<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
(Amendment No. 2)
AND
SCHEDULE 13D
(Amendment No. 3)
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
--------------------
JULY 9, 1996
(Date of Event Which Requires Filing Amendment to Statement on Schedule 13D)
<PAGE> 2
Introduction
This Amendment No. 2 to Schedule 14D-1 and Amendment No. 3 to
Schedule 13D amends and supplements the Tender Offer Statement on Schedule
14D-1 and the Schedule 13D filed with the Securities and Exchange Commission
(the "Commission") on June 7, 1996, as amended (as so amended from time to
time, the "Schedule 14D-1"), which relates to the tender 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"), as amended by the Supplement to Offer to Purchase dated
July 11, 1996 (the "Supplement"), a copy of which is attached hereto as Exhibit
99(a)(10), and in the related Letter of Transmittal. Purchaser is a
wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas
corporation ("Parent").
Item 1. Security and Subject Company.
Item 1(b) is hereby amended and supplemented by incorporating herein by
reference the information set forth under the headings "Extension of Offer" and
"Change in Capitalization" of the Supplement.
Item 1(c) is hereby amended and supplemented by incorporating herein by
reference the information set forth under the heading "Recent Price of the
Class A Stock" of the Supplement.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the
Bidder.
Item 5(a)-(e) is hereby amended and supplemented by incorporating herein by
reference the information set forth under the headings "Purchaser's Right to
Extend Offer," "Change in Capitalization", "Proposed Acquisition of Tichenor
Media System, Inc.", and "Amendments to Tender Offer Agreement" of the
Supplement.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
Item 7 is hereby amended and supplemented as set forth in Item 5 above.
Item 10. Additional Information.
Item 10(a) is hereby amended and supplemented as set forth in Item 5 above.
Item 10(b) is hereby amended and supplemented by incorporating herein by
reference the information set forth under the heading "Expiration of HSR
Waiting Period" of the Supplement.
Item 10(e) is hereby amended and supplemented by incorporating herein by
reference the information set forth under the heading "Certain Litigation" of
the Supplement.
Item 11. Material to be Filed as Exhibits.
Item 11 is amended to add the following:
99(a)(9) Text of Press Release dated July 9, 1996.
99(a)(10) Supplement to Offer to Purchase dated July 11, 1996.
99(a)(11) Text of Press Release dated July 11, 1996
<PAGE> 3
99(c)(15) Amendment No. 3 to Tender Offer Agreement dated July 2, 1996.
99(c)(16) Agreement and Plan of Merger dated July 9, 1996 between Parent
and Tichenor Media System, Inc.
99(c)(17) Stock Purchase Agreement dated as of July 9, 1996 by and among
Parent and McHenry T. Tichenor, Sr.
99(c)(18) Stock Purchase Agreement dated as of July 9, 1996 by and among
Parent and McHenry T. Tichenor, Jr.
99(c)(19) Stock Purchase Agreement dated as of July 9, 1996 by and among
Parent and Warren Tichenor.
99(c)(20) Stock Purchase Agreement dated as of July 9, 1996 by and among
Parent and William Tichenor.
99(c)(21) Stock Purchase Agreement dated as of July 9, 1996 by and among
Parent and Jean Russell.
<PAGE> 4
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: July 11, 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
---------------------------------
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Seq.
Exhibit No. Description Page No.
----------- ----------- --------
<S> <C> <C>
99(a)(9) Text of Press Release dated July 9, 1996
99(a)(10) Supplement to Offer to Purchase dated July 11, 1996
99(a)(11) Text of Press Release dated July 11, 1996
99(c)(15) Amendment No. 3 to Tender Offer Agreement dated July 2,
1996
99(c)(16) Agreement and Plan of Merger dated July 9, 1996 between
Parent and Tichenor Media System, Inc.
99(c)(17) Stock Purchase Agreement dated as of July 9, 1996 by and
among Parent and McHenry T. Tichenor, Sr.
99(c)(18) Stock Purchase Agreement dated as of July 9, 1996 by and
among Parent and McHenry T. Tichenor, Jr.
99(c)(19) Stock Purchase Agreement dated as of July 9, 1996 by and
among Parent and Warren Tichenor.
99(c)(20) Stock Purchase Agreement dated as of July 9, 1996 by and
among Parent and William Tichenor.
99(c)(21) Stock Purchase Agreement dated as of July 9, 1996 by and
among Parent and Jean Russell.
</TABLE>
<PAGE> 1
CLEAR CHANNEL TO CREATE
LEADING SPANISH RADIO BROADCASTER
San Antonio, Texas, July 9, 1996 - Lowry Mays, President and Chief Executive
Officer of Clear Channel Communications, Inc. (Clear Channel), and McHenry T.
Tichenor, Jr., President and Chief Executive Officer of Tichenor Media System,
Inc. (TMS), jointly announced today that, subject to Clear Channel completing
its previously announced tender offer to acquire Heftel Broadcasting
Corporation (Heftel), Clear Channel will submit to the Board of Directors of
Heftel an agreement to merge Heftel and TMS (the Merger). Under the terms of
the proposed Merger, TMS stockholders will exchange the capital stock of TMS
for approximately 5.68 million shares of Heftel Class A common stock and
approximately $3.2 million in cash.
In addition to the completion of Clear Channel's tender offer, the Merger is
subject to certain conditions, including approval of the Merger by the Board of
Directors and stockholders of Heftel, approval of the Merger by the
stockholders of TMS, and the approval of the Federal Communications Commission
and the Federal Trade Commission. There can be no assurance that the
conditions will be satisfied or that the Merger will be consummated.
<PAGE> 2
In order to comply with FCC attribution rules and regulations, as part of the
terms of the proposed Merger, Clear Channel would convert its Class A common
stock in Heftel into newly authorized non-voting Class B common stock.
Additionally, it is anticipated that Clear Channel's ownership in excess of 30%
of the outstanding shares of common stock of Heftel would be transferred to
Heftel. Clear Channel would receive an option to reacquire such shares from
Heftel subject to FCC approval.
The combined Heftel/TMS company (New Heftel) would be the only Spanish-language
radio company to own and operate Spanish-language radio stations in each of the
top-ten Hispanic markets in the United States. New Heftel would own the top
rated Spanish-language radio station in eight of the top ten Hispanic markets
and would own the top rated radio station in any format in four of the top ten
markets (Los Angeles, San Antonio, El Paso, and McAllen/Brownsville/Harlingen)
among Adults 25-54 years old. McHenry Tichenor, Jr. would become the Chief
Executive Officer of New Heftel which would be headquartered in Dallas, Texas.
Mr. Mays said, "We went forward with the tender offer for Heftel based on a
strong belief in Spanish-language radio and the fact that we were uniquely
positioned to consolidate the business. We view the merger of Heftel and
Tichenor Media System as the most essential step in the process of
consolidating the Spanish-language radio industry. We believe that New
Heftel's strategic position and the Tichenor management team will create a
platform to be a leader in Spanish-language radio. Under Mac Tichenor's
management, Tichenor Media System commands the largest audience and revenue
share of any Spanish-language radio operator in each of its markets. TMS
primarily did it the hard way, by acquiring and converting English-formatted
stations to top-rated Spanish-language stations. In so doing, TMS has provided
its shareholders a superior return, and we are optimistic that our investment
in New Heftel will continue to increase in value under Mac's leadership."
Mr. Tichenor said, "The combination of Heftel and Tichenor Media System will
<PAGE> 3
create the largest Spanish-language radio broadcaster in the United States and
the only one with a presence in each of the top ten Hispanic markets. We
believe that the combination of these two highly successful, quality-driven
companies will allow us to offer exciting and unprecedented opportunities to
our audiences, advertisers, employees and shareholders."
New Heftel's radio stations will reach approximately 17.3 million Hispanics, or
approximately 63% of the total Hispanic population in the United States.
Hispanic households on average are larger younger and growing faster in number
than Non-Hispanic households. As a result, Hispanic-related consumer
expenditures are expected to outpace the growth in total consumer expenditures
in the United States, and Hispanic advertising revenues are expected to grow at
a faster rate than radio advertising revenues in the general market.
Subsequent to the Merger, New Heftel will be the leading Spanish-language radio
company in the United States. The stations of the merged company, including
pending acquisitions, will be as follows:
<TABLE>
<CAPTION>
HISPANIC
MARKET HISPANIC HEFTEL TICHENOR
RANK CITY POPULATION STATIONS STATIONS
---- ---- ---------- -------- --------
<S> <C> <C> <C> <C>
1 Los Angeles 6,012,000 KLVE-FM, KTNQ-AM
2 New York 3,278,000 WADO-AM, WPAT-AM
3 Miami 1,358,000 WAMR-FM, WRTO-FM
WAQI-AM, WQBA-AM
4 San Francisco 1,120,000 KSOL-FM, KYLZ-FM(a)
5 Chicago 1,106,000 WLXX-AM WOJO-FM, WIND-AM
6 Houston 1,078,000 KLTN-FM, KLAT-AM
KLTP-FM, KRTX-FM
KLTO-FM, KMPQ-AM
7 San Antonio 1,018,000 KXTN-FM, KROM-FM
KCOR-AM, KXTN-AM
8 McAllen/Brownsville/ 803,000 KIWW-FM, KGBT-AM
Harlingen KQXX-FM
9 Dallas/Ft. Worth 740,000 KESS-AM, KICI-FM
KMRT-AM, KMRT-FM
KHCK-FM, KINF-AM
10 El Paso 644,000 KBNA-FM, KAMA-AM
KBNA-AM
33 Las Vegas 137,000 KLSQ-AM
</TABLE>
- ---------------
SOURCE: MARKET STATISTICS, INC., U.S. CENSUS BUREAU, STRATEGY RESEARCH
CORPORATION
(a) KSOL-FM and KYLZ-FM will switch to a Spanish-language format upon TMS
completing its previously announced acquisition (anticipated closing in July
1996). These stations will be the only full-market FM stations in the
Spanish-language format serving the Bay Area.
Clear Channel is a diversified broadcasting company which, including pending
acquisitions, owns and/or operates 94 radio stations and 18 television stations
in the United States. The Company also has broadcasting operations in
Australia and New Zealand. Its stock is traded on the New York Stock Exchange
under the symbol CCU.
Heftel Broadcasting Corporation, headquartered in Las Vegas, Nevada, owns and
operates 16 radio stations in six markets, including five of the top Hispanic
markets in the United States. Its Class A Common Stock is traded on NASDAQ
under the symbol HBCCA.
Tichenor Media System is headquartered in Dallas, Texas. Including pending
acquisitions, TMS owns or operates 20 radio stations in six of the top ten
Hispanic markets in the United States. TMS, a private, family-owned
Spanish-language broadcasting company, was founded in 1949, and has been a
pioneer in Spanish-language radio. Star Media acted as advisor to TMS.
--END--
<PAGE> 1
EXHIBIT 99(A)(10)
Supplement dated July 11, 1996
To The Offer to Purchase dated June 7, 1996
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 HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY
25, 1996, UNLESS THE OFFER IS FURTHER 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"). SEE SECTION 14
OF THE 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 the 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 the Offer to Purchase.
Questions and requests for assistance or additional copies of the 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 the Offer to Purchase.
---------------------
The Dealer Manager for the Offer is:
CS FIRST BOSTON
July 11, 1996.
<PAGE> 2
TO THE HOLDERS OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK OF
HEFTEL BROADCASTING CORPORATION
The following information amends and supplements the Offer to Purchase
dated June 7, 1996 (the "Offer to Purchase") of Clear Channel Radio, Inc., a
Nevada corporation (the "Purchaser") and an indirect wholly-owned subsidiary of
Clear Channel Communications, Inc., a Texas corporation ("Parent"), pursuant to
which the Purchaser has offered 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 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 Supplement, the Offer to Purchase and the related Letter of Transmittal
(which, as amended from time to time, collectively constitute the "Offer").
Terms not defined herein have the meanings set forth in the Offer to Purchase.
EXTENSION OF OFFER
The Purchaser has extended the Offer. THE OFFER AND WITHDRAWAL RIGHTS WILL
NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 25, 1996,
UNLESS THE OFFER IS FURTHER EXTENDED. All references to the Expiration Date in
the Offer to Purchase are amended to mean 12:00 Midnight, New York City time, on
Thursday, July 25, 1996, unless the Purchaser shall have further 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. As of the close of business on July 10, 1996,
145,200 Shares had been tendered in the Offer.
CHANGE IN CAPITALIZATION
The following information amends and supplements the information set forth
in the Offer to Purchase under the caption "Introduction."
The Company has informed the Purchaser that subsequent to June 7, 1996 (the
date of the Offer to Purchase), all Shares of Class B Common Stock that are not
subject to the Stockholder Purchase Agreement (including Shares of Class B
Common Stock issuable upon exercise of warrants) were sold or transferred by the
holders thereof in transactions that caused such Shares to be converted into
Shares of Class A Common Stock. In addition, the Company has informed the
Purchaser that subsequent to June 7, 1996, options to acquire 43,333 Shares of
Class A Common Stock were exercised. Consequently, as of July 9, 1996, there
were (a) 6,836,018 shares of Class A Common Stock issued and outstanding and
548,506 shares of Class A Common Stock reserved for issuance upon exercise of
outstanding stock options, and (b) 3,356,529 shares of Class B Common Stock
issued and outstanding and 806,678 shares of Class B Common Stock reserved for
issuance upon exercise of outstanding warrants.
PURCHASER'S RIGHT TO EXTEND OFFER
As discussed more fully below under the caption "Amendments to Tender Offer
Agreement", on July 2, 1996, the Purchaser and the Company amended the Tender
Offer Agreement to provide that the Purchaser may unilaterally extend the
Expiration Date for the Offer until such time as all conditions to the purchase
of the Shares pursuant to the Tender Offer Agreement are met, unless the Tender
Offer Agreement has been terminated in accordance with its terms. Accordingly,
the following two paragraphs amend and restate in their entirety the third and
fifth paragraphs respectively under the caption "1. Terms of the Offer" of the
Offer to Purchase.
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 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.
<PAGE> 3
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, or (e) terminate the Offer, except as provided in the Tender
Offer Agreement.
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) 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.
The following paragraph amends and restates in its entirety the first
paragraph under the caption "2. Acceptance for Payment and Payment for Shares"
of the Offer to Purchase.
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 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.
The following amends and restates in their entirety the first three lines
of the first paragraph under the caption "14. Certain Conditions of the Offer"
of the Offer to Purchase.
Notwithstanding any other provisions of the Offer, and in addition to
the Purchaser's rights to extend and amend the Offer (subject to the
provisions of the Tender Offer Agreement), the Purchaser shall not be
required to accept for payment or, 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,
pay for, tendered Shares unless and until the following conditions shall
have been satisfied or waived:
The following amends and restates in its entirety the second paragraph
under the caption "14. Certain Conditions of the Offer" of the Offer to
Purchase.
If any of the foregoing conditions shall not have been satisfied prior
to acceptance for payment of any tendered Shares, the Purchaser may extend
the period during which the Offer is to remain open, or subject to the
terms of the Tender Offer Agreement, terminate or amend the Offer or,
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, tendered Shares.
PROPOSED ACQUISITION OF TICHENOR MEDIA SYSTEM, INC.
The following information amends and supplements the information set forth
in the Offer to Purchase under the captions "7. Effect of the Offer on the
Market for the Class A Common Stock, Stock Quotation and Exchange Act
Registration", "8. Certain Information Concerning the Company", "9. Certain
Information Concerning the Purchaser and Parent", and "12. Purpose of the Offer;
The Tender Offer Agreement, Stockholder Purchase Agreement, Settlement
Agreements and Agreements Not to Compete".
2
<PAGE> 4
On July 9, 1996, Parent and Tichenor Media System, Inc., a Texas
corporation ("Tichenor"), entered into an Agreement and Plan of Merger (the
"Tichenor Merger Agreement") which, subject to the terms and conditions thereof,
provides for the acquisition of Tichenor by the Company following the Closing of
the Offer and the closing of the Stockholder Purchase Agreement. The existing
management and Board of Directors of the Company were not involved in the
negotiations concerning the acquisition of Tichenor. Tichenor is a national
radio broadcasting company engaged in the business of acquiring, developing and
operating Spanish language radio stations in the major Hispanic markets in the
United States. Tichenor owns or operates 17 Spanish language AM and FM stations
in six markets, including five of the top Hispanic markets in the United States.
If the Tichenor Merger is consummated, the Company will be the only Spanish
language radio company to own and operate Spanish language radio stations in
each of the top ten Hispanic markets in the United States.
Pursuant to the Tichenor Merger Agreement, a to-be-formed wholly-owned
subsidiary of the Company will be merged (the "Tichenor Merger") with and into
Tichenor and the shares of Tichenor capital stock not owned by Parent or its
affiliates outstanding immediately prior to the Tichenor Merger (other than
certain preferred stock) will be converted into shares of the Company's Class A
Common Stock. Pursuant to the Tichenor Merger Agreement, (i) the 667,504.93
shares of outstanding Tichenor common stock not owned by Parent or its
affiliates will be converted into an aggregate of approximately 5,223,960 shares
of the Company's Class A Common Stock, (ii) the 35,772.48 shares of Tichenor's
outstanding Junior Preferred Stock will be converted into on aggregate of
approximately 155,531 shares of the Company's Class A Common Stock, (iii) the
3,000 shares of Tichenor's outstanding 14% Senior Redeemable Cumulative
Preferred Stock will be converted into the right to receive an aggregate of
$3,000,000, plus all accrued and unpaid dividends through December 31, 1995, and
(iv) an existing warrant of Tichenor, or the shares received upon exercise
thereof if the warrant is exercised prior to the effective time of the Tichenor
Merger, shall be converted into 180,000 shares of the Company's Class A Common
Stock. As a result of the Tichenor Merger, Tichenor will become a wholly-owned
subsidiary of the Company.
Prior to consummation of the Tichenor Merger, Parent will purchase 16,664
shares of Tichenor common stock from certain shareholders of Tichenor for
approximately $3,000,000. At the effective time of the Tichenor Merger, each
share of Tichenor common stock owned by Parent or any affiliate of Parent will
be converted into 7.8261 shares of a new class of common stock of the Company
that will not have any voting rights except in certain specified circumstances
described below and as required by law ("Nonvoting Common Stock") and each share
of the Company's Class A Common Stock owned by Parent or any affiliate of Parent
(including the Purchaser) will be converted into one share of Nonvoting Common
Stock. On the closing date of the Tichenor Merger, Parent will transfer a
sufficient number of shares of Nonvoting Common Stock to the Company for $.01
per share so that Parent and its affiliates own 30% of the total number of
shares of Class A Common Stock and Nonvoting Common Stock outstanding
immediately following such transfer, and concurrently therewith, the Company
will grant Parent an immediately exercisable option (the "Option") to acquire a
number of shares of Nonvoting Common Stock equal to the amount so transferred to
the Company for $.01 per share. Exercise of the Option may in certain
circumstances require prior FCC consent.
