the Company (the "Confidentiality Agreement").
5.2 Fees and Expenses. All costs and expenses incurred in connection
with the Offer and this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such fees and expenses; provided, however, if the
Closing occurs, Parent shall be responsible for paying all of fees and costs
payable to the investment bankers set forth on Schedule 3.4 attached hereto.
5.3 Additional Agreements. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
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5.4 Consents and Filings. In addition to Article 8, each party will
(a) within ten business days after the date hereof, make any required filings
and submissions under the HSR Act with respect to the Offer, (b) substantially
comply with any request for additional information issued by the Federal Trade
Commission, the Department of Justice or any other antitrust authority in
connection with the Offer, including the requests for production of documents
and production of witnesses for interviews or depositions, and (c) take all
reasonable actions to obtain any other consent, authorization, order or approval
of, or any exemption by, any governmental entity required to be obtained or made
in connection with the Offer and the other transactions contemplated by this
Agreement. Each party will cooperate with and promptly furnish information to
the other party in connection with obtaining such consents or making any such
filings and will promptly furnish to the other party a copy of all filings made
with a governmental agency, including, without limitation, any filings under the
HSR Act.
5.5 Indemnification.
(a) Parent shall indemnify, defend and hold harmless the
Company, each stockholder who executes the Stockholder Purchase Agreement of
even date herewith and each person who is now, or who becomes prior to the
Closing Date, an officer or director of Company or any Company Subsidiary (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses,
liabilities or judgments, or amounts that are paid in settlement with the
approval of Parent (which approval shall not be unreasonably withheld), arising
out of or related to any claim, action, suit, proceeding or investigation based
in whole or in part on or arising in whole or in part out of this Agreement or
the transactions contemplated hereby. Notwithstanding the foregoing, no
indemnity shall be available to the extent a court of competent jurisdiction
finally determines that the claim for indemnity is caused by the Company
knowingly and intentionally misrepresenting that it may enter into this
Agreement. Without limiting the foregoing, in the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Party, (i)
any counsel retained by the Indemnified Parties shall be reasonably satisfactory
to Parent; (ii) Parent shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; and (iii) Parent will use all reasonable efforts to assist in the
vigorous defense of any such matter, provided that Parent shall not be liable
for any settlement of any claim effected without its written consent, which
consent shall not be unreasonably withheld. Any Indemnified Party wishing to
claim indemnification under this Section, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Parent (but the failure
so to notify Parent shall not relieve it from any liability which it may have
under this Section except to the extent such failure materially prejudices
Parent). The Indemnified Parties as a group may
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retain only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a conflict
on any issue between the positions of any two or more Indemnified Parties. In
addition to the foregoing, and without limiting in any manner the foregoing, any
Indemnified Party shall be entitled to indemnification pursuant to any
indemnification agreement set forth on Schedule 5.5 attached hereto.
(b) From and after the Closing, Parent shall indemnify, defend
and hold harmless each person who is now, or who becomes prior to the Closing
Date, an officer or director of Company or any Company Subsidiary (the "D&O
Indemnified Parties") against all losses, claims, damages, costs, expenses,
liabilities or judgments, or amounts that are paid in settlement with the
approval of Parent (which approval shall not be unreasonably withheld), arising
out of or related to any claim, action, suit, proceeding or investigation based
in whole or in part on or arising in whole or in part out of the fact that such
person is or was a director or officer of the Company or any Company Subsidiary,
whether pertaining to any matter existing or occurring at or prior to the
Closing Date (including, without limitation, any matter relating to the
transactions contemplated hereby) and whether asserted or claimed prior to, or
at or after, the Closing Date, in each case to the full extent the Company or
the applicable Company Subsidiary would have been permitted under the law of the
State of its incorporation and its Certificate, or Articles, of Incorporation
and Bylaws to indemnify such person (and Parent shall pay expenses in advance of
the final disposition of any such action or proceeding to each D&O Indemnified
Party upon receipt of any undertaking by or on behalf of such D&O Indemnified
Party to repay such amount if it shall ultimately be determined that he or she
is not entitled to indemnification). Without limiting the foregoing, in the
event any such claim, action, suit, proceeding or investigation is brought
against any D&O Indemnified Party (whether arising before or after the Closing
Date), (i) any counsel retained by the Indemnified Parties for any period after
the Closing Date shall be reasonably satisfactory to Parent; (ii) after the
Closing Date, Parent shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received; and
(iii) after the Closing Date, Parent will use all reasonable efforts to assist
in the vigorous defense of any such matter, provided that Parent shall not be
liable for any settlement of any claim effected without its written consent,
which consent shall not be unreasonably withheld. Any D&O Indemnified Party
wishing to claim indemnification under this Section, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify Parent (but the
failure so to notify Parent shall not relieve it from any liability which it may
have under this Section except to the extent such failure materially prejudices
Parent). The Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards
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of professional conduct, a conflict on any issue between the positions of any
two or more Indemnified Parties. In addition to the foregoing, and without
limiting in any manner the foregoing, after the Closing Date any D&O Indemnified
Party shall be entitled to indemnification pursuant to any indemnification
agreement set forth on Schedule 5.5 attached hereto.
(c) The provisions of this Section 5.5 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and each D&O
Indemnified Party, and each Indemnified Party's and each D&O Indemnified Party's
heirs and representatives.
5.6 Company Indebtedness. Concurrently with the Closing, Parent shall
repay or cause to be repaid all outstanding indebtedness under the Credit
Agreement, dated as of August 19, 1994, as amended and restated as of March 13,
1996, among the Company, its subsidiaries and the lenders signatory thereto (the
"Credit Agreement") or, at Parent's option, obtain the consent of the Company's
lenders under the Credit Agreement to have such indebtedness remain outstanding.
5.7 Convertible Securities. The Company and the Company Subsidiaries
shall take such action as may be permitted under the Company's Stock Option Plan
and/or the terms of the Convertible Securities to effect the cancellation of the
Convertible Securities on the Closing Date and shall comply with all
requirements regarding income tax withholding in connection therewith. In
addition to the foregoing, the Company will use its best efforts to obtain the
Security Holder Consents and Acknowledgements referred to in Section 1.5 and to
provide Parent with such other evidence requested by Parent that no holder of
any Convertible Security will have any right to acquire any equity interest in
the Company, Parent or any of their respective subsidiaries as a result of the
exercise or conversion of any Convertible Security or other rights after the
Closing Date.
5.8 Parent Commission Filings. Between the date hereof and the
Closing Date, the Company shall, and shall cause each Company Subsidiary to,
cooperate with Parent in connection with the preparation and filing of, and
provide to Parent for inclusion or incorporation by reference in, any reports,
filings, schedules or registration statements (including any prospectus
contained in any such registration statement) to be filed by Parent with the
Commission ("Parent Filings"). Without limiting the foregoing, the Company
shall, and shall cause each Company Subsidiary to, take all reasonable actions
requested by Parent to enable Parent to include or incorporate by reference in
the Parent Filings any financial statement of the Company or any Company
Subsidiary and any auditors' report thereon.
5.9 Maintain Listing. For period of one year from and after the
Closing, Parent shall use its best efforts to cause the shares of Class A Common
Stock to remain listed or quoted on
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a recognized national exchange or National Association of Securities Dealers,
Inc. quotation system.
5.10 Independent Directors. From and after the Closing and until the
later of one year from the Closing Date or the date on which the Company no
longer is a reporting company under the Exchange Act, Parent shall cause the
Company to maintain two independent directors.
ARTICLE 6
FCC APPROVAL
Within five business days after execution of this Agreement, the
parties shall file with the FCC applications (the "FCC Applications") for the
consent of the FCC to the change in control of the holders of the Company FCC
Licenses ("FCC Consent"). The parties shall thereafter prosecute the FCC
Applications with all reasonable diligence and otherwise use commercially
reasonable efforts to obtain the FCC Consent as expeditiously as practicable and
shall use commercially reasonable efforts to cause the FCC Consent to become a
"Final Order." Each party will use commercially reasonable efforts to comply
with the reasonable requests of the FCC for further information in connection
with the FCC Applications. If reconsideration or judicial review is sought with
respect to the FCC Consent, the party affected shall vigorously oppose such
efforts for reconsideration or judicial review. Nothing in this Article 6 shall
be construed to limit a party's right to terminate this Agreement pursuant to
Article 8 hereof. As used herein, the term "Final Order" means a written action
or order issued by the FCC setting forth the FCC Consent (a) which has not been
reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with
respect to which (i) no requests have been filed for administrative or judicial
review, reconsideration, appeal or stay, and the time for filing any such
requests and for the FCC to set aside the action on its own motion (whether upon
reconsideration or otherwise) has expired, or (ii) in the event of the filing of
any such request for review, reconsideration, appeal or stay, the action
granting the FCC Consent shall have been reaffirmed or upheld and the time for
further review, reconsideration or appeal has expired without the filing of any
such action for further review or such requests have been withdrawn or denied.
ARTICLE 7
CONDITIONS
The obligations of Parent to consummate the transactions contemplated
hereby shall be subject to the fulfillment on or prior to the Closing Date of
each of the following conditions:
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7.1 The applicable waiting period under the HSR Act shall have
expired or terminated.
7.2 Subject to Section 4.4, the FCC Consent shall have become a Final
Order; provided, however, if the primary lenders for Parent do not require that
the FCC Consent becomes a Final Order in order to consummate the Closing, then
Parent's condition shall be that the FCC shall have granted the FCC Consent and
shall have given public notice of the grant of the FCC Consent.
7.3 No temporary restraining order, preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a government, regulatory or administrative agency or
commission shall be in effect which restrains or prohibits the transactions
contemplated hereby.
7.4 All representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date, except those representations and warranties which address
matters only as of a particular date shall remain true and correct in all
material respects as of such date. The Company shall have performed in all
material respects all agreements and covenants required hereby to be performed
by it prior to or at the Closing Date.
ARTICLE 8
TERMINATION
8.1 Termination. This Agreement and the Offer may be terminated, by
written notice promptly given to the other parties hereto, at any time prior to
the Closing Date:
(a) By mutual written consent of the parties;
(b) By either Parent or the Company, if the FCC denies or
dismisses the FCC Applications and the time for reconsideration or court review
under the Communications Act of 1934 with respect to such denial or dismissal
has expired and there is not pending with respect thereto a timely filed
petition for reconsideration or request for review; or
(c) By either the Company or Parent, if the Board of Directors
of the Company concludes, after taking into account the advice of outside legal
counsel (which may be the Company's regularly engaged legal counsel), that
accepting a proposed Competing Transaction is required under applicable law for
the discharge of its fiduciary duties and the Company enters into an agreement
for such Competing Transaction; provided, however, that the Company may not
terminate this Agreement pursuant to this Section 8.1(c) earlier than 48 hours
after furnishing notice to Parent of such Competing Transaction in accordance
with Section 4.2;
-16-
<PAGE> 20
(d) By either the Company or Parent if (i) the Company shall
have determined, pursuant to duly adopted resolutions of its Board of Directors,
not to recommend acceptance of the Offer, or the Company's recommendation to
accept the Offer is withdrawn or modified, or resolved to be withdrawn or
modified, by reason of receipt of a Takeover Proposal, or (ii) the Company
recommends, pursuant to duly adopted resolutions, any Takeover Proposal from a
person or entity other than Parent or its affiliates; provided, however, that
Parent shall not terminate this Agreement pursuant to this subsection if as a
result of the Company's receipt of a Takeover Proposal from a third-party the
Company, as required by applicable law as advised by outside counsel, withdraws,
modifies or amends its approval or recommendation of acceptance of the Offer but
within five business days thereafter the Company publicly reconfirms to all of
its stockholders its recommendation of acceptance of the Offer;
(e) By Parent, if the Company fails to perform or breaches any
of its material obligations or duties under this Agreement and the Company has
not cured such failure to perform or breach within 15 days after delivery of
written notice from Parent or upon a material breach of any representation and
warranty of the Company contained herein;
(f) By the Company, if Parent fails to perform or breaches any
of its material obligations or duties under this Agreement, and the defaulting
party has not cured such failure to perform or breach within 15 days after
delivery of written notice from the Company or upon a material breach of any
representation and warranty of Parent contained herein; and
(g) By either Parent or the Company, if the Closing shall not
have occurred on or before October 31, 1996 (the "Termination Date"); provided,
however, the right to terminate this Agreement under this Section 8.1(g) shall
not be available to any party whose failure to fulfill any obligation hereunder
has been the cause of, or results in, the failure of the Closing to have
occurred on or before the Termination Date.
8.2 Effect of Termination.
(a) In the event of the termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligations on the part of any party hereto, except for
the agreements set forth in Sections 5.1 and 5.5(a) and except (i) liability for
any wilful breach of any obligation, covenant or agreement contained herein or
any intentional failure of the representations and warranties contained hereto
to have been true, and (ii) (x) if the stockholders who are parties to the
Stockholder Purchase Agreement of even date herewith among such stockholders and
Parent terminate such agreement and (y) (1) the Company terminates this
Agreement pursuant to Section 8.1(c) or
-17-
<PAGE> 21
8.1(d), or (y) Parent terminates this Agreement and the Offer pursuant to
Section 8.1(c) or 8(d), the Company will pay to Parent $13.5 million within five
business days after the conditions contained in the foregoing clauses (x) and
(y) are satisfied; provided, however, if the Company is prohibited by its
principal senior lender or lenders from paying the sum required under this
clause (ii) in cash, then in lieu of such payment, the Company shall immediately
issue to the Parent a number of shares of Class A Common Stock having a fair
market value equal to such sum (determined by taking the average closing price
of the Class A Common Stock on the Nasdaq National Market for the ten (10)
business days immediately following the public announcement of the termination
of this Agreement). If the Company shall issue shares to Parent as contemplated
in the preceding sentence, such shares shall be registered under the Securities
Act and freely tradeable upon delivery, or if the foregoing is not reasonably
practicable, shall be subject to a registration rights agreement enabling Parent
to sell such shares without undue delay or expense.
(b) The Company acknowledges that the agreements contained in
Section 8.2(a)(ii) are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement. Accordingly, if the Company fails to promptly pay any amounts under
Section 8.2(a)(ii) when due, the Company shall in addition thereto pay to Parent
all costs and expenses (including fees and disbursements of counsel) incurred in
collecting such amounts together with interest on the unpaid amount from the
date such payment was required to be made until the date such payment is
received by the party entitled to such payment at a per annum rate equal to the
prime rate, published in The Wall Street Journal under the heading "Money Rates"
or a successor heading, as in effect from time to time during such period.
(c) Parent agrees that recovery of damages shall be the sole
and exclusive remedy of Parent in connection with a termination of this
Agreement for the reasons set forth in Section 8.2(a)(i). Parent also agrees
recovery of the amount set forth in Section 8.2(a)(ii) shall be the sole and
exclusive remedy of Parent in connection with a termination of this Agreement
for the reasons set forth in Section 8.2(a)(ii), regardless of the actual
damages sustained. The Company agrees that recovery of damages shall be the sole
and exclusive remedy of the Company in connection with a termination of this
Agreement for the reasons set forth in Section 8.2(a)(i). Parent hereby waives
the remedy of specific performance of the consummation of the transactions
contemplated hereby.
-18-
<PAGE> 22
ARTICLE 9
DEFINITIONS
The following terms shall have the meanings set forth in the Sections
opposite such term.
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Agreement Preamble
Class A Common Stock Recital A
Class B Common Stock Recital A
Closing 1.6
Closing Conditions 1.1
Closing Date 1.6
Commission 1.2
Company Preamble
Company Common Recital A
Company FCC Licenses Section 2.2
Company Subsidiary 4.1(a)
Competing Transaction 4.2
Confidentiality Agreement 5.1
Convertible Security or Convertible Securities 1.5
Credit Agreement 5.6
Closing Date 1.5
D&O Indemnified Parties 5.5(b)
Exchange Act 1.2
FCC 2.2
FCC Applications Article 6
FCC Consent Article 6
Final Order Article 6
HSR Act 2.2
Indemnified Parties 5.5(a)
Offer Recital A
Offer Documents 1.2
Offer Price Recital A
Parent Preamble
Parent Filings 5.8
Renewal Application 4.4
Schedule 14D-9 1.4
Security Holder Consent and Acknowledgement 1.5
Subsidiary Reorganizations 4.1(b)(v)
Takeover Proposal 4.2
Termination Date 8.1(g)
</TABLE>
ARTICLE 10
GENERAL PROVISIONS
10.1 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
-19-
<PAGE> 23
10.2 Waiver. Any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of any other party hereto or
(b) waive compliance with any of the agreements of any other party or with any
conditions to its own obligations. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of the party
making the waiver or granting the extension by a duly authorized officer. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
10.3 Public Statements. Each of the parties hereto promptly shall
advise, consult and cooperate with the other prior to issuing, or permitting any
of its subsidiaries, directors, officers, employees or agents to issue, any
press release or other statement to the press or any third-party with respect to
this Agreement or the transactions contemplated hereby; provided, however, if a
party is advised in writing by its counsel that applicable law requires such
party to make a press release or statement, such party may do so only after
consultation with the other parties hereto.
10.4 Assignment and Binding Effect. Prior to Closing, neither this
Agreement nor any of the rights or obligations hereunder may be assigned by any
party without the prior written consent of the other parties. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, transferees, assigns,
representatives, and agents and no other person shall have any right, benefit or
obligation hereunder. Notwithstanding the foregoing, the Indemnified Parties and
D&O Indemnified Parties shall be third-party beneficiaries of Section 5.5.
10.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware.
10.6 Entire Agreement. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. Notwithstanding the foregoing, this Agreement does not
supersede the Confidentiality Agreement, which shall remain in full force and
effect; provided, however, at the Closing Date, the Company shall be deemed to
have waived any provision in the Confidentiality Agreement which restricts
Parent from acquiring any shares of capital stock of the Company.
10.7 Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to
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<PAGE> 24
be invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such instrument.
10.8 Titles. The titles, captions or headings of the Articles and
Sections herein are for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
10.9 Attorneys' Fees. Should any party hereto institute any action or
proceeding at law or in equity to enforce any provision of this Agreement,
including an action for declaratory relief, or for damages by reason of an
alleged breach of any provision of this Agreement, or otherwise in connection
with this Agreement, or any provision hereof, the prevailing party shall be
entitled to recover from the losing party or parties reasonable attorneys' fees
and costs for services rendered to the prevailing party in such action or
proceeding.
10.10 Multiple 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 one and the same instrument.
10.11 Notices. Unless applicable law requires a different method of
giving notice, any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing. Assuming that
the contents of a notice meet the requirements of the specific Section of this
Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if deposited in
the United States mail, certified or registered, postage prepaid, or if
transmitted by telegraph, telecopy or other electronic written transmission
device or if sent by overnight courier service, and if addressed to the
applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States mail. If
such notice, demand or other communication is given by overnight courier, or
electronic transmission, service shall be conclusively deemed given at the time
of confirmation of delivery. The addresses for the parties are as follows:
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<PAGE> 25
If to Parent:
Clear Channel Radio, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Randal Mays
Telecopier No.: (210) 829-8080
with a copy to:
Patton Boggs, L.L.P.
2550 M Street, N.W.
Washington, D.C. 20037
Attention: Gerald J. Laporte, Esq.
Telecopier No.: (202) 457-6315
If to the Company:
6767 West Tropicana Avenue, Suite 102
Las Vegas, Nevada 89103
Attention: Mr. Carl Parmer
Telecopier: (702) 367-3491
with a copy to:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, Tenth Floor
Los Angeles, California 90067
Attention: Bruce P. Jeffer, Esq.
Telecopier No.: (310) 203-0567
Any party hereto may change its address for the purpose of receiving notices,
demands and other communications as herein provided, by a written notice given
in the aforesaid manner to the other parties hereto.
10.12 Incorporation by Reference. All Schedules attached hereto or to
be delivered in connection herewith are incorporated herein by this reference.
10.13 Representations and Warranties. All representations and
warranties of the parties contained herein shall expire, and be terminated and
extinguished, on the Closing Date.