If the Tichenor Merger is consummated, immediately thereafter the former
shareholders and warrant holders of Tichenor will own approximately 5,559,491
shares of the Class A Common Stock of the Company, representing approximately
55.2% of the total outstanding Class A Common Stock and approximately 32.3% of
the total outstanding common stock of the Company on a fully diluted basis at
such time. In addition, if all of the Shares subject to the Stockholder Purchase
Agreement are acquired by the Purchaser and the only Shares tendered and
acquired by the Purchaser in the Offer are those issuable upon exercise of
warrants and options, then immediately following the Tichenor Merger (a) Parent,
the Purchaser and their affiliates will own approximately 4,319,447 outstanding
shares of the Company's Nonvoting Common Stock, representing approximately 30%
of the total outstanding common stock of the Company at such time, and will own
the Option to acquire approximately 2,839,479 shares of Nonvoting Common Stock
(which when combined with the outstanding Nonvoting Common Stock then owned by
Parent, the Purchaser and their affiliates, will constitute approximately 41.5%
of the total outstanding common stock of the Company on a fully diluted basis),
and (b) the other stockholders of the Company would own the remaining 4,519,219
outstanding shares
3
<PAGE> 5
of Class A Common Stock, representing approximately 44.8% of the total
outstanding Class A Common Stock and approximately 26.2% of the total
outstanding common stock of the Company on a fully diluted basis at such time.
Upon Closing of the Offer and closing of the Stockholder Purchase Agreement,
there will be no outstanding shares of the Company's existing Class B Common
Stock.
The Tichenor Merger Agreement provides that the Company will take such
actions necessary such that immediately after the effective time of the Tichenor
Merger, five designees of Tichenor shall constitute the entire Board of
Directors of the Company. The Tichenor Merger Agreement also provides that at or
prior to the effective time of the Tichenor Merger, the Company will enter into
an Employment Agreement with McHenry T. Tichenor, Jr. pursuant to which Mr.
Tichenor will serve as Chairman, President and Chief Executive Officer of the
Company for a five year term. The Tichenor Merger Agreement also provides that
the Company will grant certain demand and "piggyback" registration rights to
certain former Tichenor shareholders (including Mr. Tichenor) who will own an
aggregate of 5,407,994 shares of Class A Common Stock following the Tichenor
Merger (collectively, the "Major Tichenor Shareholders"), and will grant certain
demand and piggyback registration rights to Parent with respect to any shares of
Class A Common Stock that may be held from time to time by Parent and/or its
affiliates following the Tichenor Merger. It is also contemplated that Parent,
the Purchaser and the Major Tichenor Shareholders will enter into a Stockholders
Agreement with the Company whereby such stockholders will agree to certain
restrictions on the transfer of their shares of common stock of the Company and
will grant certain rights of first refusal and "tag-along" rights with respect
to certain sales of such shares.
Consummation of the Tichenor Merger is subject to a number of conditions,
including the Closing of the Offer and the closing of the Stockholder Purchase
Agreement, approval of the Tichenor Merger Agreement by the Board of Directors
(the "Board") and the stockholders of the Company following the Closing of the
Offer and the closing of the Stockholder Purchase Agreement; the receipt by the
Company of an opinion from a nationally recognized investment banking firm or
financial advisor that the consideration to be paid by the Company in the
Tichenor Merger is fair to the stockholders of the Company from a financial
point of view; expiration or termination of the applicable waiting period under
the HSR Act; effectiveness under the Securities Act of 1933, as amended, of a
registration statement relating to the securities of the Company to be issued in
the Tichenor Merger; approval of the Tichenor Merger Agreement by the
shareholders of Tichenor; no material adverse effect occurring with respect to
Tichenor or the Company; the receipt and finalization of all required FCC
approvals, licenses and authorizations; and the expiration of a period of at
least six months and one day following the Closing of the Offer and the closing
of the Stockholder Purchase Agreement. There can be no assurance that all of
these conditions will be satisfied or waived or that the Tichenor Merger will be
consummated. As stated above, if the Board of Directors of the Company approves
the Tichenor Merger Agreement following the Closing of the Offer and the closing
of the Stockholder Purchase Agreement, the Tichenor Merger Agreement will be
submitted to the stockholders of the Company for their approval. Parent and the
Purchaser, who will own a majority of the outstanding shares of the Company's
Common Stock at such time, intend to vote all such shares in favor of the
Tichenor Merger Agreement.
The Tichenor Merger Agreement is subject to termination upon the occurrence
of certain events, including by Tichenor if, subsequent to the Closing of the
Offer and the closing of the Stockholder Purchase Agreement, Parent and its
affiliates own or have a contractual right to purchase more than 90% of the
Company's Common Stock then outstanding.
If the Tichenor Merger is consummated, Mr. Tichenor and certain members of
his family (collectively, the "Tichenor Family" ) will own an aggregate of
approximately 4,569,404 shares of Class A Common Stock (representing
approximately 45.3% of the then outstanding Class A Common Stock) and may have
the ability, if they act together as a group, to control the Company. The
members of the Tichenor Family have entered into a Voting Agreement pursuant to
which the majority of the shares of Tichenor common stock and Junior Preferred
Stock currently held by them, as well as the approximately 4,434,303 shares of
the Company's Class A Common Stock to be received in exchange therefor in the
Tichenor Merger, shall be voted in accordance with the instructions of McHenry
T. Tichenor, Jr. or McHenry T. Tichenor, Sr. until such time as the FCC shall
have approved an amendment to such agreement, whereupon the shares subject to
the voting agreement shall be voted in accordance with the instructions of the
holders of a majority of such shares.
4
<PAGE> 6
Parent and its affiliates (including the Purchaser) will own only Nonvoting
Common Stock as a result of the Tichenor Merger and thus will not have the right
to vote for the election of directors of the Company, although Parent and its
affiliates will have certain class voting rights discussed in more detail below.
The Nonvoting Common Stock that Parent and its affiliates will receive in
the Tichenor Merger will convert into Class A Common Stock automatically upon
sale or transfer to a person or entity other than Parent or an affiliate of
Parent. Each share of the Nonvoting Common Stock will also be convertible into
Class A Common Stock at the option of its holder. In addition, Parent and its
affiliates may convert shares of Class A Common Stock held by them into shares
of Nonvoting Common Stock at their option.
Holders of the Nonvoting Common Stock will in certain circumstances have
certain voting rights. Specifically, so long as Parent and its affiliates own at
least 20% of the Company's common stock then outstanding (calculated as if
Parent owns all shares of Nonvoting Common Stock subject to the Option), the
Company shall not, and shall not permit any subsidiary to, without the vote or
consent by the holders of a majority of the Nonvoting Common Stock voting as a
single class, take any of the following actions: (i) effect the sale, lease or
other transfer of all or substantially all of the assets of the Company, or any
merger or consolidation involving the Company where the stockholders of the
Company immediately prior to such transaction would not own at least 50% of the
capital stock of the surviving entity, or any reclassification,
recapitalization, dissolution, liquidation or winding up of the Company; (ii)
authorize, issue or obligate itself to issue any shares of Preferred Stock;
(iii) make or permit any amendment to the Company's certificate of incorporation
that adversely affects the rights of the holders of Nonvoting Stock; (iv)
declare or pay any non-cash dividends on or make any other non-cash distribution
on its common stock; or (v) make or permit any amendment or modification to the
Company's certificate of incorporation concerning the Company's common stock.
Concurrently with the execution of the Tichenor Merger Agreement, Parent
and a subsidiary of Tichenor entered into a Loan Agreement (the "Tichenor Loan
Agreement"), pursuant to which, and subject to the terms and conditions thereof,
Parent has agreed to loan up to $40,000,000 to the Tichenor subsidiary to
finance the subsidiary's acquisition of two FM radio stations and related assets
serving the San Francisco, San Jose and Oakland markets. Parent's obligation to
provide funds under the Tichenor Loan Agreement is subject to certain
conditions, including approval of the Tichenor Merger Agreement by the
shareholders of Tichenor.
The foregoing summary of the Tichenor Merger Agreement and related
agreements does not purport to be complete and is qualified in its entirety by
reference to the text of such documents, which is herein incorporated by
reference, copies of which have been filed as exhibits to the Schedule 14D-1.
Set forth below is certain selected consolidated financial information
provided by Tichenor to Parent with respect to Tichenor and its subsidiaries for
the years ended December 31, 1994 and 1995 and for the five months ended May 31,
1996. The selected data for the years ended December 31, 1994 and 1995 are
derived from the audited financial statements of Tichenor for such years.
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------- FIVE MONTHS ENDED
1994 1995 MAY 31, 1996
------- ------- -----------------
(IN THOUSANDS)
<S> <C> <C> <C>
Total revenues................................. $37,326 $42,698 $18,918
Total operating expenses....................... 30,675 33,308 15,048
Operating income............................... 6,651 9,390 3,870
Non-operating expenses, net.................... 4,331 7,467 2,664
Net income..................................... 2,320 1,923 1,206
</TABLE>
5
<PAGE> 7
CONSOLIDATED BALANCE SHEET DATA:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------- AT MAY 31,
1994 1995 1996
------- ------- -----------------
(IN THOUSANDS)
<S> <C> <C> <C>
Working capital................................ $ 5,449 $ 7,487 $ 9,096
Total assets................................... 48,869 52,264 56,168
Long-term debt, less current portion........... 17,834 24,675 27,847
Stockholders' equity........................... 14,865 16,488 17,715
</TABLE>
RECENT PRICE OF THE CLASS A STOCK
The following information amends and supplements the information set forth
in the Offer to Purchase under the caption "6. Price Range of the Class A Stock;
Dividends on the Shares." On July 9, 1996, the last full day of trading prior to
the announcement of the execution of the Tichenor Merger Agreement, the closing
price per Share of Class A Common Stock as reported on the Nasdaq National
Market was $31.75. On July 10, 1996, the closing price per Share of Class A
Common Stock as reported on the Nasdaq National Market was $32.50.
AMENDMENTS TO TENDER OFFER AGREEMENT
The following information amends and supplements the information set forth
in the Offer to Purchase under the caption "11. Contacts with the Company;
Background of the Offer", and the description of the Tender Offer Agreement set
forth in the Offer to Purchase under the caption "12. Purpose of the Offer; The
Tender Offer Agreement, Stockholder Purchase Agreement, Settlement Agreements
and Agreements Not to Compete."
On June 20, 1996, the parties to the Tender Offer Agreement entered into an
amendment ("Amendment No. 2") to the Tender Offer Agreement which amends certain
provisions therein as follows:
(i) Amendment No. 2 amends the provision relating to the Company's
filing with the Commission of a Solicitation/Recommendation Statement on
Schedule 14D-9 (as may be amended from time to time, the "Schedule 14D-9")
to require the Company to file on or before June 21, 1996 such Schedule
14-9 which shall reflect either the recommendation of the Company's Board
to accept the Offer or a statement by the Board that it is not expressing
an opinion, and is remaining neutral, with respect to the Offer. The
Company is required to mail copies of such Schedule 14D-9, excluding
exhibits, to its stockholders on or before June 21, 1996. The Purchaser has
been informed by the Company that such copies were mailed on June 21, 1996,
and that the Board has determined not to express an opinion, and to remain
neutral, with respect to whether stockholders should accept the Offer and
tender their Shares.
(ii) Amendment No. 2 adds a provision to the Tender Offer Agreement
which states that the Company will, concurrently with the Closing of the
Offer, take all actions necessary to cause persons designated by the
Purchaser to become directors of the Company so that such persons shall
constitute at least a majority of the Board or if the Purchaser so
requests, all of the directors of the Company. In furtherance thereof, the
Company will increase the size of the Board, or use reasonable efforts to
secure the resignation of directors, or both, as is necessary to permit the
Purchaser's designees to be elected to the Board. At such time, the Company
also will cause persons designated by the Purchaser to constitute at least
a majority of each committee of the Board or if the Purchaser so requests,
all of the directors on each committee of the Company's Board. The
Company's obligations to appoint designees to the Board shall be subject to
Section 14(f) of the Exchange Act, and Rule 14f-1 promulgated thereunder.
The Purchaser is required to supply the Company will all information which
the Company shall reasonably request with respect to nominees in connection
with the filing required by Section 14(f) of the Exchange Act. As of the
date of this Supplement, the Purchaser had not determined the persons who
shall be designees to the Board.
(iii) Amendment No. 2 amends the condition in the Tender Offer
Agreement that the Company's representations and warranties therein remain
true and correct in all material respects to provide that the
6
<PAGE> 8
representation and warranty that the Board has resolved to recommend
acceptance of the Offer need only be true as of June 1, 1996.
(iv) Amendment No. 2 amends the termination provision of the Tender
Offer Agreement described in clause (iv) under "12. Purpose of the Offer;
The Tender Offer Agreement, Stockholder Purchase Agreement, Settlement
Agreements and Agreements Not to Compete -- Tender Offer Agreement --
Termination" to provide that the Tender Offer Agreement and the Offer may
be terminated by either the Company or the Purchaser at any time prior to
the Closing of the Offer, if (a) the Company shall have determined pursuant
to duly adopted resolutions of the Board, to recommend against acceptance
of the Offer by reason of receipt of a Takeover Proposal (as such term is
defined in the Tender Offer Agreement); (b) the Company after receipt of a
Takeover Proposal shall not have, within five days after being so requested
by the Purchaser, determined pursuant to duly adopted resolutions to
recommend acceptance of the Offer, or after so recommending acceptance of
the Offer shall have withdrawn or modified or resolved to modify or
withdraw such recommendation; or (c) 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
subsection (a) hereof 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, recommends against acceptance of the Offer, but
within five business days thereafter the Company publicly withdraws its
recommendation against acceptance of the Offer.
On July 2, 1996, the parties to the Tender Offer Agreement entered into a
third amendment ("Amendment No. 3") to the Tender Offer Agreement which amends
the Tender Offer Agreement to allow the Purchaser to extend the Expiration Date
for the Offer until such time as all conditions to the consummation of the
transaction contemplated thereby are met, unless the Tender Offer Agreement has
been terminated in accordance with the provisions thereof.
The foregoing summary of the Tender Offer Agreement, as amended, does not
purport to be complete and is qualified in its entirety by reference to the text
of Amendment No. 2 and the text of Amendment No. 3, both of which are herein
incorporated by reference, and a copy of each of which has been filed as an
exhibit to the Schedule 14D-1.
On June 20, 1996, the Selling Stockholders executed a consent whereby each
Selling Stockholder consented to Amendment No. 2 to the Tender Offer Agreement
and acknowledged and agreed that any references to the Tender Offer Agreement in
the Stockholder Purchase Agreement shall mean the Tender Offer Agreement, as
amended by Amendments No. 1 and 2 thereto and any subsequent amendments.
EXPIRATION OF HSR WAITING PERIOD
The following information amends and supplements the information set forth
in the Offer to Purchase under the captions "Introduction", "14. Certain
Conditions of the Offer" and "15. Certain Regulatory and Legal Matters."
The waiting period under the HSR Act has expired. Accordingly, the
condition to the Offer requiring the expiration or termination of such waiting
period has been satisfied.
CERTAIN LITIGATION
On June 14, 1996, a purported stockholder class action suit was filed in
the Court of Chancery in the State of Delaware (Levine v. Heftel, et al., C.A.
No. 15066). The Levine action names as defendants the Company, Parent and
certain individual directors and senior executive officers of the Company
(collectively, the "Individual Defendants"). In general, the Levine action
alleges that, among other things, the defendants breached their fiduciary
duties, because the Offer is "grossly unfair" to the stockholders and is
"substantially below true value and is a product of defendants' conflict of
interest." The action also alleges that the Company and Parent failed to
adequately reveal the consideration involved in the Settlement Agreements and
Agreements Not to Compete entered into with Cecil Heftel and Carl Parmer,
despite the fact that such information was disclosed in the Schedule 14D-1 and
Offer to Purchase. Additionally, the action alleges that given the Individual
Defendants' "domination and control" of the Board, they cannot be expected to
act
7
<PAGE> 9
independently, and consequently, in order for such individuals not to breach
their fiduciary duties, a recommendation of the transaction from "a truly
independent representative of the public stockholders" or obtaining the majority
approval of the public unaffiliated stockholders of the Company is required. The
plaintiff is seeking, among other things, certification as a class action,
preliminary and permanent injunctive relief, rescissory damages in the event the
Offer is consummated, compensatory damages, and costs, disbursements and legal
fees relating to the action. Parent believes that the Levine action is meritless
and intends to oppose it vigorously.
The foregoing summary of the Levine action does not purport to be complete
and is qualified in its entirety by reference to the text of such action, a copy
of which has been filed as an exhibit to the Schedule 14D-1.
CLEAR CHANNEL RADIO, INC.
8
<PAGE> 10
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, 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
Institutions:
Tender and Exchange Tender and Exchange Department (212) 816-6213
Department 101 Barclay Street
P.O. Box 11248 Receive and Deliver Window Information Telephone:
Church Street Station New York, New York 10286 (800) 507-9357
New York, New York 10286-1248
</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
EXHIBIT 99(a)(11)
CLEAR CHANNEL COMMUNICATIONS, INC.
For Immediate Release
For Further Information Contact: Randall Mays (210) 822-2828
CLEAR CHANNEL EXTENDS CASH TENDER OFFER
TO JULY 25, 1996 FOR HEFTEL BROADCASTING CORPORATION
San Antonio, Texas, July 11, 1996 -- Clear Channel Radio, Inc., an
indirect wholly owned subsidiary of Clear Channel Communications, Inc., today
announced the extension to July 25, 1996 of its tender offer for all
outstanding shares of Class A and Class B Common Stock of Heftel Broadcasting
Corporation at $23.00 per share, net to the seller in cash. The tender offer
and withdrawal rights will now expire at 12:00 midnight, New York City time, on
Thursday, July 25, 1996, unless the tender offer is further extended. Clear
Channel Radio, Inc. also announced that through the close of business on July
10, 1996, 145,200 shares of Heftel's common stock had been tendered pursuant to
the tender offer.
<PAGE> 1
EXHIBIT 99(c)(15)
AMENDMENT NO. 3 TO TENDER OFFER AGREEMENT
The Tender Offer Agreement dated June 1, 1996, as amended, between
Clear Channel Radio, Inc., a Nevada corporation, and Heftel Broadcasting
Corporation, a Delaware corporation, is hereby amended as follows:
1. Section 1.1 is deleted in its entirety and replaced by the
following new Section 1.1:
"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
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, or (e)
terminate the Offer except in accordance with Section
8.1. Notwithstanding any other provision in this
Agreement to the contrary, Parent shall have the
right to extend the termination date for the Offer
until such time as all conditions to the consummation
of the transactions contemplated hereby are met,
unless this Agreement has been terminated in
accordance with the provisions hereof. 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."
(SIGNATURE PAGE FOLLOWS)
<PAGE> 2
IN WITNESS WHEREOF, each of the undersigned has caused this Amendment
to be executed as of the 2nd day of July, 1996 by its officer thereunto duly
authorized.
CLEAR CHANNEL RADIO, INC.
By: /s/ Randall Mays
-------------------------------------
Name: Randall Mays, Vice President
HEFTEL BROADCASTING CORPORATION
By: /s/ Carl Parmer
-------------------------------------
Name: Carl Parmer, President and
Co-Chief Executive Officer
<PAGE> 1
EXHIBIT 99(c)(16)
AGREEMENT
AND
PLAN OF MERGER
BETWEEN
CLEAR CHANNEL COMMUNICATIONS, INC. ("PARENT")
AND
TICHENOR MEDIA SYSTEM, INC. ("TICHENOR")
JULY 9, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Governing Instruments, Directors and Officers of the Surviving Corporation. . . . . . . . . . . . . 12
2.4 Effect on Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.6 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7 Effective Time of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.8 Taking of Necessary Action; Further Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TICHENOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 Authority and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4 FCC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6 Capital Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.7 Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.8 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.9 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.10 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.11 Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT, HEFTEL AND HEFTEL SUB . . . . . . . . . . . . . . . . . . 27
4.1 Representations and Warranties of Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 Representations and Warranties of Heftel and Heftel Sub . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 5 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.1 Conduct by Parent Pending Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.2 Conduct of Business by Tichenor Pending Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Conduct of Business by Heftel Pending Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.4 Access to Assets, Personnel and Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.5 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.6 Heftel Stockholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.7 Tichenor Shareholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.8 Registration Statement and Proxy Statement/Prospectus. . . . . . . . . . . . . . . . . . . . . . . . 39
5.9 Stock Exchange Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10 Additional Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.11 Agreements of Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.12 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.13 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.14 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
5.15 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.16 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.17 Stockholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.18 Indemnity Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.19 Insurance; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.20 Parent Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.21 Option Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.22 Composition of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE 6 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1 Conditions to Each Party's Obligation to Effect the Merger. . . . . . . . . . . . . . . . . . . . . 46
6.2 Conditions to Obligations of Parent, Heftel and Heftel Sub. . . . . . . . . . . . . . . . . . . . . 47
6.3 Conditions to Obligation of Tichenor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 7 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.1 Termination Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 8 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.1 Nonsurvival of Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.2 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.5 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.6 Entire Agreement; No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.7 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.8 No Remedy in Certain Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.10 Indemnification for Negligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.11 Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.12 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.13 Incorporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
Disclosure Letter
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
1.1(a) - Form of Heftel's Second Amended and Restated Certificate of Incorporation
1.1(b) - Option Agreement
5.11 - Form of Affiliate Letter
5.15 - Registration Rights Agreement
5.16 - Employment Agreement
5.17 - Stockholders Agreement
5.18 - Indemnity Agreement
5.20 - Parent Registration Rights Agreement
8.9 - Assignment Agreement
</TABLE>
ii
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is made and
entered into as of the 9th day of July 1996, by and between CLEAR CHANNEL
COMMUNICATIONS, INC., a Texas corporation ("PARENT"), and TICHENOR MEDIA
SYSTEM, INC., a Texas corporation ("TICHENOR").
Recitals
A. Parent is in the process of acquiring a majority interest in
Heftel Broadcasting Corporation ("HEFTEL"), a Delaware corporation, by way of a
concurrent stock purchase and tender offer (the "HEFTEL ACQUISITION"), subject
to the satisfaction of all terms and conditions relating to such acquisition.
B. The board of directors of each of Parent and Tichenor has
determined that it is in the best interests of their respective shareholders to
approve the merger of Heftel and Tichenor by means of the merger of a
to-be-named wholly owned subsidiary of Heftel, to be formed under the laws of
the State of Texas immediately following the completion of the Heftel
Acquisition ("HEFTEL SUB"), with and into Tichenor upon the terms and subject
to the conditions set forth in this Agreement.
C. To facilitate such merger, upon completion of the Heftel
Acquisition, Parent agrees to propose to Heftel and Heftel Sub that such
entities agree to be bound by the terms of this Agreement as they relate to
such entities and use its reasonable efforts to cause the execution of the
documentation reflecting such agreement to be bound hereby.
D. For federal income tax purposes, it is intended that such
merger qualify as a "reorganization" within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended.
E. Parent and Tichenor desire to make certain representations,
warranties, covenants and agreements in connection with such merger and also to
prescribe various conditions to such merger.
NOW, THEREFORE, for and in consideration of the recitals and the
mutual covenants and agreements set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
<PAGE> 5
Statement of Agreement
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, each of the
following terms has the meaning given in this Section 1.1 or in the Sections
referred to below:
"AFFILIATE" means, with respect to any Person, each other Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with such Person.
"AGREEMENT" means this Agreement and Plan of Merger, as amended,
supplemented or modified from time to time.
"ALIEN" means (a) a person who is a citizen of a country other than
the United States; (b) any entity organized under the laws of a government
other than the government of the United States or any state, territory or
possession of the United States; (c) a government other than the government of
the United States or of any state, territory or possession of the United
States; and (d) a representative of, or an individual or entity controlled by,
any of the foregoing.
"ARTICLES OF MERGER" means the articles of merger, prepared and
executed in accordance with the applicable provisions of the TBCA, filed with
the Secretary of State of Texas to reflect the consummation of the Merger.
"ASSIGNMENT AGREEMENT" has the meaning specified in Section 8.9(b).
"BANK CREDIT AGREEMENT" means that certain Second Amended and Restated
Credit Agreement, dated as of August 9, 1994, as amended through the date
hereof, among Tichenor and the other parties thereto.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any successor statutes and any
regulations promulgated thereunder.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System List.
"CLOSING" means the closing of the Merger and the consummation of the
other transactions contemplated by this Agreement.
"CLOSING DATE" means the date on which the Closing occurs, which date
shall be the business day immediately following the day on which all conditions
precedent have been fully satisfied or waived (or such later date as is agreed
upon by the parties).
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<PAGE> 6
"CLOSING MATERIAL ADVERSE EFFECT" means (a) when used with respect to
Tichenor, (i) the loss of any Tichenor FCC License or the inability of Tichenor
to operate any Tichenor Station due to the failure to obtain the consent of any
person other than the FCC or any other Governmental Authority (in either case
for which reinstatement or waiver within 90 days is not reasonably likely)
accounting for, in the aggregate, 10% of Tichenor's consolidated gross revenue
stated on Tichenor's consolidated income statement for the prior quarter, (ii)
the failure of Tichenor to either (A) refinance the outstanding indebtedness
under the Bank Credit Agreement or any successor credit facility at or prior to
the Effective Time or (B) obtain appropriate waivers so that, in either case,
no defaults will exist thereunder as of the Effective Time arising out of the
transactions contemplated by this Agreement or (iii) any other event,
liability, obligation, judgment or consequence having an adverse economic
impact on Tichenor and its Affiliates, taken as a whole, in excess of $20
million; and (b) when used with respect to Heftel, (i) the loss of any Heftel
FCC License or the inability of Heftel to operate any Heftel Station due to the
failure to obtain the consent of any person other than the FCC or any other
Governmental Authority (in either case for which reinstatement or waiver within
90 days is not reasonably likely) accounting for, in the aggregate, 10% of
Heftel's consolidated gross revenue stated on Heftel's consolidated income
statement for the prior quarter, (ii) the failure of Heftel to either (A)
refinance the outstanding indebtedness under the Heftel Credit Agreement or any
successor credit facility at or prior to the Effective Time or (B) obtain
appropriate waivers so that, in either case, no defaults will exist thereunder
as of the Effective Time arising out of the Heftel Acquisition or the Merger or
(iii) any other event, liability, obligation, judgment or consequence having an
adverse economic impact on Heftel and its Affiliates, taken as a whole, in
excess of $40 million. With respect to clauses (a) and (b) above, a Closing
Material Adverse Effect shall not be deemed to have occurred based upon any
change in the financial condition of Tichenor or Heftel, as the case may be,
resulting from (a) increased competition, (b) events or conditions that affect
the radio broadcasting industry generally and affect all other similarly
situated companies in the radio broadcasting industry or (c) general economic
conditions.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CONVERSION NUMBER" means 7.8261.
"COSTS" has the meaning specified in Section 5.19(b).
"DGCL" means the Delaware General Corporation Law.
"DISCLOSURE LETTER" means the DISCLOSURE LETTER attached hereto and
any documents listed on such DISCLOSURE LETTER and expressly incorporated
therein by reference.
"DISSENTING SHAREHOLDER(S)" means holder(s) of Tichenor Common Stock,
Tichenor Junior Preferred and Tichenor Senior Preferred who have validly
perfected dissenters' rights under Article 5.12 of the TBCA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
3
<PAGE> 7
"EFFECTIVE TIME" has the meaning specified in Section 2.7.
"EMPLOYMENT AGREEMENT" has the meaning specified in Section 5.16.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, code, ordinance, rule, regulation, policy, guideline, permit, consent,
approval, license, judgment, order, writ, decree, common law, injunction or
other authorization in effect on the date hereof or at a previous time
applicable to Tichenor's operations relating to (a) emissions, discharges,
releases or threatened releases of Hazardous Materials into the natural
environment, including into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, groundwater, publicly-owned
treatment works, septic systems or land; (b) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or shipment of
Hazardous Materials; (c) occupational health and safety; or (d) otherwise
relating to the pollution of the environment, solid waste handling treatment or
disposal, or operation or reclamation of oil and gas operations or mines.
"EXCHANGE AGENT" means the transfer agent for shares of Heftel Common
Stock or such other entity selected by Heftel and consented to by Tichenor,
which consent shall not be unreasonably withheld.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE FUND" has the meaning specified in Section 2.5(a).
"FCC" means the Federal Communications Commission.
"GAAP" means generally accepted accounting principles, as recognized
by the U.S. Financial Accounting Standards Board (or any generally recognized
successor).
"GOVERNMENTAL ACTION" means any authorization, application, approval,
consent, exemption, filing, license, notice, registration, permit or other
requirement of, to or with any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case that has jurisdiction over any of the Tichenor
Companies, Parent, the Heftel Companies or any of their respective properties
or assets, including the FCC.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"HAZARDOUS MATERIAL" means (a) any "hazardous substance," as defined
by CERCLA; (b) any "hazardous waste" or "solid waste," in either case as
defined by the Resource Conservation and Recovery Act, as amended; (c) any
solid, hazardous, dangerous or toxic chemical, material, waste or substance,
within the meaning of and regulated by any Environmental Law; (d) any
radioactive material, including any naturally occurring radioactive
4
<PAGE> 8
material, and any source, special or byproduct material as defined in 42 U.S.C.
2011 et seq. and any amendments or authorizations thereof; (e) any
asbestos-containing materials in any form or condition; (f) any polychlorinated
biphenyls in any form or condition; or (g) petroleum, petroleum hydrocarbons,
or any fraction or byproducts thereof.
"HEFTEL" means Heftel Broadcasting Corporation, a Delaware
corporation.
"HEFTEL CERTIFICATE" means a certificate representing shares of Heftel
Common Stock.
"HEFTEL COMMON STOCK" means the Class A Common Stock, par value $.001
per share, of Heftel.
"HEFTEL COMPANIES" means Heftel and the Heftel Subsidiaries.
"HEFTEL CREDIT AGREEMENT" means that certain Credit Agreement, dated
August 19, 1994, among Heftel, its subsidiaries and The Chase Manhattan Bank
(National Association), on its own behalf and as agent.
"HEFTEL DESIGNEES" has the meaning specified in Section 5.22.
"HEFTEL DISCLOSURE DOCUMENTS" means Heftel's Annual Report 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, registration statements and other statements and
documents filed by Heftel with the SEC from July 27, 1994 to the date of this
Agreement.
"HEFTEL FCC LICENSES" has the meaning specified in Section 5.3(b).
"HEFTEL MATERIAL AGREEMENT(S)" means (a) any written or oral
agreement, contract, commitment or understanding to which Heftel is a party, by
which Heftel is directly or indirectly bound, or to which any asset of Heftel
may be subject, involving total value or consideration in excess of $600,000
and/or, (b) the Heftel Credit Agreement, as amended and supplemented as of the
date hereof.
"HEFTEL MEETING" means the meeting of the stockholders of Heftel
called for the purpose of voting on the Heftel Proposal.
"HEFTEL PROPOSAL" means, collectively, (a) the proposal to amend and
restate the Restated Certificate of Incorporation of Heftel to read as set
forth in EXHIBIT 1.1(A) hereto, (b) the proposal to approve the issuance of
Heftel Common Stock and New Heftel Class B Common Stock in connection with the
Merger and (c) such other proposals as may be necessary or desirable, including
without limitation, such proposals to approve further amendments of Heftel's
certificate of incorporation to facilitate the transactions contemplated in
this Agreement, which proposals are to be presented to the stockholders of
Heftel in the Proxy Statement/Prospectus.
"HEFTEL STATION" has the meaning specified in Section 5.3(b).
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<PAGE> 9
"HEFTEL SUB" means a to-be-named wholly owned subsidiary of Heftel to
be formed under the laws of the State of Texas.
"HEFTEL SUB COMMON STOCK" means the common stock, par value $.001 per
share, of Heftel Sub.
"HEFTEL SUBSIDIARIES" means Broadcast Investment, Inc., a Florida
corporation; HBC Florida, Inc., a Delaware corporation; HBC Texas, Inc., a
Delaware corporation; KESS-AM License Corp., a Delaware corporation; KICI-AM
License Corp., a Delaware corporation; KLVE-FM License Corp., a Delaware
corporation; KMRT-AM License Corp., a Delaware corporation; KTNQ/KLVE, Inc., a
California corporation; KTNQ-AM License Corp., a Delaware corporation; Mi Casa
Publications, Inc., a California corporation; Radio WADO, Inc., a New Jersey
corporation; Rodriguez Broadcasting, Inc., a Texas corporation;
Rodriguez-Heftel-Texas, Inc., a Texas corporation; Spanish Coast to Coast,
Ltd., a Delaware corporation; Spanish Radio Network, a Florida general
partnership; SRN Texas, Inc., a Texas corporation; The Tower Company, Inc., a
Hawaii corporation; Viva Acquisition Corporation, a Florida corporation; Viva
Broadcasting Corporation, a Florida corporation; WADO-AM License Corp., a
Delaware corporation; WGLI-AM License Corp., a Delaware corporation; WQBA-AM
License Corp., a Delaware corporation; WQBA-FM License Corp., a Delaware
corporation; Heftel Broadcasting Texas, L.P.; Heftel GP Texas, Inc.; HBC
Broadcasting Texas, Inc.; HBC Chicago, Inc.; HBC-Las Vegas, Inc.; HBC New York,
Inc.; KCYT-FM License Corp.; KECS-FM License Corp.; KESS-AM License Corp.;
KESS-TV License Corp.; KHCK-FM License Corp.; KICI- FM License Corp; KLSQ-AM
License Corp.; La Oferta, Inc.; License Corp. No. 1; License Corp. No. 2; Viva
America Media Group; WLXX-AM License Corp.; and WPAT-AM License Corp.
"INDEMNIFIED PARTIES" has the meaning specified in Section 5.19(c).
"INDEMNIFYING PARTY" has the meaning specified in Section 5.19(d).
"INDEMNITY AGREEMENT" has the meaning specified in Section 5.18.
"LIEN" means any lien, mortgage, security interest, pledge, deposit,
restriction, burden, encumbrance, rights of a vendor under any title retention
or conditional sale agreement, or lease or other arrangement substantially
equivalent thereto.
"MAJOR TICHENOR SHAREHOLDER" means, collectively, McHenry T. Tichenor,
Sr., McHenry T. Tichenor, Jr., McHenry T. Tichenor, Jr., as Custodian for David
T. Tichenor, Warren W. Tichenor, William E. Tichenor, Jean T. Russell, David
Lykes, Jeffrey T. Hinson, Ricardo A. del Castillo, Alta Subordinated Debt
Partners III, L.P., Prime II Management, L.P. and PrimeComm, L.P.
"MATERIAL ADVERSE EFFECT" means (a) when used with respect to
Tichenor, a result or consequence that would materially adversely affect the
condition (financial or otherwise), results of operations or business of the
Tichenor Companies (taken as a whole) or the aggregate value of their assets,
would materially impair the ability of the Tichenor Companies (taken as a
whole) to own, hold, develop and operate their assets, or would impair
Tichenor's ability to perform its obligations hereunder or consummate the
transactions contemplated hereby; and (b) when used
6
<PAGE> 10
with respect to Heftel, a result or consequence that would materially adversely
affect the condition (financial or otherwise), results of operations or
business of Heftel and its subsidiaries (taken as a whole) or the aggregate
value of their assets, would materially impair the ability of the Heftel
Companies (taken as a whole) to own, hold and operate their assets, or would
impair Heftel's or Heftel Sub's ability to perform its respective obligations
hereunder or consummate the transactions contemplated hereby.
"MERGER" has the meaning specified in Section 2.1.
"MERGER CONSIDERATION" means the product of the Conversion Number and
the Share Price.
"MERGER INDEMNIFIED PARTIES" has the meaning specified in Section
5.19(c).
"NASDAQ" means the National Market System of The Nasdaq Stock Market,
Inc.
"NEW HEFTEL CLASS B COMMON STOCK" means the Class B Common Stock, par
value $.001 per share, of Heftel having the terms, rights and privileges set
forth in EXHIBIT 1.1(A) hereto.
"OPTION TRANSACTION" shall mean (i) the transfer by Parent to Heftel
on the Closing Date of such number of shares of New Heftel Class B Common Stock
as is required to bring the percentage ownership of shares of outstanding
capital stock in Heftel held by Parent to 30% of the total outstanding shares
of capital stock in Heftel immediately following such transfer for $0.01 per
share and (ii) the concurrent execution and delivery of an Option Agreement in
substantially the form attached hereto as EXHIBIT 1.1(B), pursuant to which
Heftel grants to Parent an option immediately exercisable into such number of
shares of New Heftel Class B Common Stock so transferred.
"PARENT" means Clear Channel Communications, Inc., a Texas
corporation.
"PARENT REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
Section 5.20.
"PARENT REPRESENTATIVE" means any director, officer, employee, agent,
advisor (including legal, accounting and financial advisors), Affiliate
(including Heftel and Heftel Sub) or other representative of Parent or its
subsidiaries.