-22-
<PAGE> 26
IN WITNESS WHEREOF, each of Parent and the Company has caused this
Agreement to be executed as of the date first written above by its officer
thereunto duly authorized.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
---------------------------
Name: Mark P. Mays
-----------------------
Title: Senior Vice President
----------------------
HEFTEL BROADCASTING
CORPORATION
By: /s/ CARL PARMER
---------------------------
Name: Carl Parmer
-----------------------
Title: President -- Co-CEO
----------------------
-23-
<PAGE> 27
LIST OF SCHEDULES
1.5 Holders of Convertible Securities
3.2 Capitalization
3.4 Fees
4.1 Subsidiary Reorganizations
5.5 Indemnification Agreements
-24-
<PAGE> 28
SCHEDULE 1.5
HOLDERS OF CONVERTIBLE SECURITIES
OPTIONS
<TABLE>
<CAPTION>
NUMBER OF EXERCISE EXPIRATION
SHARES PRICE DATE
--------- -------- ----------
<S> <C> <C> <C>
Cecil Heftel 271,075 $15.25 12/14/2005
Carl Parmer 48,264 $15.25 12/14/2005
Richard Heftel 30,000 $15.25 12/14/2005
William Tanner 30,000 $15.25 12/14/2005
David DuBose 10,000 $15.25 12/14/2005
David Haymore 5,000 $15.25 12/14/2005
Javier Luevano 5,000 $15.25 12/14/2005
Jose Valle 10,000 $15.25 12/14/2005
Julio Omana 25,000 $15.25 12/14/2005
John Kendrick 30,000 $15.25 12/14/2005
Carlos Rubio 30,000 $15.25 12/14/2005
John Mason* 10,000 $15.25 12/14/2005
Madison Graves 5,000 $18.63 11/19/2005
Javier Romero 15,000 $15.50 12/05/2005
Luis Diaz- 37,500 $14.00 06/30/2005
Albertini
John Kendrick 25,000 $10.00 08/02/2004
John Mason 5,000 $10.00 08/02/2004
-------
Total 591,839
</TABLE>
WARRANTS
1. Cecil Heftel has a warrant to purchase 806,678 shares of Class B Common
Stock of the Company at an exercise price of $1.05 per share. The
expiration date of the warrant is April 27, 1997.*
2. Mr. Robert Sevey has a warrant to purchase 43,428 shares of Class B Stock
of the Company at an exercise price of $2.29 per share. The expiration
date of the warrant is April 27, 1997.*
- -----------------------------
* Not granted under the Company's Stock Option Plan.
<PAGE> 29
SCHEDULE 3.2
COMPANY CAPITALIZATION
<TABLE>
<CAPTION>
COMPANY
CLASS AUTHORIZED OUTSTANDING
----- ---------- -----------
<S> <C> <C>
Class A Common 30,000,000 6,336,610
Stock
$0.001 par value
Class B Common 7,000,000 3,769,176
Stock
$0.001 par value
Preferred Stock 5,000,000 335,634
$0.001 par value shares of Series A
</TABLE>
The Company has outstanding options to purchase 591,839 shares of Class A Common
Stock and outstanding warrants to purchase 850,106 shares of Class B Common
Stock.
<PAGE> 30
SCHEDULE 3.4
FEES
1. Letter Agreement dated February 16, 1995, between Alex. Brown & Sons
Incorporated and the Company.
2. Letter Agreement dated March 7, 1996, between Donaldson, Lufkin &
Jenrette and the Company.
<PAGE> 31
SCHEDULE 4.1(B)
SUBSIDIARY REORGANIZATIONS
1. La Oferta, Inc., an Illinois corporation, will be merged into HBC
Chicago, Inc., a Delaware corporation.
2. Viva Broadcasting Corporation, a Florida corporation, and Viva
Acquisition Corporation, a Florida corporation, will be merged into HBC
Florida, Inc., a Delaware corporation ("HFI"). Immediately thereafter
Viva America Media Group, a Florida general partnership will be
dissolved, with HFI assuming all liabilities and receiving all assets.
<PAGE> 32
SCHEDULE 5.5
INDEMNIFICATION AGREEMENTS
1. Indemnification Agreement dated November 20, 1995 by and between the
Company and Madison B. Graves, II.
2. Indemnification Agreement dated January 1, 1993 by and between the
Company and John E. Mason.
3. Indemnification Agreement dated January 1, 1993 by and between the
Company and Carl Parmer.
4. Indemnification Agreement dated January 1, 1993 by and between the
Company and Cecil Heftel.
5. Indemnification Agreement dated January 1, 1993 by and between the
Company and Richard Heftel.
6. Indemnification Agreement dated January 1, 1993 by and between the
Company and Susan Heftel-Liquido.
7. Indemnification Agreement dated July 27, 1994 by and between the Company
and Jeffrey Amling.
<PAGE> 1
EXHIBIT 99(c)(2)
STOCKHOLDER PURCHASE AGREEMENT
This STOCKHOLDER PURCHASE AGREEMENT (this "Agreement") is made and
entered into on June 1, 1996, by and among Clear Channel Radio, Inc., a Nevada
corporation ("Purchaser"), and the stockholders listed on Exhibit A attached
hereto (each a "Stockholder", and collectively the "Stockholders") with
reference to the following facts:
A. Each Stockholder owns (1) the number of shares of Class A Common
Stock, $.001 par value per share, and Class B Common Stock, $.001 par value per
share, of the Company (collectively, the "Common Stock") set forth opposite such
Stockholder's name on Exhibit A attached hereto, in the aggregate totaling
3,516,529 shares of the Common Stock and (2) the number of shares of the Series
A Preferred Stock set forth opposite such Stockholder's name on Exhibit A hereto
(the Series A Preferred Stock and the Common Stock are collectively referred to
as the "Stocks"); and
B. The Purchaser desires to purchase and the Stockholders desire to
sell the Stocks on the terms and conditions set forth herein; and
C. In connection with this transaction, Purchaser and Heftel
Broadcasting Corporation, a Delaware corporation (the "Company"), are
simultaneously entering into a Tender Offer Agreement of even date herewith (the
"Tender Offer Agreement") providing for the making of a cash tender offer (the
"Offer") by the Purchaser for all of the outstanding shares of Common Stock.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
1. Definitions. Except as otherwise defined in this Agreement, all
terms, the first letters of which are capitalized, shall have the meanings
assigned to them in the Tender Offer Agreement.
2. Purchase of Stock. Subject to the terms and conditions set forth
herein, each Stockholder hereby agrees to sell and the Purchaser hereby agrees
to purchase, all the shares of Common Stock owned by each Stockholder (the
"Shares") on the terms set forth in the Tender Offer Agreement and the Series A
Preferred Stock for $1.00 per share plus accrued but unpaid dividends thereon.
The Closing of the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Jeffer, Mangels, Butler & Marmaro LLP, 2121
Avenue of the Stars, 10th Floor, Los Angeles, California 90067 on the first
business day after satisfaction or waiver of the conditions set forth in
Sections 11 and 12 or at such other place, time and date as the parties may
mutually agree. The date and time of such Closing are herein referred to as the
"Closing Date."
3. Stock Options and Warrants. Each Stockholder hereby consents to the
treatment prescribed by the Tender Offer Agreement with respect to each option
or warrant to purchase shares of Common Stock held by such Stockholder.
-2-
<PAGE> 3
4. Representations and Warranties of the Stockholders. Each Stockholder
hereby represents and warrants to the Purchaser as follows:
(a) Authority. This Agreement has been duly executed and delivered
by such Stockholder and constitutes such Stockholder's valid and binding
obligation enforceable in accordance with its terms except as enforcement may be
limited by bankruptcy, insolvency, and other similar laws affecting the
enforcement of creditors' right generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time or both) under any provision of any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to him or to his property
or assets. No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, is
required by or with respect to him in connection with the execution and delivery
of this Agreement or the consummation by him of the transactions contemplated
hereby.
-3-
<PAGE> 4
(b) The Shares. Such Stockholder has, and the sale by such
Stockholder of the Shares hereunder will pass to the Purchaser, upon acceptance
for payment and payment therefore, good title to the Shares, free and clear of
any claims, liens, encumbrances and security interests whatsoever. Such
Stockholder does not own any share of Common Stock other than the Shares.
5. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Stockholders as follows:
(a) Authority. The Purchaser has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Purchaser
and the consummation by the Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and constitutes a valid and binding obligation of Purchaser enforceable in
accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) Securities Act. Any Shares purchased by the Purchaser pursuant
to this Agreement will be acquired for investment only and not with a view to
any public distribution thereof and the Purchaser will not offer to sell or
otherwise
-4-
<PAGE> 5
dispose of any Shares so acquired by it in violation of any of the registration
requirements of the Securities Act of 1933, as amended.
6. Covenants of the Stockholders. (a) Each Stockholder agrees in his
capacity as a Stockholder, until the termination of this Agreement, not to
(i) sell, transfer, pledge, assign or otherwise dispose of, or
tender or agree to tender into any tender offer with
respect to, or enter into any contract, option or other
arrangement with respect to the sale, transfer, pledge,
assignment or other disposition of such Stockholder's
Shares to any person other than the Purchaser or the
Purchaser's designee;
(ii) acquire any additional shares of Common Stock without the
prior consent of the Purchaser;
(iii) deposit any Shares into a voting trust or grant a proxy or
enter into a voting agreement with respect to any Shares;
(iv) hold discussions with any person other than the Purchaser
and it's affiliates with respect to any offer or potential
offer for the Shares other than the Offer; or
(v) solicit, encourage or take any other action to facilitate
(including by way of furnishing information) any inquires
or proposals for
-5-
<PAGE> 6
any merger or consolidation involving the Company, the
acquisition of any shares of Common Stock or the
acquisition of all or substantially all the assets of the
Company by any person other than the Purchaser or its sole
stockholder.
(b) Each Stockholder agrees to notify the Purchaser promptly
and to provide all details requested by the Purchaser if such Stockholder shall
be approached or solicited, directly or indirectly, by any person with respect
to any matter described in Section 6(a)(iv) or 6(a)(v).
(c) Each Stockholder agrees that, unless this Agreement has
been terminated or the Purchaser has purchased all the Shares, at any annual or
special meeting of the shareholders of the Company and in any action by written
consent of the shareholders of the Company, such Stockholder will vote such
Stockholder's Shares against any action or agreement which would result in a
breach of any representation, warranty or covenant of the Company in the Tender
Offer Agreement or which would otherwise, in the sole judgment of the Purchaser,
impede, interfere with or attempt to discourage the Offer.