"PERMITTED ENCUMBRANCES" means (a) with respect to Tichenor, (i) Liens
for Taxes, assessments or other governmental charges or levies if the same
shall not at the particular time in question be due and delinquent or (if
foreclosure, distraint, sale or other similar proceedings shall not have been
commenced or, if commenced, shall have been stayed) are being contested in good
faith by appropriate proceedings and if any of the Tichenor Companies shall
have set aside on its books such reserves (segregated to the extent required by
sound accounting practices) as may be required by or consistent with GAAP and,
whether reserves are set aside or not, are listed on the DISCLOSURE LETTER;
(ii) Liens of carriers, warehousemen, mechanics, laborers, materialmen,
landlords, vendors, workmen and operators arising by operation of law in the
ordinary course of business or by a written agreement existing as of the date
hereof and
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<PAGE> 11
necessary or incident to the proper operation of such Person's business,
properties and related facilities and assets for sums not yet due or being
contested in good faith by appropriate proceedings, if any of the Tichenor
Companies shall have set aside on its books such reserves (segregated to the
extent required by sound accounting practices) as may be required by or
consistent with GAAP and, whether reserves are set aside or not, are listed on
the DISCLOSURE LETTER; (iii) Liens incurred in the ordinary course of business
in connection with worker's compensation, unemployment insurance and other
social security legislation (other than ERISA) which would not, individually or
in the aggregate, result in a Material Adverse Effect on the Tichenor
Companies; (iv) Liens incurred in the ordinary course of business to secure the
performance of bids, tenders, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance and repayment bonds and other obligations
of a like nature; (v) Liens, easements, rights-of-way, restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations and other
similar encumbrances incurred in the ordinary course of business or existing on
property and not materially impairing the value of the assets of any of
Tichenor Companies or interfering with the ordinary conduct of the business of
any of the Tichenor Companies or rights to any of their assets; (vi) Liens
arising under or created pursuant to the Bank Credit Agreement or the Term
Loan; and (vii) Liens described on the DISCLOSURE LETTER and (b) with respect
to Heftel, (i) Liens for Taxes, assessments or other governmental charges or
levies if the same shall not at the particular time in question be due and
delinquent or (if foreclosure, distraint, sale or other similar proceedings
shall not have been commenced or, if commenced, shall have been stayed) are
being contested in good faith by appropriate proceedings and if any of the
Heftel Companies shall have set aside on its books such reserves (segregated to
the extent required by sound accounting practices) as may be required by or
consistent with GAAP and, whether reserves are set aside or not, are listed on
the Heftel Disclosure Documents; (ii) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen and operators
arising by operation of law in the ordinary course of business or by a written
agreement existing as of the date hereof and necessary or incident to the
proper operation of such Person's business, properties and related facilities
and assets for sums not yet due or being contested in good faith by appropriate
proceedings, if any of the Heftel Companies shall have set aside on its books
such reserves (segregated to the extent required by sound accounting practices)
as may be required by or consistent with GAAP and, whether reserves are set
aside or not, are listed on the Heftel Disclosure Documents; (iii) Liens
incurred in the ordinary course of business in connection with worker's
compensation, unemployment insurance and other social security legislation
(other than ERISA) which would not, individually or in the aggregate, result in
a Material Adverse Effect on the Heftel Companies; (iv) Liens incurred in the
ordinary course of business to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
and repayment bonds and other obligations of a like nature; (v) Liens,
easements, rights-of-way, restrictions, servitudes, permits, conditions,
covenants, exceptions, reservations and other similar encumbrances incurred in
the ordinary course of business or existing on property and not materially
impairing the value of the assets of any of Heftel Companies or interfering
with the ordinary conduct of the business of any of the Heftel Companies or
rights to any of their assets; (vi) Liens arising under or created pursuant to
the Heftel Credit Agreement; and (vii) Liens described on the Heftel Disclosure
Documents.
"PERSON" means any natural person, corporation, company, limited or
general partnership, joint stock company, joint venture, association, limited
liability company, trust, bank, trust
8
<PAGE> 12
company, land trust, business trust or other entity or organization, whether or
not a Governmental Authority.
"PROXY STATEMENT/PROSPECTUS" means a proxy statement of Heftel in
definitive form relating to the Heftel Meeting, which proxy statement will be
included as a prospectus in the Registration Statement.
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section
5.15.
"REGISTRATION STATEMENT" means the Registration Statement to be filed
with the SEC by Heftel in connection with the issuance of Heftel Common Stock
and New Heftel Class B Common Stock pursuant to the Merger.
"RESPONSIBLE OFFICER" means, with respect to any Tichenor Company,
McHenry T. Tichenor, Jr. or Jeffrey T. Hinson, and with respect to any other
corporation, the Chief Executive Officer, President or any Vice President of
such corporation.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARE PRICE" means the per share closing sales price of the Heftel
Common Stock on Nasdaq (as reported by The Wall Street Journal, or if not so
reported, by another authoritative source) on the trading day immediately
preceding the Closing Date.
"STOCKHOLDERS AGREEMENT" has the meaning specified in Section 5.17.
"SURVIVING CORPORATION" has the meaning specified in Section 2.2.
"TBCA" means the Texas Business Corporation Act.
"TAXES" means taxes of any kind, levies or other like assessments,
customs, duties, imposts, charges or fees, including income, gross receipts, ad
valorem, value added, excise, real or personal property, asset, sales, use,
license, payroll, transaction, capital, net worth and franchise taxes,
estimated taxes, withholding, employment, social security, workers
compensation, utility, severance, production, unemployment compensation,
occupation, premium, windfall profits, transfer and gains taxes or other
governmental taxes imposed or payable to the United States or any state, local
or foreign governmental subdivision or agency thereof, and in each instance
such term shall include any interest, penalties or additions to tax
attributable to any such Tax, including penalties for the failure to file any
federal, state, local or foreign returns, declarations, reports, estimates,
information returns or statements required to be filed by a Person with respect
to any Taxes.
"TENDER OFFER AGREEMENT" means the Tender Offer Agreement, dated June
1, 1996, between Parent and Heftel relating to the Heftel Acquisition, as
amended through the date hereof.
"TENDER OFFER INDEMNIFIED PARTIES" has the meaning specified in
Section 5.19(b).
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<PAGE> 13
"TERM LOAN" means that certain Loan Agreement, dated as of the date
hereof, between TMS Assets California, Inc., a Delaware corporation, and
Parent, as in effect on the date hereof.
"THIRD-PARTY CONSENT" means the consent or approval of any Person
other than Tichenor, Parent or any Governmental Authority.
"TICHENOR" means Tichenor Media System, Inc., a Texas corporation.
"TICHENOR CERTIFICATE" means a certificate representing shares of
Tichenor Common Stock, shares of Tichenor Junior Preferred or shares of
Tichenor Senior Preferred, or documents or agreements representing the Tichenor
Warrant.
"TICHENOR COMMON STOCK" means the common stock, par value $1.00 per
share, of Tichenor.
"TICHENOR COMPANIES" means Tichenor and the Tichenor Subsidiaries.
"TICHENOR FCC LICENSES" has the meaning specified in Section 5.2(b).
"TICHENOR FINANCIAL STATEMENTS" means the audited and unaudited
consolidated financial statements of Tichenor and its subsidiaries (including
the related notes with respect to such audited financial statements) for the
years ended December 31, 1994 and 1995, and for the five months ended May 31,
1996.
"TICHENOR JUNIOR PREFERRED" means the Junior Preferred Stock, par
value $10 per share, of Tichenor.
"TICHENOR MATERIAL AGREEMENT(S)" means (a) any written or oral
agreement, contract, commitment or understanding to which any of the Tichenor
Companies is a party, by which any of the Tichenor Companies is directly or
indirectly bound, or to which any asset of any of the Tichenor Companies may be
subject, involving total value or consideration in excess of $400,000, (b) the
Bank Credit Agreement and/or (c) the Term Loan, in each case as amended and
supplemented as of the date hereof.
"TICHENOR REPRESENTATIVE" means any director, officer, employee,
agent, advisor (including legal, accounting and financial advisors), Affiliate
or other representative of any of the Tichenor Companies.
"TICHENOR SENIOR PREFERRED" means the 14% Senior Redeemable Cumulative
Preferred Stock, par value $1,000 per share, of Tichenor.
"TICHENOR STATION" has the meaning specified in Section 5.2(b).
"TICHENOR SUBSIDIARIES" means WADO Radio, Inc., a Texas corporation;
Tichenor License Corporation, a Texas corporation; TC Television, Inc., a Texas
corporation; Tichenor Assets California, Inc., a Delaware corporation; Tichenor
License California, Inc., a Delaware
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corporation; Tall Tower Partnership, a Texas general partnership; and KDOS
Limited Partnership, a Texas limited partnership.
"TICHENOR WARRANT" means that certain Warrant Agreement, dated June
15, 1993, entitling Alta Subordinated Debt Partners III, L.P. to purchase such
number of shares of Tichenor Common Stock as shall equal 4% of the total number
of shares of Tichenor Common Stock of all classes outstanding on a fully
diluted basis after giving effect to the exercise of all other warrants,
options and rights to acquire any shares of Tichenor Common Stock and the
conversion of any convertible securities issued by Tichenor (including without
limitation the Tichenor Junior Preferred).
1.2 REFERENCES AND TITLES. All references in this Agreement to
Exhibits, Schedules, Articles, Sections, subsections and other subdivisions
refer to the corresponding Exhibits, Schedules, Articles, Sections, subsections
and other subdivisions of or to this Agreement unless expressly provided
otherwise. Titles appearing at the beginning of any Articles, Sections,
subsections or other subdivisions of this Agreement are for convenience only,
do not constitute any part of this Agreement, and shall be disregarded in
construing the language hereof. The words "THIS AGREEMENT," "HEREIN,"
"HEREBY," "HEREUNDER" and "HEREOF," and words of similar import, refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The words "THIS ARTICLE," "THIS SECTION" and "THIS SUBSECTION," and
words of similar import, refer only to the Article, Section or subsection
hereof in which such words occur. The word "OR" is not exclusive, and the word
"INCLUDING" (in its various forms) means "INCLUDING WITHOUT LIMITATION."
Pronouns in masculine, feminine or neuter genders shall be construed to state
and include any other gender, and words, terms and titles (including terms
defined herein) in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
As used in the representations and warranties contained in this
Agreement, the phrase "TO THE KNOWLEDGE" of the representing party shall mean
that Responsible Officers of such representing party, individually or
collectively, either (a) know that the matter being represented and warranted
is true and accurate or (b) have no reason, after reasonable inquiry, to
believe that the matter being represented and warranted is not true and
accurate.
ARTICLE 2
THE MERGER
2.1 THE MERGER. Subject to the terms and conditions set forth in
this Agreement and assuming the consummation of the Assignment Agreement
pursuant to Section 8.9, at the Effective Time, Heftel Sub shall be merged with
and into Tichenor in accordance with the provisions of this Agreement. Such
merger is referred to herein as the "MERGER."
2.2 EFFECT OF THE MERGER. Upon the effectiveness of the Merger,
the separate existence of Heftel Sub shall cease and Tichenor, as the surviving
corporation in the Merger (the "SURVIVING CORPORATION"), shall continue its
corporate existence under the laws of the State of Texas. The Merger shall
have the effects specified in this Agreement and the TBCA.
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<PAGE> 15
2.3 GOVERNING INSTRUMENTS, DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION.
(a) The articles of incorporation of Tichenor, as in
effect immediately prior to the Effective Time, shall be the articles of
incorporation of the Surviving Corporation until duly amended in accordance
with its terms and applicable law.
(b) The bylaws of Tichenor, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving Corporation
until duly amended in accordance with their terms and applicable law.
(c) The directors and officers of the Surviving
Corporation from the Effective Time until their respective successors have been
duly elected or appointed in accordance with the articles of incorporation and
bylaws of the Surviving Corporation and applicable law shall be the directors
and officers of Tichenor.
2.4 EFFECT ON SECURITIES.
(a) HEFTEL SUB COMMON STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of any holder thereof,
each share of Heftel Sub Common Stock outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid share of
Tichenor Common Stock.
(b) TICHENOR SECURITIES.
(i) TICHENOR COMMON STOCK. At the Effective
Time, by virtue of the Merger and without any action on the part of
any holder thereof (but subject to the provisions of Section 2.5(e)),
each share of Tichenor Common Stock that is issued and outstanding
immediately prior to the Effective Time (other than shares of Tichenor
Common Stock held by Dissenting Shareholders and Tichenor Common Stock
held by Parent or any Affiliate of Parent) shall be converted into the
right to receive shares of validly issued, fully paid and
nonassessable Heftel Common Stock, with each such share of Tichenor
Common Stock being converted into the number of shares of Heftel
Common Stock equal to the Conversion Number. Each share of Tichenor
Common Stock, when so converted, shall automatically be cancelled and
retired, shall cease to exist and shall no longer be outstanding; and
the holder of any certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the shares of Heftel Common Stock to be issued in exchange therefor
(along with any cash in lieu of fractional shares of Heftel Common
Stock as provided in Section 2.5(e) and any unpaid dividends and
distributions with respect to such shares of Heftel Common Stock as
provided in Section 2.5(c)), without interest, upon the surrender of
such certificate in accordance with Section 2.5.
(ii) TICHENOR SENIOR PREFERRED. At the Effective
Time, by virtue of the Merger and without any action on the part of
any holder thereof, each share of Tichenor Senior Preferred (other
than shares of Tichenor Senior Preferred held by Dissenting
Shareholders) that is issued and outstanding shall be converted into
the right to receive cash in the amount of $1,000 per share plus all
accrued and unpaid dividends
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through December 31, 1995. Each share of Tichenor Senior Preferred,
when so converted, shall automatically be cancelled and retired, shall
cease to exist and shall no longer be outstanding; and the holder of
any certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the cash to
be paid in exchange therefor, without interest, upon the surrender of
such certificate in accordance with Section 2.5.
(iii) TICHENOR JUNIOR PREFERRED. At the Effective
Time, by virtue of the Merger and without any action on the part of
any holder thereof, each share of Tichenor Junior Preferred (other
than shares of Tichenor Junior Preferred held by Dissenting
Shareholders) that is issued and outstanding prior to the Effective
Time shall be converted into the right to receive shares of validly
issued, fully paid and nonassessable Heftel Common Stock, with each
such share being converted into 4.3478 shares of Heftel Common Stock.
Each share of Tichenor Junior Preferred, when so converted, shall
automatically be cancelled and retired, shall cease to exist and shall
no longer be outstanding; and the holder of any certificate
representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the shares of Heftel
Common Stock to be issued in exchange therefor (along with any cash in
lieu of fractional shares of Heftel Common Stock as provided in
Section 2.5(e) and any unpaid dividends and distributions with respect
to such shares of Heftel Common Stock as provided in Section 2.5(c)),
without interest, upon the surrender of such certificate in accordance
with Section 2.5.
(iv) TICHENOR TREASURY STOCK. At the Effective
Time, by virtue of the Merger, all shares of Tichenor Common Stock and
Tichenor Junior Preferred that are issued and held as treasury stock
shall be cancelled and retired and shall cease to exist, and no shares
of Heftel Common Stock or other consideration shall be paid or payable
in exchange therefor.
(v) TICHENOR COMMON STOCK HELD BY PARENT. At the
Effective Time, by virtue of the Merger and without any action on the
part of any holder thereof (but subject to the provisions of Section
2.5(e)), each share of Tichenor Common Stock that is issued and
outstanding immediately prior to the Effective Time and held by Parent
or any Affiliate of Parent shall be converted into the right to
receive shares of validly issued, fully paid and nonassessable New
Heftel Class B Common Stock, with each such share of Tichenor Common
Stock being converted into the number of shares of New Heftel Class B
Common Stock equal to the Conversion Number. Each share of Tichenor
Common Stock, when so converted, shall automatically be cancelled and
retired, shall cease to exist and shall no longer be outstanding; and
the holder of any certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the shares of New Heftel Class B Common Stock to be issued in exchange
therefor (along with any cash in lieu of fractional shares of New
Heftel Class B Common Stock as provided in Section 2.5(e) and any
unpaid dividends and distributions with respect to such shares of New
Heftel Class B Common Stock as provided in Section 2.5(c)), without
interest, upon the surrender of such certificate in accordance with
Section 2.5.
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<PAGE> 17
(vi) TICHENOR WARRANT. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder
thereof, the Tichenor Warrant, if outstanding as of the Effective
Time, shall be converted into the right to receive 180,000 shares of
validly issued, fully paid and nonassessable Heftel Common Stock. The
Tichenor Warrant, when so converted, shall automatically be cancelled
and retired, shall cease to exist and shall no longer be outstanding;
and the holder of the Tichenor Warrant shall cease to have any rights
with respect thereto, except the right to receive the shares of Heftel
Common Stock to be issued in exchange therefor and any unpaid
dividends and distributions with respect to such shares of Heftel
Common Stock as provided in Section 2.5(c), without interest, upon the
surrender of such warrant in accordance with Section 2.5.
(vii) NO ADDITIONAL RIGHTS. Except as provided in
this Section 2.4(b) or as otherwise agreed to by the parties, (A) the
provisions of any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital
stock of the Tichenor Companies shall become null and void, and (B)
the Tichenor Companies shall use all reasonable efforts to ensure
that, following the Effective Time, no holder of options or rights or
any participant in any plan, program or arrangement shall have any
right thereunder to acquire any equity securities of the Tichenor
Companies, Parent, Heftel, Heftel Sub or any direct or indirect
subsidiary thereof.
(viii) SHARES OF DISSENTING SHAREHOLDERS. Any
issued and outstanding shares of Tichenor Common Stock, Tichenor
Senior Preferred or Tichenor Junior Preferred held by a Dissenting
Shareholder shall be converted into the right to receive such
consideration as may be determined to be due to such Dissenting
Shareholder pursuant to the TBCA; provided, however, shares of
Tichenor Common Stock, Tichenor Senior Preferred or Tichenor Junior
Preferred outstanding at the Effective Time and held by a Dissenting
Shareholder who shall, after the Effective Time, withdraw his demand
for payment or lose his dissenters' right as provided in the TBCA,
shall be deemed to be converted, as of the Effective Time, into the
right to receive the shares of Heftel Common Stock or cash specified
in Section 2.4(b)(i), (ii) and (iii), respectively, in accordance with
the procedures specified in Section 2.5(b). Tichenor shall give
Parent (or, if after consummation of the Assignment Agreement, Heftel)
(A) prompt notice of any written demands for such payment, withdrawals
of demands for such payment and any other instruments served pursuant
to the TBCA received by Tichenor, and (B) the opportunity to direct
all negotiations and proceedings with respect to demands for such
payment under the TBCA. Tichenor will not voluntarily make any
payment with respect to any demands for dissenters' rights and will
not, except with the prior written consent of Parent (or, if after
consummation of the Assignment Agreement, Heftel), settle or offer to
settle any such demands.
(ix) HEFTEL COMMON STOCK HELD BY PARENT. At the
Effective Time, by virtue of the Merger and without any action on the
part of Parent or any Affiliate of Parent (but subject to the
provisions of Section 2.5(e)), each share of Heftel Common Stock that
is issued and outstanding immediately prior to the Effective Time and
held by Parent or any Affiliate of Parent shall be converted into the
right to receive one (1) share of validly issued, fully paid and
nonassessable New Heftel Class B Common Stock. Each
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<PAGE> 18
share of Heftel Common Stock, when so converted, shall automatically
be cancelled and retired, shall cease to exist and shall no longer be
outstanding; and the holder of any certificate representing any such
shares shall cease to have any rights with respect thereto, except the
right to receive the shares of New Heftel Class B Common Stock to be
issued in exchange therefor (along with any unpaid dividends and
distributions with respect to such shares of New Heftel Class B Common
Stock as provided in Section 2.5(c)), without interest, upon the
surrender of such certificate in accordance with Section 2.5.