7. No Brokers. Except for such fees as may be payable as set forth
in the Tender Offer Agreement, each of the Stockholders, and the Purchaser
represents, as to himself, herself or itself and his, her or its affiliates,
that no agent, broker, investment banker or other firm or person is or will be
entitled to any broker's or finder's fees or any other commission
-6-
<PAGE> 7
or similar fee in connection with any of the transactions contemplated by this
Agreement and respectively agrees to indemnify and hold the others harmless from
and against any and all claims, liabilities or obligations with respect to any
such fees, commissions or expenses asserted by any person on the basis of any
act or statement alleged to have occurred or been made by such party or its
affiliates.
8. Survival of Representations. All representations, warranties and
agreements made by the parties to this Agreement shall survive the closings
hereunder notwithstanding any investigation at any time made by or on behalf of
any party hereto.
9. Legend. Promptly after the request of Purchaser each Stockholder
shall cause all certificates representing Shares to bear in a conspicuous place
the following legend:
"The shares represented by this certificate may not be sold, exchanged
or otherwise transferred or disposed of except, in compliance with the
terms and conditions of the Stockholders' Purchase Agreement, dated as
of June 1, 1996, among Clear Channel Radio, Inc, and, inter alia, the
registered holder of this certificate.
10. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that the
Purchaser may assign in its sole discretion, any or all of its rights, interests
and obligations hereunder to it's sole stockholder or to any direct or indirect
wholly-owned subsidiary of such stockholder. Subject to the preceding sentence,
this Agreement will be binding upon, inure to
-7-
<PAGE> 8
the benefit of and be enforceable by the parties and their respective successors
and assigns.
11. Conditions to Obligations of Certain Stockholders. The
obligations of Cecil Heftel ("Heftel") and Carl Parmer ("Parmer") to consummate
the transactions contemplated hereby shall be subject to the fulfillment on or
prior to the Closing Date of each of the following conditions:
(a) the amounts set forth in Paragraph 1 of each of the
Agreements Not to Compete entered into between the Company and Heftel and Parmer
of even date herewith shall have been paid.
(b) the amounts set forth in Paragraph 1 of each of the
Settlement Agreements between the Company and Heftel and Parmer of even date
herewith shall have been paid.
12. Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated hereby shall be subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions:
(a) The applicable waiting period under the HSR Act shall have
expired or terminated.
(b) The FCC Consent shall have become a Final Order; provided,
however, if the primary lenders for Purchaser do not require that the FCC
Consent becomes a Final Order in order to consummate the Closing, then
Purchaser's condition shall be that the FCC shall have granted the FCC Consent
and shall have given public notice of the grant of the FCC Consent.
Notwithstanding the foregoing, in the event at the Closing the application for
renewal of the license for WAMR-FM, Miami,
-8-
<PAGE> 9
Florida remains pending or has not become a Final Order, the parties agree the
Closing shall occur.
(c) No temporary restraining order, preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a government, regulatory or administrative agency or
commission shall be in effect which restrains or prohibits the transactions
contemplated hereby.
(d) All representations and warranties of the Stockholders
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date, except those representations and warranties which
address matters only as of a particular date shall remain true and correct in
all material respects as of such date. The Stockholders shall have performed in
all material respects ass agreements and covenants required by this Agreement to
be performed by them prior to or at the Closing Date.
13. Termination. This agreement may be terminated, by written notice
promptly given to the other parties hereto, at any time prior to the Closing
Date:
(a) by mutual written consent of all of the parties hereto;
(b) by any Stockholder as to his individual obligations if the
Company is able to terminate the Tender Offer Agreement pursuant to any of
subparagraphs 8.1(b), (c), (d), (f), or (g) of the Tender Offer Agreement; and
-9-
<PAGE> 10
(c) by the Purchaser if the Purchaser has terminated the Tender
Offer Agreement pursuant to any of subparagraphs 8.1(b), (c), (d), (e), or (g)
of the Tender Offer Agreement.
14. Indemnification. Purchaser shall indemnify, defend and hold
harmless each Stockholder (the "Indemnified Parties") against all losses,
claims, damages, costs, expenses, liabilities or judgments, or amounts that are
paid in settlement with the approval of Purchaser (which approval shall not be
unreasonably withheld), arising out of or related to any claim, action, suit,
proceeding or investigation based in whole or in part on or arising in whole or
in part out of this Agreement or the Tender Offer Agreement or the transactions
contemplated hereby or thereby. Notwithstanding the foregoing, no indemnity
shall be available to the extent a court of competent jurisdiction finally
determines that the claim for indemnity is caused by the Indemnified Party
knowingly and intentionally misrepresenting that it may enter into this
Agreement. Without limiting the foregoing, in the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Party, (i)
any counsel retained by the Indemnified Parties shall be reasonably satisfactory
to Purchaser; (ii) Purchaser shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; and (iii) Purchaser will use all reasonable efforts to assist in the
vigorous defense of any such matter, provided that Purchaser shall not be liable
for any
-10-
<PAGE> 11
settlement of any claim effected without its written consent, which consent
shall not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify Purchaser (but the failure to so
notify Purchaser shall not relieve it from any liability which it may have under
this Section except to the extent such failure materially prejudices Purchaser).
The Indemnified Parties as a group may retain only one law firm to represent
them with respect to each such matter unless there is, under applicable
standards of professional conduct, a conflict on any issue between the positions
of any two or more Indemnified Parties.
15. General Provisions.
(a) Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for any breach of the provisions of this
Agreement and agree that the obligations of the parties hereunder shall be
specifically enforceable.
(b) Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense.
(c) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(d) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed
-11-
<PAGE> 12
given if delivered personally or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to the Purchaser, to
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Randal Mays
(ii) if to a Stockholder, to the address set forth
below such Stockholder's name on Exhibit A.
(e) Interpretation. When a reference is made in this Agreement
to Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
(f) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more the counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
(g) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes
-12-
<PAGE> 13
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(i) Partial Invalidity. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. In
any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
-13-
<PAGE> 14
IN WITNESS WHEREOF, the Purchaser and the Stockholders have executed
this Agreement as of the date first written above.
Clear Channel Radio, Inc.
By: /s/ MARK P. MAYS
----------------------------
Name: Mark P. Mays
------------------------
Title: Senior Vice President
-----------------------
/s/ CATHERINE ROLPH
- --------------------------------
Catharine Rolph
/s/ MARGARET A.H. WILSON
- --------------------------------
Margaret A.H. Wilson, individually
and as custodian for each of Nalani
Wilson, Ryan Wilson and Deven
Wilson, under the Hawaii Uniform
Transfers to Minors Act
/s/ SUSAN HEFTEL-LIQUIDO
- --------------------------------
Susan Heftel-Liquido, as trustee
of the Susan Heftel-Liquido Trust
u/t/d 2/1/93 and as custodian for each of
Francisco Liquido, Tiara Liquido, Carlo Liquido and Fernando
Liquido under Hawaii Uniform Transfers to Minors Act
/s/ CHRISTOPHER LEE HEFTEL
- --------------------------------
Christopher Lee Heftel, individually
and as custodian for each of Logan Heftel,
Brannon Heftel and Hayden Heftel under the Tennessee
Uniform Transfers to Minors Act
/s/ TERRY HEFTEL
- --------------------------------
Terry Heftel, individually and
as custodian for each of Jonathan Heftel,
Jeffrey Welch and Jeremy Heftel under the Utah
Uniform Transfers to Minors Act
-14-
<PAGE> 15
/s/ RICHARD HEFTEL
- -----------------------------------
Richard Heftel, as trustee of the Richard Heftel
Living Trust dated January 9, 1996,
and as custodian for each of Kawika Heftel, Christian Heftel
and Brittany Heftel, under the California Uniform Transfers to
Minors Act
/S/ CECIL HEFTEL
- ---------------------------
Cecil Heftel
/s/ MICHELLE LOPEZ HENDRICK
- ---------------------------
Michelle Lopez Hendrick
/s/ MICHAEL DONOHOE
- ---------------------------
Michael Donohoe
/s/ JAMES DONOHOE
- ---------------------------
James Donohoe
/s/ LANI DONOHOE
- -----------------------------------
Lani Donohoe, as custodian for Josh
Donohoe, under the California Uniform
Transfers to Minors Act
/s/ CARL PARMER
- -----------------------------------
Carl Parmer
-15-
<PAGE> 16
EXHIBIT "A"
<TABLE>
<CAPTION>
Name Number of Shares of Class B
- ---- ---------------------------
<S> <C>
Catharine Rolph 232,146
Margaret A.H. Wilson 445,649
Susan Heftel-Liquido, as trustee
of the Susan Heftel-Liquido Trust
u/t/d 2/1/93 503,727
Christopher Lee Heftel 321,872
Terry Heftel 96,810
Richard Heftel, as trustee
of the Richard Heftel Living Trust
dated January 9, 1996 559,118
Cecil Heftel 696,181
Michele Lopez 4,400
Michael Donohoe 4,400
James Donohoe 4,400
Lani Donohoe, as custodian for Josh
Donohoe, under the California Uniform
Transfers to Minors Act 4,400
Margaret Wilson, as custodian for Nalani
Wilson, under the Hawaii Uniform
Transfers to Minors Act 4,400
Margaret Wilson, as custodian for Ryan
Wilson, under the Hawaii Uniform
Transfers to Minors Act 4,400
Margaret Wilson, as custodian for Deven
Wilson, under the Hawaii Uniform
Transfers to Minors Act 4,400
Susan Heftel-Liquido, as custodian for
Francisco Liquido, under Hawaii Uniform
Transfers to Minors Act 4,400
Susan Heftel-Liquido, as custodian for
Tiara Liquido, under the Hawaii Uniform
Transfers to Minors Act 4,400
</TABLE>
-16-
<PAGE> 17
<TABLE>
<CAPTION>
Name Number of Shares of Class B
- ---- ---------------------------
<S> <C>
Susan Heftel-Liquido, as custodian for
Carlo Liquido, under the Hawaii
Uniform Transfers to Minors Act 4,400
Susan Heftel-Liquido, as custodian for
Fernando Liquido, under the Hawaii
Uniform Transfers to Minors Act 4,400
Christopher Lee Heftel, as custodian for
Logan Heftel, under the Tennessee
Uniform Transfers to Minors Act 4,400
Christopher Lee Heftel, as custodian for
Brannon Heftel, under the Tennessee
Uniform Transfers to Minors Act 4,400
Christopher Lee Heftel, as custodian for
Hayden Heftel, under the Tennessee
Uniform Transfers to Minors Act 4,400
Terry Heftel, as custodian for
Jonathan Heftel, under the Utah
Uniform Transfers to Minors Act 4,400
Terry Heftel, as custodian for
Jeffrey Welch, under the Utah
Uniform Transfers to Minors Act 4,400
Terry Heftel, as custodian for
Jeremy Heftel, under the Utah
Uniform Transfers to Minors Act 4,400
Richard Heftel, as custodian for
Kawika Heftel, under the California
Uniform Transfers to Minors Act 4,400
Richard Heftel, as custodian for
Christian Heftel, under the California
Uniform Transfers to Minors Act 4,400
Richard Heftel, as custodian for
Brittany Heftel, under the California
Uniform Transfers to Minors Act 4,400
</TABLE>
Carl Parmer owns 413,026 shares of Class B Common Stock and 160,000 shares of
Class A Common Stock.