2.5 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE FUND. At or prior to the Effective Time,
Heftel shall deposit with the Exchange Agent: (i) for the benefit of the
holders of (A) shares of Tichenor Common Stock (other than Parent and
Affiliates of Parent), (B) shares of Tichenor Junior Preferred and (C) the
Tichenor Warrant, if outstanding as of the Effective Time, and for exchange in
accordance with this Agreement, certificates representing the shares of Heftel
Common Stock to be issued in exchange for such Tichenor securities pursuant to
Section 2.4(b)(i), (iii) and (vi), respectively; (ii) for the benefit of the
holders of Tichenor Senior Preferred, cash in the amount of $3,000,000; (iii)
for the benefit of Parent and Affiliates of Parent, certificates representing
shares of New Heftel Class B Common Stock to be issued pursuant to Section
2.4(b)(v) and (ix); and (iv) cash in an amount sufficient to provide for the
payments to be made in lieu of issuing any fractional shares of Heftel Common
Stock or New Heftel Class B Common Stock as provided in Section 2.5(e).
Additionally, subject to the provisions of Section 2.5(f), Heftel shall, if and
when a payment date has occurred with respect to a dividend or distribution
that has been declared subsequent to the Effective Time, deposit with the
Exchange Agent an amount in cash (or property of like kind to that which is the
subject of such dividend or distribution) equal to the dividend or distribution
per share of Heftel Common Stock times the number of shares of Heftel Common
Stock evidenced by Tichenor Certificates theretofore representing Tichenor
Common Stock, Tichenor Junior Preferred and the Tichenor Warrant that have not
theretofore been surrendered for exchange in accordance with this Section 2.5.
The cash to be paid in conversion of the Tichenor Senior Preferred, such shares
of Heftel Common Stock and New Heftel Class B Common Stock, together with any
dividends or distributions with respect thereto (as provided in Section
2.5(c)), are referred to herein as the "EXCHANGE FUND." The Exchange Agent,
pursuant to irrevocable instructions consistent with the terms of this
Agreement, shall deliver the Heftel Common Stock to be issued pursuant to
Section 2.4(b)(i), (iii) and (vi), respectively, the New Heftel Class B Common
Stock to be issued pursuant to Section 2.4(b)(v) and (ix), the cash to be paid
pursuant to Section 2.4(b)(ii), and cash in an amount sufficient to provide for
the payments to be made in lieu of issuing any fractional shares of Heftel
Common Stock or New Heftel Class B Common Stock as provided in Section 2.5(e)
out of the Exchange Fund, and the Exchange Fund shall not be used for any other
purpose whatsoever. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the Heftel Common Stock or the
New Heftel Class B Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of Persons entitled thereto.
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<PAGE> 19
(b) EXCHANGE PROCEDURES.
(i) As soon as reasonably practicable after the
Effective Time, Heftel shall cause the Exchange Agent to mail to each
holder of record of a Tichenor Certificate that, immediately prior to
the Effective Time, represented (A) shares of Tichenor Common Stock,
(B) shares of Tichenor Junior Preferred, (C) the Tichenor Warrant, if
outstanding as of the Effective Time, or (D) Tichenor Senior
Preferred, which was converted pursuant to Section 2.4(b), a letter of
transmittal to be used to effect the exchange of such Tichenor
Certificate, along with instructions for using such letter of
transmittal to effect such exchange. As soon as reasonably
practicable after the Effective Time, Heftel shall cause the Exchange
Agent to mail to Parent and each Affiliate of Parent that holds Heftel
Common Stock that immediately prior to the Effective Time was
converted into the right to receive New Heftel Class B Common Stock
pursuant to Section 2.4(b)(ix), a letter of transmittal to be used to
effect the exchange of such Heftel Common Stock, along with
instructions for using such letter of transmittal to effect such
exchange. The letter of transmittal (or the instructions thereto)
shall specify that delivery of any Tichenor Certificate or Heftel
Common Stock, as applicable, shall be effected, and risk of loss and
title thereto shall pass, only upon delivery of thereof to the
Exchange Agent and shall be in such form and have such other
provisions as Heftel may reasonably specify.
(ii) Upon surrender to the Exchange Agent of a
Tichenor Certificate for cancellation, together with a duly completed
and executed letter of transmittal and any other required documents
(including, in the case of any Person constituting an "affiliate" of
Tichenor for purposes of Rule 145(c) and (d) under the Securities Act,
a written agreement from such Person as described in Section 5.11, if
not theretofore delivered to Heftel), (A) (x) the holder (other than
Parent and Affiliates of Parent) of such Tichenor Certificate (other
than Tichenor Certificates representing Tichenor Senior Preferred)
shall be entitled to receive in exchange therefor a Heftel Certificate
representing the number of whole shares of Heftel Common Stock that
such holder has the right to receive pursuant to Section 2.4(b)(i),
(iii), or (vi), as the case may be, any cash in lieu of fractional
shares of Heftel Common Stock as provided in Section 2.5(e), and any
unpaid dividends and distributions that such holder has the right to
receive pursuant to Section 2.5(c) (after giving effect to any
required withholding of taxes), (y) Parent and Affiliates of Parent
holding a Tichenor Certificate shall be entitled to receive in
exchange therefor a certificate representing the number of whole
shares of New Heftel Class B Common Stock that such holder has the
right to receive pursuant to Section 2.4(b)(i)(v), any cash in lieu of
fractional shares of New Heftel Class B Common Stock as provided in
Section 2.5(e), and any unpaid dividends and distributions that such
holder has the right to receive pursuant to Section 2.5(c) (after
giving effect to any required withholding of taxes), and (z) the
holder of such Tichenor Certificate representing Tichenor Senior
Preferred shall be entitled to receive in exchange therefor cash
pursuant to Section 2.4(b)(ii); and (B) the Tichenor Certificate so
surrendered shall forthwith be cancelled. No interest shall be paid
or accrued on the cash in lieu of fractional shares and unpaid
dividends and distributions, if any, payable to holders of Tichenor
Certificates. Upon surrender to the Exchange Agent by Parent or an
Affiliate of Parent of a certificate representing Heftel Common Stock
for cancellation, together with a duly completed and
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<PAGE> 20
executed letter of transmittal and any other required documents, the
holder of such certificate shall be entitled to receive in exchange
therefor a certificate representing the number of whole shares of New
Heftel Class B Common Stock that such holder has the right to receive
pursuant to Section 2.4(b)(ix), and any unpaid dividends and
distributions that such holder has the right to receive pursuant to
Section 2.5(c) (after giving effect to any required withholding of
taxes) and the certificate so surrendered shall forthwith be
cancelled. No interest shall be paid or accrued on the unpaid
dividends and distributions, if any, payable to holders of the
certificates representing Heftel Common Stock surrendered for
cancellation.
(iii) In the event of a transfer of ownership of
Tichenor Common Stock, Tichenor Junior Preferred or the Tichenor
Warrant, if outstanding as of the Effective Time, that is not
registered in the transfer records of Tichenor, a Heftel Certificate
representing the appropriate number of shares of Heftel Common Stock
(along with any cash in lieu of fractional shares and any unpaid
dividends and distributions that such holder has the right to receive)
may be issued or paid to a transferee if the Tichenor Certificate
representing such Tichenor securities is presented to the Exchange
Agent accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable stock transfer or
similar taxes have been paid.
(iv) Until surrendered as contemplated by this
Section 2.5(b), (A) each Tichenor Certificate (other than Tichenor
Certificates representing Tichenor Senior Preferred and Tichenor
Certificates representing Heftel Common Stock owned by Parent and
Affiliates of Parent) shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender a
Heftel Certificate representing shares of Heftel Common Stock as
provided in Section 2.4(b)(i), (iii) or (vi), as the case may be
(along with any cash in lieu of fractional shares and any unpaid
dividends and distributions), (B) each Tichenor Certificate
representing Tichenor Senior Preferred shall be deemed at any time
after the Effective Time to represent only the right to receive upon
such surrender cash as provided in Section 2.4(b)(ii), (C) each
certificate representing Heftel Common Stock held by Parent and any
Affiliate of Parent shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender a
certificate representing shares of New Heftel Class B Common Stock as
provided in Section 2.4(b)(ix) (along with any unpaid dividends and
distributions), and (D) each Tichenor Certificate held by Parent and
Affiliates of Parent shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender a
certificate representing New Heftel Class B Common Stock as provided
in Section 2.4(b)(v) (along with any cash in lieu of fractional shares
and any unpaid dividends and distributions).
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Heftel Common Stock declared
or made after the Effective Time with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Tichenor Certificate. Subject
to the effect of applicable laws, (i) at the time of the surrender of a
Tichenor Certificate for exchange in accordance with the provisions of this
Section 2.5, there shall be paid to the surrendering holder, without interest,
the amount of dividends or other distributions (having a record date after the
Effective Time but on or prior to surrender and a
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<PAGE> 21
payment date on or prior to surrender) theretofore paid with respect to the
number of whole shares of Heftel Common Stock or New Heftel Class B Common
Stock, as applicable, that such holder is entitled to receive (less the amount
of any withholding taxes that may be required with respect thereto); and (ii)
at the appropriate payment date, there shall be paid to the surrendering
holder, without interest, the amount of dividends or other distributions
(having a record date after the Effective Time but on or prior to surrender and
a payment date subsequent to surrender) payable with respect to the number of
whole shares of Heftel Common Stock or New Heftel Class B Common Stock, as
applicable, that such holder receives (less the amount of any withholding taxes
that may be required with respect thereto). Subject to the effect of
applicable laws, (i) at the time Parent or an Affiliate of Parent surrenders
Heftel Common Stock for exchange in accordance with the provisions of Section
2.4(b)(ix) and this Section 2.5, there shall be paid to the surrendering
holder, without interest, the amount of dividends or other distributions
(having a record date after the Effective Time but on or prior to surrender and
a payment date on or prior to surrender) theretofore paid with respect to the
number of whole shares of New Heftel Class B Common Stock that such holder is
entitled to receive (less the amount of any withholding taxes that may be
required with respect thereto); and (ii) at the appropriate payment date, there
shall be paid to the surrendering holder, without interest, the amount of
dividends or other distributions (having a record date after the Effective Time
but on or prior to surrender and a payment date subsequent to surrender)
payable with respect to the number of whole shares of New Heftel Class B Common
Stock that such holder receives (less the amount of any withholding taxes that
may be required with respect thereto).
(d) NO FURTHER OWNERSHIP RIGHTS IN TICHENOR SECURITIES.
All shares of Heftel Common Stock and New Heftel Class B Common Stock, as
applicable, issued upon the surrender for exchange of (i) shares of Tichenor
Common Stock, (ii) shares of Tichenor Junior Preferred and (iii) the Tichenor
Warrant, if outstanding as of the Effective Time, in accordance with the terms
hereof (including any cash paid pursuant to Section 2.5(c) or (e)) and the cash
paid upon the surrender for exchange of Tichenor Senior Preferred shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such Tichenor securities. After the Effective Time, there shall be no further
registration of transfers on the Surviving Corporation's stock transfer books
or other records of the shares of Tichenor Common Stock, Tichenor Senior
Preferred, Tichenor Junior Preferred or the Tichenor Warrant, in each case that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, a Tichenor Certificate is presented to the Surviving
Corporation for any reason, it shall be cancelled and exchanged as provided in
this Section 2.5.
(e) TREATMENT OF FRACTIONAL SHARES. No Heftel
Certificates or scrip representing fractional shares of Heftel Common Stock or
New Heftel Class B Common Stock, as applicable, shall be issued in the Merger
and, except as provided in this Section 2.5(e), no dividend or other
distribution, stock split or interest shall relate to any such fractional
share, and such fractional share shall not entitle the owner thereof to vote or
to any other rights of a stockholder of Heftel. In lieu of any fractional
share of Heftel Common Stock or New Heftel Class B Common Stock, as applicable,
to which a holder of Tichenor Common Stock, Tichenor Junior Preferred or the
Tichenor Warrant, if outstanding as of the Effective Time, would otherwise be
entitled, such holder, upon surrender of a Tichenor Certificate as described in
this Section, shall be paid an amount in cash (without interest) determined by
multiplying (i) the Share Price by (ii) the fraction of a share of Heftel
Common Stock or New Heftel Class B
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Common Stock to which such holder would otherwise be entitled, in which case
Heftel shall make available to the Exchange Agent, without regard to any other
cash being provided to the Exchange Agent, the amount of cash necessary to make
such payments.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the
Exchange Fund and cash held by the Exchange Agent in accordance with the terms
of this Section 2.5 that remains unclaimed by the former shareholders of
Tichenor for a period of one year following the Effective Time shall be
delivered to Heftel, upon demand. Thereafter, any former securityholders of
Tichenor who have not theretofore complied with the provisions of this Section
2.5 shall look only to Heftel for payment of their claim for Heftel Common
Stock or New Heftel Class B Common Stock, any cash in lieu of fractional shares
of Heftel Common Stock or New Heftel Class B Common Stock and any dividends or
distributions with respect to Heftel Common Stock or New Heftel Class B Common
Stock (all without interest).
(g) NO LIABILITY. Neither Parent, Heftel, Heftel Sub,
Tichenor, the Surviving Corporation, the Exchange Agent nor any other Person
shall be liable to any former holder of Tichenor securities for any amount
properly delivered to any public official pursuant to any applicable abandoned
property, escheat or similar law. Any amounts remaining unclaimed by former
holders of Tichenor Common Stock, Tichenor Junior Preferred, Tichenor Senior
Preferred or the Tichenor Warrant, if outstanding as of the Effective Time, for
a period of three years following the Effective Time (or such earlier date
immediately prior to the time at which such amounts would otherwise escheat to
or become property of any governmental entity) shall, to the extent permitted
by applicable law, become the property of Heftel, free and clear of any claims
or interest of any such holders or their successors, assigns or personal
representatives previously entitled thereto.
(h) LOST, STOLEN, OR DESTROYED TICHENOR CERTIFICATES. If
any Tichenor Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Tichenor
Certificate to be lost, stolen or destroyed and, if required by Heftel, the
posting by such Person of a bond, in such reasonable amount as Heftel may
direct, as indemnity against any claim that may be made against it with respect
to such Tichenor Certificate, the Exchange Agent shall issue in exchange for
such lost, stolen or destroyed Tichenor Certificate the shares of Heftel Common
Stock (along with any cash in lieu of fractional shares pursuant to Section
2.5(e) and any unpaid dividends and distributions pursuant to Section 2.5(c))
or cash (with respect to Tichenor Senior Preferred) deliverable with respect
thereto pursuant to this Agreement.
(i) EXCHANGE AT CLOSING. Notwithstanding the provisions
of Section 2.5(b), each record holder of a Tichenor Certificate who surrenders
such Tichenor Certificate for cancellation to the Surviving Corporation at the
Closing, together with a duly executed letter of transmittal (which shall be
available at the Closing), shall be entitled to receive in exchange therefor
(i) cash in the amount such holder has the right to receive pursuant to Section
2.4(b)(ii), payable in cash or by wire transfer of immediately available funds
on the Closing Date, or (ii) certificates representing Heftel Common Stock in
the amount such holder has the right to receive pursuant to Section 2.4(b)(i),
(iii), (v) or (vi).
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2.6 CLOSING. The Closing shall take place on the Closing Date at
such time and place as is agreed upon by Heftel and Tichenor.
2.7 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective immediately when a Certificate of Merger is issued by the Secretary
of State of Texas or at such time thereafter as is provided in the Articles of
Merger (the "EFFECTIVE TIME"). As soon as practicable after the Closing, the
Articles of Merger shall be filed, and the Effective Time shall occur, on the
Closing Date; provided, however, that the Articles of Merger may be filed prior
to the Closing Date or prior to the Closing so long as it provides for an
effective time that occurs on the Closing Date immediately after the Closing.
2.8 TAKING OF NECESSARY ACTION; FURTHER ACTION. Subject to the
provisions of Section 8.9, each of Parent, Heftel, Heftel Sub and Tichenor
shall use all reasonable efforts to take all such actions as may be necessary
or appropriate in order to effectuate the Merger under the TBCA as promptly as
commercially practicable. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises
of either of Heftel Sub or Tichenor, the officers and directors of the
Surviving Corporation are fully authorized, in the name of the Surviving
Corporation or otherwise to take, and shall take, all such lawful and necessary
action.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TICHENOR
Tichenor hereby represents and warrants to Parent (and upon
consummation of the Assignment Agreement, to Heftel and Heftel Sub), as of the
date hereof, as follows:
3.1 ORGANIZATION. Each of the Tichenor Companies (a) is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of its state of organization, (b) has the requisite
power and authority to own, lease and operate its properties and to conduct its
business as it is presently being conducted, and (c) is duly qualified to do
business as a foreign entity, and is in good standing, in each jurisdiction
where the character of the properties owned or leased by it or the nature of
its activities makes such qualification necessary (except where any failure to
be so qualified as a foreign entity or to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on Tichenor).
Copies of the certificate or articles of incorporation and bylaws, or
partnership agreement of each of the Tichenor Companies have heretofore been
delivered to Parent, and such copies are accurate and complete as of the date
hereof. Tichenor has no corporate or other subsidiaries other than the
Tichenor Subsidiaries.
3.2 AUTHORITY AND ENFORCEABILITY. Tichenor has the requisite
corporate power and authority to enter into and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on the
part of Tichenor, and no other corporate proceedings on the part of
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Tichenor are necessary to authorize the execution or delivery of this Agreement
or, other than the approval of the Merger and this Agreement by the
shareholders of Tichenor, to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Tichenor and
(assuming that this Agreement constitutes a valid and binding obligation of
Parent and, upon consummation of the Assignment Agreement, Heftel and Heftel
Sub) constitutes a valid and binding obligation of Tichenor enforceable against
Tichenor in accordance with its terms.
3.3 CONSENTS AND APPROVALS. No consent, approval, order or
authorization of, registration, declaration or filing with, or permit from, any
Governmental Authority is required by or with respect to any of the Tichenor
Companies in connection with the execution and delivery of this Agreement by
Tichenor or the consummation by Tichenor of the transactions contemplated
hereby, except for the following: (a) any such consent, approval, order,
authorization, registration, declaration, filing or permit which the failure to
obtain or make would not, individually or in the aggregate, have a Material
Adverse Effect on Tichenor; (b) the filing of the Articles of Merger with the
Secretary of State of Texas pursuant to the provisions of the TBCA; (c) the
filing of a pre-merger notification report by Tichenor under the HSR Act and
the expiration or termination of the applicable waiting period; (d) compliance
with the Exchange Act and the Securities Act and the rules and regulations of
the SEC thereunder as may be required in connection with this Agreement and the
transactions contemplated hereby and the obtaining from the SEC of such orders
as may be so required; (e) such filings and approvals as may be required by any
applicable state securities, "blue sky" or takeover laws or Environmental Laws;
(f) such filings and approvals as may be required by any foreign pre-merger
notification, securities, corporate or other law, rule or regulation; and (g)
such filings and approvals as may be required by the FCC and the Communications
Act. Except as set forth in the DISCLOSURE LETTER, no Third-Party Consent is
required by or with respect to any of the Tichenor Companies in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
3.4 FCC MATTERS.
(a) Tichenor holds the Tichenor FCC Licenses set forth
and described in the DISCLOSURE LETTER. The Tichenor FCC Licenses constitute
all of the licenses, permits and authorizations from the FCC that are necessary
or required for and/or used in the business and operations of the Tichenor
Stations, except where the failure to hold any such Tichenor FCC License would
not have a Material Adverse Effect on Tichenor. The Tichenor FCC Licenses are
valid and in full force and effect through the dates set forth in the
DISCLOSURE LETTER unimpaired by any condition which could have a Material
Adverse Effect on Tichenor. Except as set forth in the DISCLOSURE LETTER, no
application, action or proceeding is pending for the renewal or modification of
any of the Tichenor FCC Licenses, and, except for actions or proceedings
affecting radio broadcast stations generally, no application, complaint, action
or proceeding is pending or, to Tichenor's knowledge, threatened that may
result in the (i) denial of an application for renewal, (ii) the revocation,
modification, non-renewal or suspension of any of the Tichenor FCC Licenses,
(iii) the issuance of a cease- and-desist order or (iv) the imposition of any
administrative or judicial sanction with respect to any of the Tichenor
Stations.
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(b) There is not now issued or outstanding or, to
Tichenor's knowledge, threatened any investigation, proceeding, notice of
violation or material complaint against Tichenor at the FCC. Tichenor has no
knowledge of any Person who has manifested an intention to contest the renewal
of any Tichenor FCC License for any of the Tichenor Stations.
(c) The Tichenor Stations, their respective physical
facilities, electrical and mechanical systems and transmitting and studio
equipment are being operated in all material respects in compliance with the
specifications of the applicable Tichenor FCC Licenses. Tichenor has complied
in all material respects with all requirements of the FCC and the Federal
Aviation Administration with respect to the construction and/or alteration of
Tichenor's antenna structures, and "no hazard" determinations for each antenna
structure have been obtained.
(d) Tichenor and the Tichenor Stations are in compliance
in all material respects with the Communications Act.
(e) Tichenor knows of no facts, conditions or events
relating to Tichenor or the Tichenor Stations that might cause the FCC to have
a legally valid basis to refuse to approve the change of control of the
Tichenor FCC Licenses as provided for in this Agreement or not to renew any of
the Tichenor FCC Licenses in the ordinary course.
(f) In accordance with the Communications Act, (i)
Tichenor has not issued to Aliens, either individually or in the aggregate, in
excess of 25% of the total number of shares of capital stock of Tichenor
outstanding at any time and has not permitted the transfer on the books of
Tichenor of any capital stock to any Alien that would result in Aliens holding
in excess of 25% of the total number of shares of capital stock of Tichenor
then outstanding and (ii) no Alien or Aliens are entitled to vote or direct or
control the vote of more than 25% of (A) the total number of shares of capital
stock of Tichenor outstanding and entitled to vote generally for the election
of directors, or (B) the total voting power of all shares of capital stock of
Tichenor outstanding and entitled to vote generally for the election of
directors.
3.5 FINANCIAL STATEMENTS. The Tichenor Financial Statements were
prepared in conformity with GAAP applied on a consistent basis during the
periods involved (except the unaudited statements do not account for income
taxes in conformity with GAAP and other items as may be indicated in the notes
thereto) and present fairly, in all material respects, the consolidated
financial position of Tichenor and the Tichenor Subsidiaries as of their
respective dates and for the periods then ended, and the consolidated results
of their operations and, with respect to the audited Tichenor Financial
Statements, their consolidated cash flows for the years then ended.
3.6 CAPITAL STRUCTURE.
(a) The authorized capital stock of Tichenor consists of
9,897,000 shares of Tichenor Common Stock, 100,000 shares of Tichenor Junior
Preferred and 3,000 shares of Tichenor Senior Preferred.
(b) There are issued and outstanding (i) 684,168.93
shares of Tichenor Common Stock, (ii) 35,772.48 shares of Tichenor Junior
Preferred, (iii) 3,000 shares of Tichenor
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Senior Preferred and (iv) the Tichenor Warrant relating to 28,161.70 shares of
Tichenor Common Stock. 59,535.16 shares of Tichenor Common Stock and 1,057
shares of Tichenor Junior Preferred are held by Tichenor as treasury stock.
(c) Except as set forth in Section 3.6(b), there are
outstanding (i) no shares of capital stock or other voting securities of
Tichenor, (ii) no securities of Tichenor or any other Person convertible into
or exchangeable or exercisable for shares of capital stock or other voting
securities of Tichenor, and (iii) except as set forth in the DISCLOSURE LETTER,
no subscriptions, options, warrants, calls, rights (including preemptive
rights), commitments, understandings or agreements to which Tichenor is a party
or by which it is bound obligating Tichenor to issue, deliver, sell, purchase,
redeem, acquire or register shares of capital stock or other voting securities
of Tichenor (or securities convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities of Tichenor) or obligating
Tichenor to grant, extend or enter into any such subscription, option, warrant,
call, right, commitment, understanding or agreement.
(d) All outstanding shares of Tichenor capital stock are
validly issued, fully paid and nonassessable and, except as set forth in the
DISCLOSURE LETTER, are not subject to any preemptive right.
(e) Except as set forth in the DISCLOSURE LETTER, all
outstanding shares of capital stock and other voting securities of each of the
Tichenor Subsidiaries are owned, directly or indirectly, by Tichenor, free and
clear of all Liens, claims and options of any nature (except for Permitted
Encumbrances). Except as set forth in the DISCLOSURE LETTER, there are
outstanding (i) no securities of the Tichenor Subsidiaries or any other Person
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities of the Tichenor Subsidiaries, and (ii) no
subscriptions, options, warrants, calls, rights (including preemptive rights),
commitments, understandings or agreements to which any of the Tichenor
Subsidiaries is a party or by which it is bound obligating any of the Tichenor
Subsidiaries to issue, deliver, sell, purchase, redeem or acquire shares of
capital stock or other voting securities of any of the Tichenor Subsidiaries
(or securities convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities of any of the Tichenor Subsidiaries)
or obligating any of the Tichenor Subsidiaries to grant, extend or enter into
any such subscription, option, warrant, call, right, commitment, understanding
or agreement.
(f) Except as otherwise set forth in the DISCLOSURE
LETTER, there is no shareholder agreement, voting trust or other agreement or
understanding to which Tichenor is a party or by which it is bound relating to
the voting of any shares of the capital stock of any of the Tichenor Companies.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as otherwise set
forth in the DISCLOSURE LETTER or as contemplated by this Agreement, since May
31, 1996, the Tichenor Companies, taken as a whole, have not suffered any
Material Adverse Effect resulting from any activities pursuant to which the
Tichenor Companies:
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(a) Discharged or satisfied any Lien or paid any
obligation or liability, absolute or contingent, other than current liabilities
incurred and paid in the ordinary course of business and consistent with past
practices;
(b) Paid or declared any dividends or distributions,
purchased, redeemed, acquired or retired any indebtedness, stock or other
securities from its shareholders, other securityholders or any other Person,
made any loans or advances or guaranteed any loans or advances to any Person
(other than loans, advances or guaranties made to subsidiaries or in the
ordinary course of business and consistent with past practices);
(c) Except for Permitted Encumbrances, suffered or
permitted any Lien to arise or be granted or created against or upon any of its
assets;
(d) Cancelled, waived or released any rights or claims
against, or indebtedness owed by, third parties in excess of $25,000;
(e) Amended its certificate or articles of incorporation
or bylaws;
(f) Made or permitted any amendment, supplement,
modification or termination of any Tichenor Material Agreement;
(g) Sold, leased, transferred, assigned or otherwise
disposed of any assets that, individually or in the aggregate, had a value at
the time of such lease, transfer, assignment or disposition of $500,000 or more
(and, in each case where a sale, lease, transfer, assignment or other
disposition was made, it was made for fair consideration in the ordinary course
of business);
(h) Paid, loaned or advanced (other than the payment,
advance or reimbursement of expenses in the ordinary course of business) any
amounts to, or sold, transferred or leased any of its assets to, or entered
into any other transactions with, any of its Affiliates, other than loans and
advances to Tichenor Subsidiaries;
(i) Made any material change in any of the accounting
principles followed by it or the method of applying such principles;
(j) Entered into any material transactions (other than as
contemplated by this Agreement) except in the ordinary course of business and
consistent with past practices;
(k) Accelerated, terminated or cancelled any agreement,
contract, lease or license (or series of related agreements, contracts, leases
and licenses) involving more than $100,000 to which any of the Tichenor
Companies is a party or by which any of them is bound;
(l) Issued any note, bond or other debt security or
created, incurred, assumed or guaranteed any indebtedness for borrowed money or
capitalized lease obligations involving more than $100,000 in the aggregate
(other than pursuant to the Bank Credit Agreement or the Term Loan);
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(m) Delayed or postponed the payment of accounts payable
and other liabilities outside the ordinary course of business;
(n) Issued, sold or otherwise disposed of any of its
capital stock or granted any options, warrants or other rights to purchase or
obtain (including upon conversion, exchange or exercise) any of its capital
stock;
(o) Expended or committed to expend capital in excess of
$500,000;
(p) Made any change in tax elections or the manner taxes
are reported;
(q) Accelerated the vesting period of any option or
warrant; or
(r) Agreed, whether in writing or otherwise, to do any of
the foregoing.
3.8 LITIGATION. Except as otherwise set forth in the DISCLOSURE
LETTER, (a) no litigation, arbitration, investigation or other proceeding of
any Governmental Authority is pending or, to the knowledge of Tichenor,
threatened against any of the Tichenor Companies or their respective assets
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect on Tichenor; (b) Tichenor has no knowledge of any facts that are
likely to give rise to any litigation, arbitration, investigation or other
proceeding of any Governmental Authority which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on Tichenor;
and (c) no Tichenor Company is subject to any outstanding injunction, judgment,
order, decree or ruling. There is no litigation, proceeding or investigation
pending or, to the knowledge of Tichenor, threatened against or affecting any
of the Tichenor Companies that questions the validity or enforceability of this
Agreement or any other document, instrument or agreement to be executed and
delivered by Tichenor in connection with the transactions contemplated hereby.
3.9 ENVIRONMENTAL MATTERS. Except as set forth in the DISCLOSURE
LETTER, to the knowledge of Tichenor:
(a) Each of the Tichenor Companies has conducted its
business and operated its assets, and is conducting its business and operating
its assets, in material compliance with all applicable Environmental Laws;
(b) None of the Tichenor Companies has been notified by
any Governmental Authority or other third party that any of the operations or
assets of any of the Tichenor Companies is the subject of any investigation or
inquiry by any Governmental Authority or other third party evaluating whether
any material remedial action is needed to respond to a release or threatened
release of any Hazardous Material or to the improper storage or disposal
(including storage or disposal at offsite locations) of any Hazardous Material;
(c) None of the Tichenor Companies and no other Person
has filed any notice under any federal, state or local law indicating that (i)
any of the Tichenor Companies is responsible for the improper release into the
environment, or the improper storage or disposal,
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of any Hazardous Material, or (ii) any Hazardous Material is improperly stored
or disposed of upon any property of any of the Tichenor Companies;
(d) None of the Tichenor Companies has any material
contingent liability in connection with (i) the release or threatened release
into the environment at, beneath or on any property now or previously owned or
leased by any of the Tichenor Companies, or (ii) the storage or disposal, of
any Hazardous Material;
(e) None of the Tichenor Companies has received any
claim, complaint, notice, inquiry or request for information involving any
matter which remains unresolved as of the date hereof with respect to any
alleged violation of any Environmental Law or regarding potential liability
under any Environmental Law relating to operations or conditions of any
facilities or property (including off-site storage or disposal of any Hazardous
Material from such facilities or property) currently or formerly owned, leased
or operated by any of the Tichenor Companies;
(f) No property now or previously owned, leased or
operated by any of the Tichenor Companies is listed on the National Priorities
List pursuant to CERCLA or on the CERCLIS or on any other federal or state list
as sites requiring investigation or cleanup;
(g) None of the Tichenor Companies is directly
transporting, has directly transported, is directly arranging for the
transportation of, or has directly arranged for the transportation of any
Hazardous Material to any location which is listed on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar federal or state list
or which is the subject of federal, state or local enforcement actions or other
investigations that may lead to material claims against such company for
remedial work, damage to natural resources or personal injury, including claims
under CERCLA;
(h) There are no sites, locations or operations at which
any of the Tichenor Companies is currently undertaking, or except as disclosed
in the DISCLOSURE LETTER, has completed, any remedial or response action
relating to any such disposal or release, as required by Environmental Laws;
and
(i) All underground storage tanks and solid waste
disposal facilities owned or operated by the Tichenor Companies are used and
operated in material compliance with Environmental Laws.
3.10 BROKERS. Except as set forth on the DISCLOSURE LETTER, no
broker, finder, investment banker or other Person is or will be, in connection
with the transactions contemplated by this Agreement, entitled to any
brokerage, finder's or other fee or compensation based on any arrangement or
agreement made by or on behalf of Tichenor and for which Parent, Heftel, Heftel
Sub or any of the Tichenor Companies will have any obligation or liability.
3.11 VOTE REQUIRED. The affirmative vote or written consent of the
holders of a majority of the outstanding shares of each of the Tichenor Common
Stock, Tichenor Junior Preferred and Tichenor Senior Preferred and the
affirmative vote of the Tichenor Common Stock and the Tichenor Junior Preferred
voting together as a single class, as provided in Tichenor's articles of
incorporation, as amended, are the only votes of the holders of any class or
series of
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Tichenor capital stock or other voting securities necessary to approve this
Agreement, the Merger and the transactions contemplated hereby. As of the date
hereof, the affirmative written consent of the Tichenor Senior Preferred to
approve this Agreement and the Merger has been obtained.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT,
HEFTEL AND HEFTEL SUB
4.1 REPRESENTATIONS AND WARRANTIES OF PARENT. Parent hereby
represents and warrants to Tichenor as follows:
(a) ORGANIZATION. Parent (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Texas, (ii) has the requisite power and authority to own, lease and operate its
properties and to conduct its business as it is presently being conducted, and
(iii) is duly qualified to do business as a foreign corporation, and is in good
standing, in each jurisdiction where the character of the properties owned or
leased by it or the nature of its activities makes such qualification necessary
(except where any failure to be so qualified as a foreign corporation or to be
in good standing would not, individually or in the aggregate, have a material
adverse effect on Parent). Copies of the articles of incorporation and bylaws
of Parent have heretofore been delivered to Tichenor, and such copies are
accurate and complete as of the date hereof.
(b) AUTHORITY AND ENFORCEABILITY. Parent has the
requisite corporate power and authority to enter into and deliver this
Agreement and to consummate the transactions applicable to Parent contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions applicable to Parent contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Parent,
and, other than the approval of the Heftel Proposal by the board of directors
and stockholders of Heftel, no other corporate proceedings on the part of
Parent are necessary to authorize the execution or delivery of this Agreement.
This Agreement has been duly and validly executed and delivered by Parent and
(assuming that this Agreement constitutes a valid and binding obligation of
Tichenor) constitutes a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms.
(c) CONSENTS AND APPROVALS. No consent, approval, order
or authorization of, registration, declaration or filing with, or permit from,
any Governmental Authority is required by or with respect to Parent in
connection with the execution and delivery of this Agreement by Parent, except
for the following: (i) any such consent, approval, order, authorization,
registration, declaration, filing or permit which the failure to obtain or make
would not, individually or in the aggregate, have a material adverse effect on
Parent and its subsidiaries taken as a whole; (ii) the filing of the Articles
of Merger with the Secretary of State of Texas pursuant to the provisions of
the TBCA; (iii) the filing of a pre-merger notification report by Parent under
the HSR Act and the expiration or termination of the applicable waiting period;
(iv) compliance with the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder as may be required in connection with this
Agreement and the transactions
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contemplated hereby and the obtaining from the SEC of such orders as may be so
required; (v) the filing with Nasdaq of a listing application relating to the
shares of Heftel Common Stock to be issued pursuant to the Merger and the
obtaining from Nasdaq of its approvals thereof; (vi) such filings and approvals
as may be required by any applicable state securities, "blue sky" or takeover
laws or Environmental Laws; and (vii) such filings and approvals as may be
required by any foreign pre-merger notification, securities, corporate or other
law, rule or regulation and (viii) such filings and approvals as may be
required by the FCC and the Communications Act. No Third-Party Consent is
required by or with respect to Parent in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) any such Third-Party Consent which the failure to obtain
would not, individually or in the aggregate, have a material adverse effect on
Parent, and (ii) the valid approval of the Heftel Proposal by the stockholders
of Heftel.
(d) BROKERS. No broker, finder, investment banker or
other Person is or will be, in connection with the Merger, entitled to any
brokerage, finder's or other fee or compensation based on any arrangement or
agreement made by or on behalf of Parent and for which Parent, Heftel or Heftel
Sub or any of the Tichenor Companies will have any obligation or liability.
4.2 REPRESENTATIONS AND WARRANTIES OF HEFTEL AND HEFTEL SUB. Upon
consummation of the Assignment Agreement pursuant to Section 8.9, Heftel and
Heftel Sub shall be deemed to have jointly and severally represented and
warranted to Tichenor as of such date as follows:
(a) ORGANIZATION. Each of the Heftel Companies (i) is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of its state of organization, (ii) has the requisite
power and authority to own, lease and operate its properties and to conduct its
business as it is presently being conducted, and (iii) is duly qualified to do
business as a foreign entity, and is in good standing, in each jurisdiction
where the character of the properties owned or leased by it or the nature of
its activities makes such qualification necessary (except where any failure to
be so qualified as a foreign corporation or to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on Heftel).
Copies of the certificate or articles of incorporation and bylaws, or
partnership agreement, of each of the Heftel Companies have heretofore been
delivered to Tichenor, and such copies are accurate and complete as of the date
of the Assignment Agreement.
(b) AUTHORITY AND ENFORCEABILITY. Each of Heftel and
Heftel Sub has the requisite corporate power and authority to enter into and
deliver this Agreement and to consummate the transactions contemplated hereby.
The Board of Directors of Heftel has taken all necessary action to exempt the
transactions contemplated herein from the provisions of Section 203 of the
DGCL. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Heftel and Heftel Sub, including
approval by the board of directors and stockholders of Heftel and Heftel Sub,
and, other than the approval of the Heftel Proposal by the stockholders of
Heftel and Heftel Sub, no other corporate proceedings on the part of Heftel or
Heftel Sub are necessary to authorize the execution or delivery of this
Agreement. This Agreement has been duly and validly executed and delivered by
Heftel and Heftel Sub and
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(assuming that this Agreement constitutes a valid and binding obligation of
Tichenor) constitutes a valid and binding obligation of Heftel enforceable
against Heftel in accordance with its terms.