Catharine Rolph owns 335,635 shares of Series A Preferred Stock.
-17-
<PAGE> 1
EXHIBIT 99(c)(3)
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE (the "Agreement") is made and entered on
June 1, 1996, by and between CECIL HEFTEL ("Covenantor") and HEFTEL BROADCASTING
CORPORATION, a Delaware corporation (the "Company"), with reference to the
following facts:
The parties hereto hereby agree as follows:
1. Covenant Not to Compete. For a period of five years commencing on
the Closing Date (as defined in the Stockholder Purchase Agreement of even date
herewith among Covenantor, the Company and other parties), Covenantor, without
the prior written consent of the Company, will not, directly or indirectly, own
(except that Covenantor may own securities which constitute not more than five
percent (5%) of a publicly traded company's issued and outstanding capital
stock), work for, act as consultant or advisor to, manage, operate, or control
or participate in the ownership, management, operation or control of, any radio
station in the markets set forth in Exhibit A attached hereto which broadcasts
predominantly in Spanish. In consideration of the covenant set forth in the
first sentence of this Section, on the Closing Date, the Company shall pay $2.5
million to Covenantor by wire-transfer of immediately available funds to an
account designated by Covenantor.
2. Interpretation of Scope of Covenant. The parties hereto agree
that the duration and area for which the covenant not to compete set forth
herein is to be effective are reasonable. The parties intend for the provisions
of this Agreement to be construed, interpreted and enforced to the maximum
extent permitted by law. In the event that any provision of this Agreement shall
be determined by any court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect for any reason, or that the time period or the
area, or both of them, are unreasonable and that this Agreement is to that
extent unenforceable, the parties hereto agree that this Agreement shall remain
in full force and effect for the greatest time period and the greatest area that
would not render it unenforceable.
3. Remedies for Breach. Covenantor acknowledges and agrees that the
Company shall be entitled, in addition to any other remedies it may have at law,
to the remedies of injunction, specific performance and other equitable relief
for a breach of this Agreement by Covenantor. This provision shall not, however,
be construed as a waiver of any of the rights which the Company may have for
damages or otherwise.
4. Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
-1-
<PAGE> 2
5. Governing Law. This Agreement and the rights of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Delaware without giving effect to the choice of law principles
thereof.
6. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
7. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
8. Multiple 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 one and the same instrument.
9. Waivers. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
No waiver shall be binding unless executed in writing by the party making the
waiver.
10. Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto relating to the matters provided for
herein and supersedes any and all prior agreements, arrangements, negotiations,
discussions and understandings relating to the matters provided for herein.
11. Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective successors,
heirs, assigns and representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HEFTEL BROADCASTING CORPORATION
By /s/ CARL PARMER
-----------------------------
Name: Carl Parmer
-----------------------
Title: President & Co-CEO
-----------------------
/s/ Cecil Heftel
-------------------------------
CECIL HEFTEL
-2-
<PAGE> 3
The undersigned hereby guarantees the obligations of Heftel
Broadcasting Corporation under the attached Agreement Not To Compete.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------
Name: Mark P. Mays
----------------------
Title: Senior Vice President
----------------------
-3-
<PAGE> 4
EXHIBIT A
Markets
Dallas/Ft. Worth
Miami
Los Angeles
Chicago
New York
Las Vegas
-4-
<PAGE> 1
EXHIBIT 99(c)(4)
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE (the "Agreement") is made and entered on
June 1, 1996, by and between CARL PARMER ("Covenantor") and HEFTEL BROADCASTING
CORPORATION, a Delaware corporation (the "Company"), with reference to the
following facts:
The parties hereto hereby agree as follows:
1. Covenant Not to Compete. For a period of five years commencing on
the Closing Date (as defined in the Stockholder Purchase Agreement of even date
herewith among Covenantor, the Company and other parties), Covenantor, without
the prior written consent of the Company, will not, directly or indirectly, own
(except that Covenantor may own securities which constitute not more than five
percent (5%) of a publicly traded company's issued and outstanding capital
stock), work for, act as consultant or advisor to, manage, operate, or control
or participate in the ownership, management, operation or control of, any radio
station in the markets set forth in Exhibit A attached hereto which broadcasts
predominantly in Spanish. In consideration of the covenant set forth in the
first sentence of this Section, on the Closing Date, the Company shall pay $4.5
million to Covenantor by wire-transfer of immediately available funds to an
account designated by Covenantor.
2. Interpretation of Scope of Covenant. The parties hereto agree
that the duration and area for which the covenant not to compete set forth
herein is to be effective are reasonable. The parties intend for the provisions
of this Agreement to be construed, interpreted and enforced to the maximum
extent permitted by law. In the event that any provision of this Agreement shall
be determined by any court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect for any reason, or that the time period or the
area, or both of them, are unreasonable and that this Agreement is to that
extent unenforceable, the parties hereto agree that this Agreement shall remain
in full force and effect for the greatest time period and the greatest area that
would not render it unenforceable.
3. Remedies for Breach. Covenantor acknowledges and agrees that the
Company shall be entitled, in addition to any other remedies it may have at law,
to the remedies of injunction, specific performance and other equitable relief
for a breach of this Agreement by Covenantor. This provision shall not, however,
be construed as a waiver of any of the rights which the Company may have for
damages or otherwise.
4. Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
-1-
<PAGE> 2
5. Governing Law. This Agreement and the rights of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Delaware without giving effect to the choice of law principles
thereof.
6. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
7. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
8. Multiple 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 one and the same instrument.
9. Waivers. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
No waiver shall be binding unless executed in writing by the party making the
waiver.
10. Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto relating to the matters provided for
herein and supersedes any and all prior agreements, arrangements, negotiations,
discussions and understandings relating to the matters provided for herein.
11. Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective successors,
heirs, assigns and representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HEFTEL BROADCASTING CORPORATION
By /s/ CECIL HEFTEL
-----------------------------
Name: Cecil Heftel
------------------------
Title: Chairman & Co-CEO
-----------------------
/s/ CARL PARMER
-------------------------------
CARL PARMER
-2-
<PAGE> 3
The undersigned hereby guarantees the obligations of Heftel
Broadcasting Corporation under the attached Agreement Not To Compete.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------
Name: Mark P. Mays
-----------------------
Title: Senior Vice President
----------------------
-3-
<PAGE> 4
EXHIBIT A
Markets
Dallas/Ft. Worth
Miami
Los Angeles
Chicago
New York
Las Vegas
-4-
<PAGE> 1
EXHIBIT 99(c)(5)
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (this "Agreement") is made and entered into
on June 1, 1996, by and between HEFTEL BROADCASTING CORPORATION, a Delaware
corporation (the "Company"), and CECIL HEFTEL ("Executive"), with reference to
the following facts.
Recitals
A. Executive is employed the Company under an Employment Agreement
dated as of December 1, 1993, between Executive and the Company (the "Employment
Agreement").
B. Executive and Clear Channel Radio, Inc. ("Parent") have entered
into a Stockholder Purchase Agreement of even date herewith (the "Stockholder
Purchase Agreement") contemplating a sale of the stock of the Company owned by
Executive and other parties to Parent (the "Stock Sale").
C. Executive has offered to continue service and to complete his
obligations under the Employment Agreement following consummation of the Stock
Sale. Parent has rejected that offer and informed Executive that it will cause
the Company to terminate his employment with the Company and the Employment
Agreement immediately following consummation of the Stock Sale, without cause.
D. The parties acknowledge and agree that Executive will suffer
substantial damages as a result of such termination in addition to damages which
Executive may be able to mitigate by obtaining alternative employment.
E. Pursuant to this Agreement, the parties agree to compromise and
settle Executive's claim for damages resulting from the Company's repudiation
and intended termination of the Employment Agreement and Executive's employment
thereunder as provided herein.
Agreements
The parties agree as follows:
1. In consideration of the release given by Executive in Paragraph 2
below, concurrently with the Closing (as defined in the Stockholder Purchase
Agreement), the Company will pay to Executive the sum of $11,861,069 (the "Fixed
Amount") plus all amounts payable under the Employment Agreement for services
rendered up to the Closing Date, minus all amounts owed to the Company by
Executive on the Closing Date by wire transfer of immediately available funds to
an account designated by Executive. The parties acknowledge and agree that the
Fixed Amount is less than the amount by which the present value as of
<PAGE> 2
the Closing Date (as defined in the Stockholder Purchase Agreement) of the total
compensation which Executive would earn if he were allowed to continue service
and complete performance of his duties under the Employment Agreement following
the Stock Sale exceeds the present value of the maximum compensation Executive
may be able to earn by obtaining alternative employment throughout the unexpired
term of the Employment Agreement after the Closing Date (as defined in the
Stockholder Purchase Agreement).
2. In consideration of and subject to receipt of the payment
specified in Paragraph 1 above at the Closing, Executive hereby releases the
Company from all damages, liabilities, and claims resulting from termination of
Executive's employment with the Company and the Employment Agreement following
consummation of the Stock Sale.
3. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, without regard to conflicts of law
principles.
4. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
5. In the event that any one or more of the provisions contained in
this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, then to
the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any
other such instrument.
6. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
7. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
8. This Agreement constitutes the entire agreement and understanding
of the parties hereto relating to the matters provided for herein and supersedes
any and all prior agreements, arrangements, negotiations, discussions and
understandings relating to the matters provided for herein.
9. This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors, heirs, assigns and
representatives.
-2-
<PAGE> 3
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
HEFTEL BROADCASTING CORPORATION
By: /s/ CARL PARMER
----------------------------
Name: Carl Parmer
--------------------------
Title: President & Co-CEO
-------------------------
/s/ CECIL HEFTEL
-------------------------------
CECIL HEFTEL
-3-
<PAGE> 4
The undersigned hereby guarantees the obligations of Heftel
Broadcasting Corporation under the attached Settlement Agreement.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------
Name: Mark P. Mays
-----------------------
Title: Senior Vice President
----------------------
-4-
<PAGE> 1
EXHIBIT 99(c)(6)
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (this "Agreement") is made and entered into
on June 1, 1996, by and between HEFTEL BROADCASTING CORPORATION, a Delaware
corporation (the "Company"), and CARL PARMER ("Executive"), with reference to
the following facts.
Recitals
A. Executive is employed the Company under an Employment Agreement
dated as of December 1, 1993, between Executive and the Company (the "Employment
Agreement").
B. Executive and Clear Channel Radio, Inc. ("Parent") have entered
into a Stockholder Purchase Agreement of even date herewith (the "Stockholder
Purchase Agreement") contemplating a sale of the stock of the Company owned by
Executive and other parties to Parent (the "Stock Sale").
C. Executive has offered to continue service and to complete his
obligations under the Employment Agreement following consummation of the Stock
Sale. Parent has rejected that offer and informed Executive that it will cause
the Company to terminate his employment with the Company and the Employment
Agreement immediately following consummation of the Stock Sale, without cause.
D. The parties acknowledge and agree that Executive will suffer
substantial damages as a result of such termination in addition to damages which
Executive may be able to mitigate by obtaining alternative employment.
E. Pursuant to this Agreement, the parties agree to compromise and
settle Executive's claim for damages resulting from the Company's repudiation
and intended termination of the Employment Agreement and Executive's employment
thereunder as provided herein.
Agreements
The parties agree as follows:
1. In consideration of the release given by Executive in Paragraph 2
below, concurrently with the Closing (as defined in the Stockholder Purchase
Agreement), the Company will pay to Executive the sum of $6,941,960 (the "Fixed
Amount") plus all amounts payable under the Employment Agreement for services
rendered up to the Closing Date, minus all amounts owed to the Company by
Executive on the Closing Date by wire transfer of immediately available funds to
an account designated by Executive. The parties acknowledge and agree that the
Fixed Amount is less than the amount by which the present value as of
<PAGE> 2
the Closing Date (as defined in the Stockholder Purchase Agreement) of the total
compensation which Executive would earn if he were allowed to continue service
and complete performance of his duties under the Employment Agreement following
the Stock Sale exceeds the present value of the maximum compensation Executive
may be able to earn by obtaining alternative employment throughout the unexpired
term of the Employment Agreement after the Closing Date (as defined in the
Stockholder Purchase Agreement).
2. In consideration of and subject to receipt of the payment
specified in Paragraph 1 above at the Closing, Executive hereby releases the
Company from all damages, liabilities, and claims resulting from termination of
Executive's employment with the Company and the Employment Agreement following
consummation of the Stock Sale.
3. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, without regard to conflicts of law
principles.
4. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
5. In the event that any one or more of the provisions contained in
this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, then to
the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any
other such instrument.
6. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
7. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
8. This Agreement constitutes the entire agreement and understanding
of the parties hereto relating to the matters provided for herein and supersedes
any and all prior agreements, arrangements, negotiations, discussions and
understandings relating to the matters provided for herein.
9. This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors, heirs, assigns and
representatives.
-2-
<PAGE> 3
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
HEFTEL BROADCASTING CORPORATION
By: /s/ CECIL HEFTEL
-------------------------------
Name: Cecil Heftel
--------------------------
Title: Chairman & Co-CEO
-------------------------
/s/ CARL PARMER
-------------------------------
CARL PARMER
-3-
<PAGE> 4
The undersigned hereby guarantees the obligations of Heftel
Broadcasting Corporation under the attached Settlement Agreement.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------
Name: Mark P. Mays
-----------------------
Title: Senior Vice President
----------------------
-4-
<PAGE> 1
EXHIBIT 99(c)(7)
HEFTEL BROADCASTING CORPORATION
6767 West Tropicana Avenue
Las Vega, Nevada 89103
(702) 367-3322
May 23, 1995
L. Lowry Mays
President and Chief Executive Officer
Clear Channel Communications, Inc.
200 Concord Plaza
Suite 600
San Antonio, Texas 75216
Dear Lowry:
We understand from you that Clear Channel Communications, Inc., a
Texas corporation ("Clear Channel") has entered into a letter agreement dated
May 16, 1995 (the "GRC-Clear Channel Agreement") with Grupo Radio Centro, A
Mexican corporation ("GRC"), to acquire GRC's holdings of Class A shares (such
shares are referred to as the "GRC Stockholdings") of Heftel Broadcasting
Corporation, a Delaware corporation ("HBC").
The GRC-Clear Channel Agreement provides a number of contingencies to
the purchase of the GRC Stockholdings, including without limitation, an
agreement between HBC and Clear Channel regarding voting rights and
registration rights.
This letter is intended to evidence those agreements between HBC and
Clear Channel, as follows:
1. Effective Date of Agreement. This Agreement between HBC and
Clear Channel shall be effective, if at all, upon the consummation of the
transactions contemplated by the GRC-Clear Channel Agreement; provided,
however, that this Agreement shall automatically expire on June 15, 1995 if
the GRC-Clear Channel Agreement has not then closed in accordance with its
terms.
In addition, this Agreement shall not be effective unless and until
HBC and GRC shall have reached a settlement of certain current disputes between
the companies on a basis that provides for release of HBC from any liability to
GRC and payment by GRC to HBC at the closing of the GRC-Clear Channel Agreement
of two separate amounts totaling at least $1.5 million and $902,397
respectively.
HBC agrees to promptly notify Clear Channel when a legally binding
agreement evidencing such settlement has been executed by HBC and GRC.
1
<PAGE> 2
2. Voting Rights.
2.1 Voting Rights from Cecil Heftel. Cecil Heftel is the
chairman of HBC and possesses approximately 70.27 per cent of the voting power
in HBC. He is concurrently herewith executing a voting rights agreement in the
form attached as Exhibit A in order to evidence his personal agreement that
provides to Clear Channel the right to vote shares of HBC as set forth in
Exhibit A.
2.2 Recapitalization of HBC.
2.2.1 In the event that
-- HBC amends its certificate of incorporation so as to provide for a
single class of voting stock, or engages in any other transaction or series of
transactions or in any other conduct that
-- shall or shall reasonably be anticipated to have the affect of
causing the GRC Stockholdings to exceed five percent or more of the voting
power in HBC (which the parties believe is the existing attribution standard
provided under the rules of the Federal Communications Commission), then
-- HBC agrees to create a separate class of nonvoting stock (the
"Nonvoting Stock") into which Clear Channel may exchange the GRC Stockholdings
so as to avoid such attribution standard.
2.2.2 The rights of such Nonvoting Stock
shall be, as practicable as possible, identical to the existing rights of the
GBC Stockholdings except that the holding of such Nonvoting Stock shall not
cause its holder to exceed said Federal Communications Commission attribution
standard. Such Nonvoting Stock shall be created at the same time as the single
class of voting stock or other transaction or conduct. HBC further agrees to
meet and confer with Clear Channel at least five business days prior to calling
for a stockholder vote on any such amendment of its certificate of
incorporation or other transaction or conduct. Such Nonvoting Stock shall be
immediately convertible at no cost to Clear Channel into voting stock identical
to the other voting stock of HBC or such other security into which the voting
stock of HBC shall have been converted.
3. Registration Rights and Related Matters. Until January 1,
1996, Clear Channel shall not sell or otherwise dispose of all or any portion
of the GRC Stockholdings. From and after January 1, 1996, Clear Channel shall
have the following rights related to the GRC Stockholdings:
3.1 Demand Registration. Upon written demand, HBC shall,
as soon as reasonably practicable but in any event within 60 days following the
receipt of such demand, cause the registration of the GRC Stockholdings under
such applicable rules of the Securities and Exchange Commission (and related
Blue Sky authorities, if any) as shall be reasonably required to permit Clear
Channel to sell its shares to the public in open market transactions free of
transfer restrictions and shall bear all costs of such registration; provided,
however, that HBC
2
<PAGE> 3
shall not be liable to pay (A) any underwriting discounts or commissions
attributable to the sale of the GRC Stockholdings, (B) any fees and expenses of
counsel of Clear Channel if such counsel is different than counsel for HBC, (C)
any direct out-of-pocket expenses of Clear Channel, or (D) other amounts in
excess of $50,000 per year (including increased accounting and legal forms)
related to such registration. The parties presently contemplate a "shelf"
registration under Form S-3.
From and after such date as Clear Channel has disposed of
three-quarters or more of the GRC Stockholdings, HBC shall no longer have the
obligation to maintain the effectiveness of such registration statement for the
benefit of Clear Channel for a period of excess of 60 days after such date.
3.2 Piggyback Rights. In addition to the demand
registration provided in Section 2.1 above, Clear Channel shall have
"piggyback" registration rights in the event that HBC proposes to file a
registration statement with the Securities and Exchange Commission covering the
sale or other transfer of any securities and HBC shall bear all costs of such
registration other than the costs referred to in 3.1 (A) through (C) above.
In the event that the managing underwriter for a registered
underwritten offering by HBC makes a reasonable and customary determination in
writing delivered to HBC and Clear Channel that the inclusion of some or all of
the GRC Stockholdings would have an adverse distribution effect on the proposed
distribution, then HBC may elect to include in such registration statement such
lesser number of the GRC Stockholdings as the managing underwriter shall
reasonably determine.
3.3 Limitations. In connection with such demand or
piggyback registration, Clear Channel agrees that its rights hereunder shall be
subordinated to
(a) currently preexisting registration and other written rights of
HBC stockholders,
(b) reasonable written determination by HBC's investment bankers
regarding the adverse distribution affect on underwritten offerings by HBC (as
described above), and
(c) other restrictions imposed as a matter of law (for example,
distributions at a time material information is not publicly available).