(c) CONSENTS AND APPROVALS. No consent, approval, order
or authorization of, registration, declaration or filing with, or permit from,
any Governmental Authority is required by or with respect to Heftel or Heftel
Sub in connection with the execution and delivery of this Agreement by Heftel
and Heftel Sub or the consummation by Heftel and Heftel Sub of the transactions
contemplated hereby, except for the following: (i) any such consent, approval,
order, authorization, registration, declaration, filing or permit which the
failure to obtain or make would not, individually or in the aggregate, have a
Material Adverse Effect on Heftel; (ii) the filing of the Articles of Merger
with the Secretary of State of Texas pursuant to the provisions of the TBCA;
(iii) the filing of a pre-merger notification report by Heftel under the HSR
Act and the expiration or termination of the applicable waiting period; (iv)
the filing with the SEC of the Registration Statement and such reports under
Section 13(a) of the Exchange Act and such other compliance with the Exchange
Act and the Securities Act and the rules and regulations of the SEC thereunder
as may be required in connection with this Agreement and the transactions
contemplated hereby and the obtaining from the SEC of such orders as may be so
required; (v) the filing with Nasdaq of a listing application relating to the
shares of Heftel Common Stock to be issued pursuant to the Merger and the
obtaining from Nasdaq of its approvals thereof; (vi) such filings and approvals
as may be required by any applicable state securities, "blue sky" or takeover
laws or Environmental Laws; (vii) such filings and approvals as may be required
by any foreign pre-merger notification, securities, corporate or other law,
rule or regulation; and (viii) such filings and approvals as may be required by
the FCC and the Communications Act. No Third-Party Consent is required by or
with respect to Heftel or Heftel Sub in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) consent of the lenders pursuant to the Heftel Credit
Agreement, (ii) any such Third-Party Consent which the failure to obtain would
not, individually or in the aggregate, have a Material Adverse Effect on
Heftel, and (iii) the valid approval of the Heftel Proposal by the stockholders
of Heftel.
(d) CAPITALIZATION. As of June 1, 1996, the authorized
capital stock of Heftel and the number, class and/or series of the shares of
the capital stock of Heftel outstanding or reserved as of the date hereof was
as set forth below. All of the outstanding shares of the capital stock of
Heftel are validly issued, fully paid, nonassessable and free of preemptive
rights, and all outstanding securities convertible into Heftel Common Stock are
duly authorized and validly issued. Except as set forth below, as of June 1,
1996, there were no shares of capital stock or other securities of Heftel
outstanding and no outstanding options, warrants, rights (including any
preemptive rights), calls or commitments of any character whatsoever to which
Heftel is a party or is bound, requiring the issuance, sale, transfer or
registration by Heftel of any shares of capital stock of Heftel or any
securities convertible into or exchangeable or exercisable for, or rights to
purchase or otherwise acquire, any shares of capital stock of Heftel.
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<PAGE> 33
HEFTEL CAPITALIZATION
<TABLE>
<CAPTION>
Class Authorized Outstanding
----- ---------- -----------
<S> <C> <C>
Class A Common Stock 30,000,000 6,336,610
$0.001 par value
Class B Common Stock 7,000,000 3,769,176
$0.001 par value
Preferred Stock 5,000,000 335,634
$0.001 par value shares of Series A
</TABLE>
As of June 1, 1996, Heftel 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.
(e) FINANCIAL STATEMENTS OF HEFTEL. As of their
respective dates, Heftel's Annual Report 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,
registration statements and other statements and documents filed by Heftel with
the SEC 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 Heftel included or incorporated by reference in the Forms 10-K
and 10-Q filed with the SEC 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 adjustments), and
present fairly the financial position, results of operations and changes in
financial position of Heftel and its consolidated subsidiaries as of the dates
and for the periods indicated. All of the consolidated financial statements of
Heftel included or incorporated by reference in the Forms 10-K and 10-Q filed
with the SEC 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 Heftel and its consolidated subsidiaries as of the
dates and for the periods indicated.
(f) BROKERS. No broker, finder, investment banker or
other Person is or will be, in connection with Merger, entitled to any
brokerage, finder's or other fee or compensation based on any arrangement or
agreement made by or on behalf of Heftel or Heftel Sub and for which Parent,
Heftel or Heftel Sub or any of the Tichenor Companies will have any obligation
or liability.
(g) VOTE REQUIRED. The affirmative votes or written
consents of the holders of a majority of the outstanding shares of Heftel
Common Stock and Heftel Sub Common Stock
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<PAGE> 34
are the only votes of the holders of any class or series of Heftel or Heftel
Sub, respectively, capital stock or other voting securities necessary to
approve the Heftel Proposal.
ARTICLE 5
COVENANTS
5.1 CONDUCT BY PARENT PENDING CLOSING. Subject to Section 8.9(b),
Parent covenants and agrees with Tichenor that, from the date of this Agreement
until the earlier to occur of the termination of this Agreement pursuant to
Section 7 and the Effective Time, without the prior written consent of
Tichenor:
(a) Parent will (i) use its reasonable efforts to cause
Heftel to approve and execute the Assignment Agreement and (ii) use its
reasonable best efforts to obtain all required approvals from the FCC in
connection with this Agreement and the transactions contemplated herein.
(b) Parent will not (i) waive the performance by Heftel
of any covenants of Heftel contained in the Tender Offer Agreement, (ii) waive
the satisfaction of any conditions precedent of Parent or Clear Channel Radio,
Inc. to the obligation to close the transactions contemplated by the Tender
Offer Agreement, or (iii) amend any of the covenants, conditions, or
termination provisions contained in the Tender Offer Agreement, in each case
without the prior consent of Tichenor, which consent shall not be unreasonably
withheld.
(c) Parent will not engage in any practice or take any
action that would cause, or permit by inaction, any of the representations and
warranties contained in Section 4.1(a), (c) or (d) to become untrue.
5.2 CONDUCT OF BUSINESS BY TICHENOR PENDING CLOSING. Tichenor
covenants and agrees with Parent and, upon consummation of the Assignment
Agreement pursuant to Section 8.9, with Heftel and Heftel Sub, that, from the
date of this Agreement until the Effective Time, each of the Tichenor Companies
will conduct its business only in the ordinary and usual course consistent with
past practices, except as set forth in the DISCLOSURE LETTER. Notwithstanding
the preceding sentence, Tichenor covenants and agrees with Parent and, upon
consummation of the Assignment Agreement pursuant to Section 8.9, with Heftel
and Heftel Sub, that, except as specifically contemplated in this Agreement,
from the date of this Agreement until the Effective Time, without the prior
written consent of Parent (or Heftel subsequent to the consummation of the
Assignment Agreement pursuant to Section 8.9):
(a) None of the Tichenor Companies will (i) amend its
certificate or articles of incorporation or bylaws; (ii) split, combine or
reclassify any of its outstanding capital stock; (iii) except as set forth in
the DISCLOSURE LETTER, declare, set aside or pay any dividends or other
distributions (whether payable in cash, property or securities) with respect to
its capital stock; (iv) issue, sell or agree to issue or sell any securities,
including its capital stock, any rights, options or warrants to acquire its
capital stock, or securities convertible into or exchangeable or exercisable
for its capital stock (other than shares of Tichenor Common Stock issued
pursuant
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<PAGE> 35
to the exercise of the Tichenor Warrant); (v) except as set forth in the
DISCLOSURE LETTER, purchase, cancel, retire, redeem or otherwise acquire any of
its outstanding capital stock or other securities; (vi) merge or consolidate
with, or transfer all or substantially all of its assets to, another
corporation or other business entity; (vii) liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution); or (viii) enter into any contract,
agreement, commitment or arrangement with respect to any of the foregoing.
(b) None of the Tichenor Companies will (i) except as set
forth in the DISCLOSURE LETTER, acquire any corporation, partnership or other
business entity or any interest therein having a transaction value,
individually or in the aggregate, in excess of $15 million; (ii) except as set
forth in the DISCLOSURE LETTER, sell, lease or sublease, transfer or otherwise
dispose of or mortgage, pledge or otherwise encumber any assets that have a
value at the time of such sale, lease, sublease, transfer or disposition in
excess of $600,000, individually, or $3 million, in the aggregate; (iii) except
as set forth in the DISCLOSURE LETTER, sell, transfer or otherwise dispose of
or mortgage, pledge or otherwise encumber any securities of any other Person
(including any capital stock or other securities in the Tichenor Subsidiaries);
(iv) except as set forth in the DISCLOSURE LETTER, make any material loans,
advances or capital contributions to, or investments in, any Person in excess
of $7.5 million in the aggregate (other than loans or advances made to Tichenor
Subsidiaries, or made in the ordinary course of business and consistent with
past practices); (v) apply to the FCC for any construction permit that would
have a Material Adverse Effect on the current operations of any of the radio
stations owned by any of the Tichenor Companies (individually, a "TICHENOR
STATION"); (vi) terminate or fail to renew any FCC licenses for the Tichenor
Stations (the "TICHENOR FCC LICENSES"); (vii) fail to operate any Tichenor
Station in accordance with the Communications Act, the rules, regulations and
policies of the FCC and the terms of the Tichenor FCC Licenses, which failure
would result in a Material Adverse Effect on Tichenor; (viii) fail to file in a
timely manner any applications to renew a Tichenor FCC License; (ix) enter into
any agreement or transaction with any, or modify the terms of any existing
agreement with any, Affiliate; or (x) enter into any contract, agreement,
commitment or arrangement with respect to any of the foregoing.
(c) None of the Tichenor Companies, other than with
respect to intercompany transactions, will (i) permit to be outstanding at any
time under the Bank Credit Agreement indebtedness for borrowed money in excess
of an aggregate of $50 million; (ii) except as set forth in the DISCLOSURE
LETTER, incur any indebtedness for borrowed money other than under the Bank
Credit Agreement or the Term Loan; (iii) except as set forth in the DISCLOSURE
LETTER, assume, endorse (other than endorsements of negotiable instruments in
the ordinary course of business), guarantee or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the liabilities
or obligations of any Person other than another Tichenor Company; or (iv) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing.
(d) The Tichenor Companies will operate, maintain and
otherwise deal with their property and assets in accordance with good and
prudent business practices and in accordance with all applicable contracts and
agreements and all applicable laws, rules and regulations, except where any
failure would not have a Material Adverse Effect on Tichenor.
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<PAGE> 36
(e) None of the Tichenor Companies will (i) enter into,
or otherwise become liable or obligated under or pursuant to, (A) any employee
benefit, pension or other plan (whether or not subject to ERISA), or (B) any
other stock option, stock purchase, incentive or deferred compensation plans or
arrangements or other fringe benefit plan (other than obligations that are
mandated by the terms of agreements or plans existing as of the date hereof);
(ii) except for payments made pursuant to any employee benefit plan of Tichenor
or any plan, agreement or arrangement described in the DISCLOSURE LETTER,
grant, or otherwise become liable for or obligated to pay, any severance or
termination payments, bonuses or increases in compensation or benefits (other
than payments, bonuses or increases that are mandated by the terms of
agreements or plans existing as of the date hereof or that are paid in the
ordinary course of business, consistent with past practices, and not
individually or in the aggregate material in amount) to, or forgive any
indebtedness of, any employee or consultant; or (iii) enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
(f) None of the Tichenor Companies will create, incur,
assume or permit to exist any Lien on any of its assets, except for Permitted
Encumbrances, and except in the ordinary course of business.
(g) The Tichenor Companies will (i) pay all Taxes,
assessments and other governmental charges imposed upon any of their assets or
with respect to their franchises, business, income or assets before any penalty
or interest accrues thereon; (ii) pay all claims (including claims for labor,
services, materials and supplies) that have become due and payable and which by
law have or may become a Lien upon any of their assets prior to the time when
any penalty or fine shall be incurred with respect thereto or any such Lien
shall be imposed thereon; and (iii) comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, obtain or take all Governmental Actions necessary in
the operation of their businesses, and comply with and enforce the provisions
of all Tichenor Material Agreements, except where the failure to so comply,
obtain, take or enforce will not have a Material Adverse Effect on Tichenor,
including paying, when due, all rentals, royalties, expenses and other
liabilities relating to their businesses or assets; provided, however, that the
Tichenor Companies may contest the imposition of any such Taxes, assessments
and other governmental charges, any such claim, or the requirements of any
applicable law, rule, regulation or order or any Tichenor Material Agreement if
done so in good faith by appropriate proceedings and if adequate reserves are
established in accordance with GAAP or as may be determined as sufficient by
Tichenor's board of directors.
(h) The Tichenor Companies will maintain adequate
insurance consistent with industry practice.
(i) The Tichenor Companies will at all times preserve and
keep in full force and effect their corporate existence and rights and
franchises material to their performance under this Agreement.
(j) Tichenor will not engage in any practice or take any
action that would cause, or permit by inaction, any of the representations and
warranties made by it in Article 3 to become untrue.
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<PAGE> 37
(k) Tichenor shall use its reasonable best efforts to
obtain all necessary lender approval required under the Bank Credit Agreement
to the consummation of the Merger or, with the cooperation of Heftel, to
refinance such indebtedness on terms reasonably acceptable to Heftel to the
extent that the parties determine that it is reasonably foreseeable that such
approval will not be forthcoming. Tichenor shall keep Heftel fully informed of
the status of obtaining such consent, or the likelihood of obtaining such
refinancing, as the case may be, promptly upon the occurrence of any material
developments relating thereto.
5.3 CONDUCT OF BUSINESS BY HEFTEL PENDING CLOSING. Heftel
covenants and agrees with Tichenor that, from the date of the consummation of
the Heftel Acquisition until the Effective Time, each of the Heftel Companies
will conduct its business only in the ordinary and usual course consistent with
past practices, except as set forth in the Heftel Disclosure Documents.
Notwithstanding the preceding sentence, Heftel covenants and agrees with
Tichenor that, except as specifically contemplated in this Agreement, from the
date of the consummation of the Heftel Acquisition until the Effective Time,
without the prior written consent of Tichenor:
(a) Heftel will not (i) amend its certificate of
incorporation or bylaws, except as set forth in the Heftel Proposal; (ii)
split, combine or reclassify any of its outstanding capital stock, except as
contemplated by this Agreement; (iii) except as set forth in the Heftel
Disclosure Documents, declare, set aside or pay any dividends or other
distributions (whether payable in cash, property or securities) with respect to
its capital stock; (iv) issue, sell or agree to issue or sell any securities,
including its capital stock, any rights, options or warrants to acquire its
capital stock, or securities convertible into or exchangeable or exercisable
for its capital stock (other than securities issued pursuant to obligations
disclosed in the Tender Offer Agreement); (v) except pursuant to obligations
disclosed in the Tender Offer Agreement, purchase, cancel, retire, redeem or
otherwise acquire any of its outstanding capital stock or other securities;
(vi) merge or consolidate with, or transfer all or substantially all of its
assets to, another corporation or other business entity; (vii) liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution); or (viii) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing, except as set forth in this Agreement.
(b) The Heftel Companies will not (i) except as set forth
in the Heftel Disclosure Documents, acquire any corporation, partnership or
other business entity or any interest therein having a transaction value,
individually or in the aggregate, in excess of $15 million; (ii) except as set
forth in the Heftel Disclosure Documents, sell, lease or sublease, transfer or
otherwise dispose of or mortgage, pledge or otherwise encumber any assets that
have a value at the time of such sale, lease, sublease, transfer or disposition
in excess of $600,000, individually, or $3 million, in the aggregate; (iii)
except as set forth in the Heftel Disclosure Documents, sell, transfer or
otherwise dispose of or mortgage, pledge or otherwise encumber any securities
of any other Person (including any capital stock or other securities in the
Heftel Subsidiaries); (iv) except as set forth in the Heftel Disclosure
Documents, make any material loans, advances or capital contributions to, or
investments in, any Person in excess of $7.5 million in the aggregate (other
than loans or advances made to the Heftel Subsidiaries, or made in the ordinary
course of business and consistent with past practices); (v) apply to the FCC
for any construction permit that would have a material adverse effect on the
current operations of any of the radio stations owned by Heftel (individually,
a "HEFTEL STATION"); (vi) terminate or fail to renew any FCC licenses for the
Heftel Stations (the "HEFTEL FCC LICENSES"); (vii) fail
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<PAGE> 38
to operate any Heftel Station in accordance with the Communications Act, the
rules, regulations and policies of the FCC and the terms of the Heftel FCC
Licenses, which failure would result in a Material Adverse Effect on Heftel;
(viii) fail to file in a timely manner any applications to renew a Heftel FCC
License; (ix) enter into any agreement or transaction with any, or modify the
terms of any existing agreement with any, Affiliate; or (x) enter into any
contract, agreement, commitment or arrangement with respect to any of the
foregoing.
(c) Neither Heftel nor any Heftel Subsidiary will, other
than with respect to intercompany transactions, (i) permit to be outstanding at
any time under the Heftel Credit Agreement indebtedness for borrowed money in
excess of an aggregate of $175 million; (ii) except as set forth in the Heftel
Disclosure Documents, incur any indebtedness for borrowed money other than
under the Heftel Credit Agreement; (iii) except as set forth in the Heftel
Disclosure Documents, assume, endorse (other than endorsements of negotiable
instruments in the ordinary course of business), guarantee or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
liabilities or obligations of any Person other than another Heftel Company; or
(v) enter into any contract, agreement, commitment or arrangement with respect
to any of the foregoing.
(d) Heftel and each Heftel Subsidiary will operate,
maintain and otherwise deal with their property and assets in accordance with
good and prudent business practices and in accordance with all applicable
contracts and agreements and all applicable laws, rules and regulations, except
where any failure would not have a Material Adverse Effect on Heftel.
(e) Neither Heftel nor any Heftel Subsidiary will (i)
enter into, or otherwise become liable or obligated under or pursuant to, (A)
any employee benefit, pension or other plan (whether or not subject to ERISA),
or (B) any other stock option, stock purchase, incentive or deferred
compensation plans or arrangements or other fringe benefit plan (other than
obligations mandated by the terms of agreements or plans existing as of the
date hereof); (ii) except for payments made pursuant to any employee benefit
plan of Heftel or any plan, agreement or arrangement in effect as of the date
of the Assignment Agreement and described in the Heftel Disclosure Documents,
grant, or otherwise become liable for or obligated to pay, any severance or
termination payments, bonuses or increases in compensation or benefits (other
than payments, bonuses or increases that are mandated by the terms of
agreements or plans existing as of the date of the Assignment Agreement or that
are paid in the ordinary course of business, consistent with past practices,
and not individually or in the aggregate material in amount) to, or forgive any
indebtedness of, any employee or consultant; or (iii) enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
(f) Neither Heftel nor any Heftel Subsidiary will create,
incur, assume or permit to exist any Lien on any of its assets, except for
Permitted Encumbrances, and except in the ordinary course of business.