Subordination pursuant to (b) or (c) above shall have the effect only
of permitting HBC to postpone for a reasonable period of time, not to exceed 60
days, its obligation to cause the registration of the GRC Stockholdings under
Section 3.1 and Section 3.2 above.
3.4 Further Assurances. HBC hereby agrees to take such
actions and execute such documents as shall be reasonably necessary to
effectuate the foregoing demand and piggyback registration rights, including
without limitation, preparation and filing of amendments and post-effective
amendments, supplements to the prospectus or registration statement, qualifying
securities with Blue Sky authorities as required (except HBC shall not be
required to qualify generally to do business in any jurisdiction, subject
itself to general taxation in any jurisdiction, or consent to general service
of process in any jurisdiction), entering into customary
3
<PAGE> 4
indemnity agreements with underwriters, (subject to appropriate confidentiality
agreements) providing financial and other information to Clear Channel and its
advisors reasonably deemed sufficient by Clear Channel's counsel to allow Clear
Channel to meet its obligations under federal and state securities law,
obtaining "cold comfort" letters and consents from its accountants, furnishing
legal and other opinions as necessary, and causing the securities to be listed
on HBC's regular securities exchange.
3.5 Standstill. Until the date which is two years
following the closing of the GRC-Clear Channel Agreement, neither Clear Channel
nor any of its affiliates (as such term is defined by the Securities and
Exchange Commission) shall acquire additional shares of common stock of HBC
which combined with their other holdings shall exceed 35 percent of the
economic interest in HBC nor an interest in debt issued by HBC without the
written consent of HBC, which consent may be withheld in the sole discretion of
HBC.
3.6 Disclosure. Clear Channel understands and agrees
that
-- HBC is not the seller of the GRC Stockholdings and
accordingly is not responsible to Clear Channel in connection with any dispute
Clear Channel may have with GRC,
-- Clear Channel is relying on its own investigation and
due diligence in connection with its investment in HBC and not on any
representation and warranty being made by HBC except those contained in the
documents filed publicly by HBC with the Securities and Exchange Commission,
-- HBC is not making any representations or warranties
to Clear Channel in connection with the GRC transaction except as expressly
stated in this Agreement, and
-- HBC has disclosed to Clear Channel certain
negotiations and disputes with Mambisa Broadcasting Corporation and its
affiliates.
4. Miscellaneous.
4.1 Notices. Any notice or other communication
contemplated or required hereunder shall be in writing and shall be effective
upon receipt or five days after deposit in the United States mail, return
receipt requested, postage prepaid, addressed as follows:
If to HBC: H. Carl Parmer
President and Co-Chief Executive Officer
Heftel Broadcasting Corporation
6767 West Tropicana Avenue
Las Vegas, Nevada 89103
If to Clear Channel: L. Lowry Mays
President and Chief Executive Officer
Clear Channel Communications, Inc.
200 Concord Plaza
Suite 600
4
<PAGE> 5
San Antonio, Texas 78216
With a copy to: Kenneth E. Wyker, Esq.
Vice President Legal Affairs
Clear Channel Communications, Inc.
200 Concord Plaza
Suite 600
San Antonio, Texas 78216
With a copy to: William F. Cappa, Esq.
Jeffer, Mangels, Butler & Marmaro
2121 Avenue of the Stars
Los Angeles, California 90067
4.2 Governing Law; Dispute Resolution. This Agreement
shall be governed and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be wholly executed in such state.
Disputes arising under this Agreement shall be subject to binding arbitration
in San Antonio, Texas in accordance with the commercial rules of the American
Arbitration Association and judgment upon the arbitrator(s) award (which shall
include reasonable attorneys' fees and costs to the prevailing party but shall
not include exemplary, punitive or extra-contract damages) may be entered in
any court of competent jurisdiction.
4.3 Entire Agreement. This Agreement is the entire
agreement between the parties hereto relating to the subject hereof and may not
be amended, supplemented or varied except in a writing executed by the party to
be bound. Each person signing this document on behalf of another party
represents and warrants that he has the authority to do so and that his
signature legally binds such other party. This Agreement is not assignable or
transferable.
Please return a copy of this agreement executed where indicated below
in order to evidence your agreement to the foregoing.
Sincerely,
HEFTEL BROADCASTING CORPORATION
By: /s/ CARL PARMER
-----------------------------------
Name: Carl Parmer
Title: President
/s/ CECIL HEFTEL
---------------------------------------
Cecil Heftel, as to the proxy
provisions of Section 2.1 above
5
<PAGE> 6
The foregoing is accepted and agreed.
Date: May 24, 1995
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ L. LOWRY MAYS
--------------------------------------
Name: L. Lowry Mays
Title: President, Chief Executive Officer
6
<PAGE> 1
EXHIBIT 99(c)8
VOTING RIGHTS AGREEMENT
This voting rights agreement is executed in accordance with that
certain letter agreement dated May 23, 1995 by and between Clear Channel
Communications, Inc., a Texas corporation ("Clear Channel"), and Heftel
Broadcasting Corporation, a Delaware corporation ("HBC").
The undersigned hereby agrees to vote shares of HBC stock covering 16
per cent of the present voting power in HBC on a fully diluted basis in
accordance with the written instructions of Clear Channel Communications, Inc.,
a Texas corporation ("Clear Channel"). "Fully diluted basis" shall mean
calculating outstanding shares as if all warrants and options to acquire shares
have been exercised (whether or not such warrants and options are then
exercisable). Except as described below, this agreement may be effective for a
period greater than three years and shall be deemed coupled with an interest
and, accordingly, irrevocable.
The parties agree that, in the event HBC shall issue voting shares not
included in the foregoing calculation, the undersigned shall increase the
number of shares covered by this agreement to such number as shall maintain
Clear Channel's 20 percent voting power in HBC; provided, however, that the
undersigned shall not have such obligations if HBC shall have offered to sell
to Clear Channel a portion of such voting shares that would maintain its voting
power at 20 percent and Clear Channel shall have failed and refused to purchase
such shares on the same terms and conditions as other offerees of such voting
shares.
From and after such time as Clear Channel has less than 20 percent of
the economic interest in HBC, however acquired, undersigned shall no longer
have the obligation to provide such right to Clear Channel.
Such voting rights shall be exercised by a written notice sent to the
undersigned at the principal offices of HBC no later than five business days
prior to the date Clear Channel intends to exercise the right. This agreement
shall bind the heirs and successors of the undersigned. This agreement is not
assignable or transferrable.
IN WITNESS WHEREOF, the undersigned has executed this voting rights
agreement as of this 23rd day of May, 1995.
/s/ CECIL HEFTEL
---------------------------------
Cecil Heftel
(attach notarial acknowledgment)
[Notarial Acknowledgement]
<PAGE> 1
EXHIBIT 99(C)(9)
AMENDMENT NO. 1 TO TENDER OFFER AGREEMENT
The Tender Offer Agreement dated June 1, 1996 between Clear Channel Radio,
Inc., a Nevada corporation, and Heftel Broadcasting Corporation, a Delaware
corporation, is hereby amended as follows:
1. Section 1.5 is deleted in its entirety and replaced by the
following new Section 1.5:
"1.5 Stock Options and Warrants. The options to purchase Class A
Common Stock of the Company and warrants to purchase Class B Common
Stock of the Company listed on Schedule 1.5 attached hereto
(collectively, "Convertible Securities" and, individually, a
"Convertible Security"), if not exercised before the Closing Date, and
upon condition that Parent receives any consent of the security holder
necessary to accelerate the vesting and exercisability of his or her
Convertible Security and cause the exercise thereof (the "Holder
Consent"), will be deemed exercised on the Closing Date and the shares
underlying such Convertible Securities will be deemed to have been
tendered in the Offer and accepted by Parent. In settlement of the
tender of the shares subject to such Convertible Securities, on the
Closing Date Parent shall pay to the Company an amount equal to the
aggregate of the exercise prices of the Convertible Securities so
exercised and to each holder of any such Convertible Security an amount
equal to (x) the product of (i) the Offer Price minus the exercise price
per share of the Convertible Security and (ii) the total number of
shares of Company Common for which such Convertible Security has been
exercised and which have been purchased by Parent on the Closing Date
less (y) any federal, state, local or foreign taxes required to be
withheld from such payment. The Board of Directors of the Company (or,
if appropriate, any committee thereof) shall adopt such resolutions or
take such other actions as are necessary, subject to obtaining any
applicable security holder consent, to implement the terms and
conditions of the prior sentence, including, without limitation,
accelerating the vesting and exercisability of all Convertible
Securities to the Closing Date; provided, however, that the vesting and
exercisability of a Convertible Security shall not be accelerated if the
holder thereof does not deliver the Holder Consent at or before the
expiration of the Offer."
2. Section 5.2 is deleted in its entirety and replaced by the
following new Section 5.2:
"5.2 Fees and Expenses. All costs and expenses incurred in
connection with the Offer and this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees and
expenses; provided, however, that, if the Closing occurs, Parent hereby
guarantees that the Company shall have sufficient funds to pay all fees
and costs payable to the investment bankers set forth on Schedule 3.4
attached hereto. Without limiting the foregoing, Parent hereby agrees to
loan the Company funds to pay such fees and costs if the Company does
not have sufficient cash."
3. Section 4.1(b)(xv) is amended by deleting the reference to "Section
4.4(h)" and replacing it with "Section 4.1(h)".
4. Section 5.4 is amended by deleting the reference to "Article 8" and
replacing it with "Article 6".
5. Section 5.7 is deleted in its entirety and replaced by the
following new Section 5.7:
"5.7 Convertible Securities. The Company and the Company
Subsidiaries shall take such action as may be permitted under the
Company's Stock Option Plan and/or the terms of the Convertible
Securities to accelerate the vesting of the right to purchase all shares
of Class A Common Stock subject to options included in the Convertible
Securities on the Closing Date and shall comply with all requirements
regarding income tax withholding in connection therewith. In addition to
the foregoing, the Company will use its best efforts to obtain the
Holder Consents referred to in Section 1. 5 and to provide Parent with
such other evidence requested by Parent that no holder of any
Convertible Security will have any right to acquire any equity interest
in the Company, Parent or any of their respective subsidiaries as a
result of the exercise or conversion of any Convertible Security or
other rights after the Closing Date."
6. Clause (ii) of Section 8.2 is amended by deleting "(y)" immediately
after "or" and immediately before "Parent" and replacing it with "(2)".
7. Parent hereby waives the provision which requires the Company to
file a Schedule 14D-9 on the date of commencement of the Offer, and the
Company hereby waives the provision which requires Parent to include the
Schedule 14D-9 in its Offer Documents.
8. Except as amended hereby, the Tender Offer Agreement is not changed
and is in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be
executed as of the 6th day of June 1996 by its officer thereunto duly
authorized.
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
----------------------------------------
Name: Mark P. Mays
Title: Senior Vice President
HEFTEL BROADCASTING CORPORATION
By: /s/ JOHN KENDRICK
----------------------------------------
Name: John Kendrick
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT 99(c)(10)
I hereby consent to the treatment of the options to purchase Class A
Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant
to purchase Class B Common Stock of the Company set forth in the Tender Offer
Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc.
as amended by Amendment No. 1 dated June 6, 1996.
Dated: June 6, 1996 /s/ CECIL HEFTEL
-------------------------------
Cecil Heftel
I hereby consent to the treatment of the options to purchase Class A
Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant
to purchase Class B Common Stock of the Company set forth in the Tender Offer
Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc.
as amended by Amendment No. 1 dated June 6, 1996.
Dated: June 6, 1996 /s/ CARL PARMER
-------------------------------
Carl Parmer
I hereby consent to the treatment of the options to purchase Class A
Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant
to purchase Class B Common Stock of the Company set forth in the Tender Offer
Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc.
as amended by Amendment No. 1 dated June 6, 1996.
Dated: June 6, 1996 /s/ RICHARD HEFTEL
-------------------------------
Richard Heftel
<PAGE> 1
EXHIBIT 99(c)(11)
AGREEMENT TO FILE JOINT STATEMENT ON SCHEDULE 13D
The parties hereto agree as follows:
Pursuant to Rule 13d-1(f)(1) of Regulation 13D-G promulgated by the
Securities and Exchange Commission, Clear Channel Communications, Inc. ("Clear
Channel") and Clear Channel Radio, Inc. ("Radio" and together with Clear
Channel, the "Reporting Persons") hereby agree to file jointly with the
Securities and Exchange Commission, the Statement on Schedule 13D to which this
Agreement is attached as an exhibit. Each of the Reporting Persons further
agrees to file jointly with the other Reporting Person any and all amendments
to said Statement on Schedule 13D as they may deem necessary or appropriate,
unless and until such time as it shall notify the other Reporting Person in
writing of its desire to terminate this agreement.
DATE: June 6, 1996
SIGNED: CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/MARK P. MAYS
------------------------------------
Name: Mark P. Mays
----------------------------------
Title: Senior Vice President/Operations
----------------------------------
SIGNED: CLEAR CHANNEL RADIO, INC.
By: /s/MARK P. MAYS
------------------------------------
Name: Mark P. Mays
-----------------------------------
Title: Senior Vice President/Operations
<PAGE> 1
EXHIBIT 99(c)(12)
May 31, 1996
PERSONAL AND CONFIDENTIAL
Clear Channel Radio, Inc.
200 Concord Plaza
Suite 600
San Antonio, Texas 78216
Ladies and Gentlemen:
In connection with your consideration of a possible transaction with Heftel
Broadcasting Corporation, you have requested certain financial and other public
and non-public information concerning Heftel Broadcasting Corporation and/or its
subsidiaries (collectively, the "Company"). As a condition to your being
furnished such information, you agree to treat any information concerning the
Company (whether prepared by the Company, its advisors, or otherwise) that is
furnished to you by or on behalf of the Company (herein collectively referred to
as the "Evaluation Material") in accordance with the provisions of this
agreement and to take or abstain from taking certain other actions herein set
forth. The term "Evaluation Material" does not include information that (i) is
already in your possession, provided that you do not have reason to know that
such information is subject to another confidentiality agreement with or other
obligation of secrecy to the Company or another party, or (ii) becomes generally
available to the public other than as a result of a disclosure by you or your
directors, officers, partners, employees, agents, advisors or representatives
(collectively, the "Representatives") or (iii) has been independently acquired
or developed by you or your Representatives without violating your obligations
under this agreement.
You hereby agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible transaction between the Company and you, and
that such information will be kept confidential by you, except that (i) any of
such information may be disclosed to your Representatives who have a bona fide
need to know such information for the purpose of evaluating any such possible
transaction between the Company and you (on the condition that you inform such
Representatives of the confidential nature of such information and direct them
to treat such information confidentially), and (ii) any disclosure of such
information may be made to which the Company consents in writing. In any event,
you shall be responsible for any breach of this agreement by any of your
Representatives and you agree, at your sole expense, to take all reasonable
measures (including but not limited to court proceedings) to restrain your
Representatives from prohibited or unauthorized disclosure or use of the
Evaluation Material.
In addition, without the prior written consent of the Company, unless, upon
receipt of an opinion of counsel, such disclosure is required by law or by your
exchange listing agreement you will not, and you will direct your
Representatives not to, disclose to any person either the fact that discussions
or negotiations are taking place concerning a possible transaction between the
Company and you or any of the terms, conditions or other facts with respect to
any such possible transaction, including the status thereof.
In the event you are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or other process) to disclose any Evaluation Material, it
is agreed that you will provide the Company with prompt notice of any such
request or requirement (written if practical) so that the Company may seek an
appropriate protective order or waive your compliance with the provisions of
this agreement. If, failing the entry of a protective order or the receipt of a
waiver hereunder, you are, in the opinion of your counsel, compelled to disclose
Evaluation Material, you may disclose that portion of the Evaluation Material,
that your counsel advises that you are compelled to disclose and you agree to
exercise reasonable efforts to obtain assurance that confidential treatment will
be accorded to that portion of the Evaluation Material which is being disclosed.
In any event, you will not oppose action by the Company to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded that Evaluation Material.
Until two years from the date of this agreement, you agree that none of
your officers, directors, employees or other Representatives who had access to
Evaluation Material will, directly or indirectly, initiate or maintain contact
(except for those contacts made in the ordinary course of business) with any
officer, director, employee or agent of the Company, except with the express
prior written permission of the Company, or solicit or cause to be solicited,
based on use of the Evaluation Materials, the employment of any director,
officer or employee of the Company or of any of its subsidiaries (whether
employed by the Company or its subsidiaries prior to, during or following such
period). It is understood that all (i) communications regarding any proposed
transaction, (ii) requests for additional information, (iii) requests for
facility tours or meetings with the Company's employees or lenders and (iv)
discussions or questions regarding procedures, will be submitted or directed to
Bruce P. Jeffer, Esq. of Jeffer, Mangels, Butler & Marmaro LLP, counsel for the
Company.
Although the Company has endeavored to include in the Evaluation Material
information known to it that it believes to be relevant for the purpose of your
investigation, you understand that neither the Company nor any of its
representatives or advisors has made or makes any representation or warranty as
to the accuracy or completeness of the Evaluation Material. You agree that
neither the Company nor its representatives or advisors shall have any liability
to you or any of your representatives or advisors resulting from the use of the
Evaluation Material.
<PAGE> 2
Clear Channel Radio, Inc.
May 31, 1996
All Evaluation Material is and shall remain the property of the Company. If
you are requested in writing by the Company to do so, you shall promptly
redeliver to the Company all written Evaluation Material and will not retain any
copies, extracts, or other reproductions in whole or in part of such written
material. All documents, memoranda, notes, and other writings whatsoever
prepared by you or your Representatives based on the information in the
Evaluation Material shall be destroyed, and such destruction shall be certified
in writing to the Company by an authorized officer supervising such destruction.
You agree that unless and until a definitive agreement between the Company
and you with respect to any transaction referred to in the first paragraph of
this agreement has been executed and delivered, neither the Company nor you will
be under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this or any written or oral expression with respect to
such a transaction by any of its Representatives, except, in the case of this
agreement, for the matters specifically agreed to herein. You further
acknowledge and agree that (i) the Company shall be free to negotiate with any
prospective party and enter into a definitive agreement without prior notice to
you or to any other person, (ii) the Company may establish procedures relating
to a sale of the Company and to change those procedures at any time without
notice to you or any other person, (iii) you shall not have any claims
whatsoever against the Company, its investment banker, or any of their
respective directors, officers, stockholders, employees, owners, partners,
affiliates, representatives, advisors, or agents arising out of or relating to a
sale of the Company (other than those as may be brought against the parties to a
definitive agreement, should such an agreement be entered into by you, in
accordance with the terms thereof), (iv) the Company reserves the right, in its
sole discretion, to reject any and all proposals made by you or any of your
Representatives with regard to a transaction between the Company and you, and to
terminate discussions and negotiations with you or any or all other prospective
buyers at any time, and (v) the Company reserves the right to refrain from
providing information to you even if it has provided such information to any
other person.
The terms set forth in this agreement may be modified or waived only by a
separate writing by the Company and you expressly so modifying or waiving such
terms.
Your obligations under this agreement shall expire two years from the date
hereof, except as otherwise specifically stated herein.
This agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware without regard to the conflict of laws provisions
thereof.
Should any party hereto institute any action or proceeding at law or in
equity to enforce any provision of this agreement, including an action for
declaratory relief, or for damages by reason of an alleged breach of any
provision of this agreement, or otherwise in connection with this agreement, or
any provision hereof, the prevailing party shall be entitled to recover from the
losing party or parties reasonable attorneys' fees and costs for services
rendered to the prevailing party in such action or proceeding. No consequential
or incidental damages will be available for any breach of this Agreement.
This agreement constitutes the entire agreement and understanding of the
parties hereto relating to the matters provided for herein and supersede any and
all prior agreements, arrangements, negotiations, discussions and understandings
relating to the matters provided for herein.
Very truly yours,
HEFTEL BROADCASTING CORPORATION
By: /s/ CARL PARMER
-------------------------------
Name: Carl Parmer
-----------------------------
Title: President
----------------------------
Confirmed and Agreed to:
CLEAR CHANNEL RADIO, INC.
By: /s/ MARK P. MAYS
---------------------------------------
Name: Mark P. Mays
-------------------------------------
Title: Senior Vice President
------------------------------------
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