(g) Heftel and each Heftel Subsidiary will (i) pay all
Taxes, assessments and other governmental charges imposed upon any of their
assets or with respect to their franchises, business, income or assets before
any penalty or interest accrues thereon; (ii) pay all claims (including claims
for labor, services, materials and supplies) that have become due and payable
and which by law have or may become a Lien upon any of their assets prior to
the time when
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<PAGE> 39
any penalty or fine shall be incurred with respect thereto or any such Lien
shall be imposed thereon; and (iii) comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, obtain or take all Governmental Actions necessary in
the operation of their businesses, and comply with and enforce the provisions
of all Heftel Material Agreements, except where the failure to so comply,
obtain, take or enforce will not have a Material Adverse Effect on Heftel,
including paying, when due, all rentals, royalties, expenses and other
liabilities relating to their businesses or assets; provided, however, the
Heftel Companies may contest the imposition of any such Taxes, assessments and
other governmental charges, any such claim, or the requirements of any
applicable law, rule, regulation or order or any Heftel Material Agreement if
done so in good faith by appropriate proceedings and if adequate reserves are
established in accordance with GAAP or as may be determined as sufficient by
Heftel's board of directors.
(h) The Heftel Companies will maintain adequate insurance
consistent with industry practice.
(i) Heftel and each Heftel Subsidiary will at all times
preserve and keep in full force and effect their corporate existence and rights
and franchises material to their performance under this Agreement.
(j) Heftel will not engage in any practice or take any
action that would cause, or permit by inaction, any of the representations and
warranties made by it in Section 4.2 to become untrue.
(k) Heftel shall use its reasonable best efforts to
obtain all necessary lender approval required under the Heftel Credit Agreement
to the consummation of the Merger or, with the cooperation of Tichenor, to
refinance such indebtedness on terms reasonably acceptable to Heftel to the
extent that Heftel determines that it is reasonably foreseeable that such
approval will not be forthcoming. Heftel shall keep Tichenor fully informed of
the status of obtaining such consent, or the likelihood of obtaining such
refinancing, as the case may be, promptly upon the occurrence of any material
developments relating thereto.
5.4 ACCESS TO ASSETS, PERSONNEL AND INFORMATION.
(a) From the date hereof until the Effective Time,
Tichenor shall, upon reasonable notice, afford to Parent and the Parent
Representatives, at Parent's sole risk and expense, reasonable access during
normal business hours to any of the assets, books and records, contracts,
executive officers, management employees, representatives, agents and
facilities of the Tichenor Companies and shall, upon request, furnish promptly
to Parent (at Parent's expense) a copy of any file, book, record, contract,
permit, correspondence, or other written information, document or data
concerning any of the Tichenor Companies (or any of their respective assets)
that is within the possession or control of Tichenor. During such period, upon
reasonable notice, Tichenor will make available to a reasonable number of
Parent Representatives adequate office space and facilities at the principal
office facility of Tichenor in Dallas, Texas.
(b) Upon request by Tichenor, Parent shall use its
reasonable best efforts to cause Heftel to afford to Tichenor and the Tichenor
Representatives prior to the consummation
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<PAGE> 40
of the Assignment Agreement such access to Heftel and the Heftel Subsidiaries
as described in Section 5.4(c) and (e), subject to the execution of a mutually
acceptable confidentiality agreement between Heftel and Tichenor.
(c) From the date of the consummation of the Assignment
Agreement until the Effective Time, Heftel shall, upon reasonable notice,
afford to Tichenor and the Tichenor Representatives, at Tichenor's sole risk
and expense, reasonable access during normal business hours to any of the
assets, books and records, contracts, management employees, representatives,
agents and facilities of Heftel and the Heftel Subsidiaries and shall, upon
request, furnish promptly to Tichenor (at Tichenor's expense) a copy of any
file, book, record, contract, permit, correspondence, or other written
information, document or data concerning Heftel (or any of its assets) that is
within the possession or control of Heftel. During such period, upon
reasonable notice, Heftel will make available to a reasonable number of
Tichenor Representatives adequate office space and facilities at the principal
office facility of Heftel in Las Vegas, Nevada.
(d) From the date hereof until the Effective Time,
Tichenor will fully and accurately disclose, and will cause each of the
Tichenor Subsidiaries to fully and accurately disclose, to Parent and the
Parent Representatives all information that is (i) reasonably requested by
Parent or any of the Parent Representatives, (ii) known to any of the Tichenor
Companies and (iii) relevant in any manner or degree to the value, ownership,
use, operation, development or transferability of the assets of any of the
Tichenor Companies.
(e) From the date of the consummation of the Assignment
Agreement until the Effective Time, Heftel will fully and accurately disclose,
and will cause each of the Heftel Subsidiaries to fully and accurately
disclose, to Tichenor and the Tichenor Representatives all information that is
(i) reasonably requested by Tichenor or any of the Tichenor Representatives,
(ii) known to Heftel and the Heftel Subsidiaries and (iii) relevant in any
manner or degree to the value, ownership, use, operation, development or
transferability of the assets of Heftel and the Heftel Subsidiaries.
(f) From the date of the consummation of the Assignment
Agreement until the Effective Time, Heftel shall (i) furnish to Tichenor,
promptly upon receipt or filing (as the case may be), a copy of each
communication between Heftel and the SEC after such date relating to the Merger
or the Registration Statement and each report, schedule, registration statement
or other document filed by Heftel with the SEC after such date relating to the
Merger and (ii) promptly advise Tichenor of the substance of any oral
communications between Heftel and the SEC relating to the Merger or the
Registration Statement.
(g) Tichenor will (and will cause the Tichenor
Subsidiaries and the Tichenor Representatives to) fully cooperate in all
reasonable respects with Parent and the Parent Representatives in connection
with Parent's examinations, evaluations and investigations described in this
Section 5.4.
(h) Heftel will (and will cause the Heftel Subsidiaries
and the Heftel Representatives to) fully cooperate in all reasonable respects
with Tichenor and the Tichenor Representatives in connection with Tichenor's
examinations, evaluations and investigations described in this Section 5.4.
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(i) Tichenor agrees that it will not (and will cause the
Tichenor Representatives not to), Parent agrees that it will not (and will
cause the Parent Representatives not to), and Heftel agrees that it will not
(and will cause the Heftel Representatives not to), use any confidential
information obtained pursuant to this Section 5.4 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement and will
maintain the confidential nature of such information.
(j) Notwithstanding anything in this Section 5.4 to the
contrary, (i) Tichenor shall not be obligated under the terms of this Section
5.4 to disclose to Parent or the Parent Representatives, or grant Parent or the
Parent Representatives access to, information that is within Tichenor's
possession or control but subject to a valid and binding confidentiality
agreement with a third party without first obtaining the consent of such third
party, and Tichenor, to the extent reasonably requested by Parent, will use its
reasonable best efforts to obtain any such consent, and (ii) Heftel shall not
be obligated under the terms of this Section 5.4 to disclose to Tichenor or the
Tichenor Representatives, or grant Tichenor or the Tichenor Representatives
access to, information that is within Heftel's possession or control but
subject to a valid and binding confidentiality agreement with a third party
without first obtaining the consent of such third party, and Heftel, to the
extent reasonably requested by Tichenor, will use its reasonable best efforts
to obtain any such consent.
5.5 NO SOLICITATION.
(a) TICHENOR.
(i) Immediately following the execution of this
Agreement, Tichenor will (and will cause each of the Tichenor
Representatives to) terminate any and all existing activities,
discussions and negotiations with third parties (other than
Parent) with respect to any possible transaction involving the
acquisition of the Tichenor Common Stock or the merger or
other business combination of Tichenor with or into any such
third party.
(ii) Tichenor will not (and will cause the
Tichenor Representatives not to) solicit, initiate or
knowingly encourage the submission of, any offer or proposal
to acquire all or any part of the Tichenor Common Stock or all
or any material portion of the assets or business of Tichenor
(other than the transactions contemplated by this Agreement),
whether by merger, purchase of assets, tender offer, exchange
offer or otherwise.
(b) HEFTEL.
(i) Immediately following the consummation of the
Assignment Agreement, Heftel will (and will cause each of the
Heftel Representatives to) terminate any and all existing
activities, discussions and negotiations with third parties
(other than Parent and Tichenor) with respect to any possible
transaction involving the acquisition of the Heftel Common
Stock or the merger or other business combination of Heftel
with or into any such third party.
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(ii) Until the earlier to occur of the termination
of this Agreement pursuant to Section 7 and the Effective
Time, Heftel will not (and will cause the Heftel
Representatives not to) solicit, initiate or knowingly
encourage the submission of, any offer or proposal to acquire
all or any part of the Heftel Common Stock or all or any
material portion of the assets or business of Heftel (other
than the transactions contemplated by the Heftel Acquisition
or this Agreement), whether by merger, purchase of assets,
tender offer, exchange offer or otherwise.
5.6 HEFTEL STOCKHOLDERS MEETING. Subject to Section 8.9(b),
Parent shall use its reasonable best efforts to cause Heftel to take all action
necessary in accordance with applicable law and Heftel's certificate of
incorporation and bylaws to convene a meeting of its stockholders as promptly
as practicable after the successful completion of the Heftel Acquisition for
the purpose of voting on the Heftel Proposal. Subject to the exercise of its
fiduciary duties as described in Section 8.9(b), the board of directors of
Heftel shall recommend approval of the Heftel Proposal and shall take all
lawful action to solicit such approval, including timely mailing the Proxy
Statement/Prospectus to the stockholders of Heftel. Notwithstanding the above,
however, the following shall be conditions to the mailing of the Proxy
Statement/Prospectus:
(a) Heftel shall have received an opinion from a
nationally recognized firm of investment bankers or financial advisors selected
by Heftel (which opinion shall be acceptable in form and substance to Heftel)
to the effect that the Merger consideration to be paid by Heftel is fair to the
Heftel stockholders from a financial point of view, and such opinion shall not
have been withdrawn, revoked or modified.
(b) Heftel and Tichenor shall have received a letter from
a nationally recognized firm of independent public accountants, dated as of the
date the Proxy Statement/Prospectus is first mailed to Heftel's stockholders,
addressed to Heftel and Tichenor, in form and substance reasonably satisfactory
to Heftel and Tichenor, in connection with such accountants' review of certain
financial and accounting matters contained in the Proxy Statement/Prospectus
and the Registration Statement.
5.7 TICHENOR SHAREHOLDERS MEETING. Tichenor shall take all
necessary action in accordance with applicable law and its articles of
incorporation and bylaws to convene a meeting of its shareholders as promptly
as practicable after the date hereof for the purpose of voting on a proposal to
approve this Agreement and the Merger.
5.8 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS.
(a) Heftel and Tichenor shall cooperate and promptly
prepare the Registration Statement, and Heftel shall file the Registration
Statement with the SEC as soon as practicable after the execution and delivery
of the Assignment Agreement and in any event not later than 45 days after such
date. Heftel shall use its reasonable best efforts, and Tichenor shall
cooperate with Heftel (including furnishing all information concerning Tichenor
and the holders of Tichenor Common Stock as may be reasonably requested by
Heftel), to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing. Heftel shall use
its reasonable efforts, and Tichenor shall cooperate with Heftel to obtain all
necessary
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state securities laws or "blue sky" permits, approvals and registrations in
connection with the issuance of Heftel Common Stock pursuant to the Merger.
(b) Heftel and Tichenor will cause the Registration
Statement (including the Proxy Statement/Prospectus), at the time it becomes
effective under the Securities Act, to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations of the SEC thereunder.
(c) Tichenor hereby covenants and agrees with Parent and
Heftel that (i) the Registration Statement (at the time it becomes effective
under the Securities Act and at the Effective Time) will not contain an 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 not misleading
(provided, however, that this clause (i) shall apply only to information
contained in the Registration Statement that was supplied by Tichenor
specifically for inclusion therein); and (ii) the Proxy Statement/Prospectus
(at the time it is first mailed to stockholders of Heftel, at the time of the
Heftel Meeting, and at the Effective Time) will not contain an untrue statement
of a material fact or omit to state a 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 (provided, however,
that this clause (ii) shall apply only to information contained in the
Registration Statement that was supplied by Tichenor specifically for inclusion
therein). If, at any time prior to the Effective Time, any event with respect
to Tichenor, or with respect to other information supplied by Tichenor
specifically for inclusion in the Registration Statement, occurs and such event
is required to be described in an amendment to the Registration Statement,
Tichenor shall promptly notify Heftel of such occurrence and shall cooperate
with Heftel in the preparation and filing of such amendment. If, at any time
prior to the Effective Time, any event with respect to Tichenor, or with
respect to other information included in the Proxy Statement/Prospectus, occurs
and such event is required to be described in a supplement to the Proxy
Statement/Prospectus, such event shall be so described and such supplement
shall be promptly prepared, filed and disseminated.
(d) Heftel, upon consummation of the Assignment
Agreement, covenants and agrees with Tichenor that (i) the Registration
Statement (at the time it becomes effective under the Securities Act and at the
Effective Time) will not contain an 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 not misleading (provided, however, that this clause (i)
shall not apply to any information contained in the Registration Statement that
was supplied by Tichenor specifically for inclusion therein); and (ii) the
Proxy Statement/Prospectus (at the time it is first mailed to shareholders of
Heftel, at the time of the Heftel Meeting, and at the Effective Time) will not
contain an untrue statement of a material fact or omit to state a 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 (provided, however, that this clause (ii) shall not apply to any
information contained in the Registration Statement that was supplied by
Tichenor specifically for inclusion therein). If, at any time prior to the
Effective Time, any event with respect to Heftel, or with respect to other
information included in the Registration Statement, occurs and such event is
required to be described in an amendment to the Registration Statement, such
event shall be so described and such amendment shall be promptly prepared and
filed. If, at any time prior to the Effective Time, any event with respect to
Heftel, or with respect to other
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information supplied by Heftel specifically for inclusion in the Proxy
Statement/Prospectus, occurs and such event is required to be described in a
supplement to the Proxy Statement/Prospectus, Heftel shall promptly notify
Tichenor of such occurrence and shall prepare, file and disseminate such
supplement.
(e) Heftel shall use its reasonable efforts to advise
Tichenor, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective under the Securities Act, the
issuance of any stop order with respect to the Registration Statement, the
suspension of the qualification of the Heftel Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
comments or requests for additional information by the SEC with respect to the
Registration Statement.
5.9 STOCK EXCHANGE LISTING. Heftel shall cause the shares of
Heftel Common Stock to be issued in the Merger to be approved for listing on
Nasdaq, subject to official notice of issuance, prior to the Closing Date.
5.10 ADDITIONAL ARRANGEMENTS. Subject to the terms and conditions
herein provided, each of Parent, Tichenor and Heftel shall take, or cause to be
taken, all action and shall do, or cause to be done, all things necessary,
appropriate or desirable under the HSR Act, the Communications Act and any
other applicable laws and regulations or under applicable governing agreements
to consummate and make effective the transactions contemplated by this
Agreement, including using its reasonable efforts to obtain all necessary
waivers, consents and approvals and effecting all necessary registrations and
filings. Parent and Tichenor agree to commence, within 15 days after the date
hereof, the filing and approval process with the FCC with respect to the
transactions contemplated by this Agreement. Each of Parent, Tichenor and
Heftel shall use reasonable best efforts to take, or cause to be taken, all
action or shall do, or cause to be done, all things necessary, appropriate or
desirable to cause the covenants and conditions applicable to the transactions
contemplated hereby to be performed or satisfied as soon as practicable,
including all filings and approvals required by the FCC and the Communications
Act. If Closing does not occur within 20 days after the date of the FCC's
Final Order, each of Parent, Heftel and Tichenor agree to request approval from
the FCC to extend the Closing so that the Closing contemplated hereunder will
not violate any FCC rules or regulations. In addition, if any Governmental
Authority shall have issued any order, decree, ruling or injunction, or taken
any other action that would have the effect of restraining, enjoining or
otherwise prohibiting or preventing the consummation of the transactions
contemplated hereby, each of Tichenor and Heftel shall use its reasonable
efforts to have such order, decree, ruling or injunction or other action
declared ineffective as soon as practicable. Nothing contained in this
Agreement shall require Parent to take any action that would result in a
violation of Section 203 of the DGCL.
5.11 AGREEMENTS OF AFFILIATES. At least 30 days prior to the
Effective Time, Tichenor shall cause to be prepared and delivered to Heftel a
list identifying all Persons who, at the time of the approval of this Agreement
and the Merger by the shareholders of Tichenor, may be deemed to be
"affiliates" of Tichenor as that term is used in paragraphs (c) and (d) of Rule
145 under the Securities Act. Tichenor shall use its best efforts to cause
each Person who is identified as an affiliate of Tichenor in such list to
execute and deliver to Heftel, on or prior to the Closing Date, a written
agreement, in the form attached hereto as EXHIBIT 5.11 (if such Person has not
executed and delivered an agreement substantially to the same effect
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contemporaneously with the execution of this Agreement). Heftel shall be
entitled to place legends as specified in such agreements on the Heftel
Certificates representing any Heftel Common Stock to be issued to such Persons
in the Merger.
5.12 PUBLIC ANNOUNCEMENTS. Prior to the Closing, Tichenor and
Parent (and Heftel after consummation of the Assignment Agreement) will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any press release or make any such public statement prior to
obtaining the approval of the other party; provided, however, that such
approval shall not be required where such release or announcement is required
by applicable law; and provided further, that Tichenor, Parent or Heftel may
respond to inquiries by the press or others regarding the transactions
contemplated by this Agreement, so long as such responses are consistent with
such party's previously issued press releases.
5.13 NOTIFICATION OF CERTAIN MATTERS. Tichenor shall give prompt
notice to Parent (or Heftel after consummation of the Assignment Agreement) of
(a) any representation or warranty contained in Article 3 being untrue or
inaccurate when made, (b) the occurrence of any event or development that would
cause (or could reasonably be expected to cause) any representation or warranty
contained in Article 3 to be untrue or inaccurate on the Closing Date, or (c)
any failure of Tichenor to comply with or satisfy any covenant, condition, or
agreement to be complied with or satisfied by it hereunder. Parent shall give
prompt notice to Tichenor of (a) any representation or warranty made by Parent
in Section 4.1 being untrue or inaccurate when made, (b) the occurrence of any
event or development that would cause (or could reasonably be expected to
cause) any representation or warranty made by Parent in Section 4.1 to be
untrue or inaccurate on the Closing Date, or (c) any failure of Parent to
comply with or satisfy any covenant, condition, or agreement to be complied
with or satisfied by it hereunder. Heftel shall give prompt notice to Tichenor
of (a) any representation or warranty by Heftel contained in Section 4.2 being
untrue or inaccurate when made, (b) the occurrence of any event or development
that would cause (or could reasonably be expected to cause) any representation
or warranty by Heftel contained in Section 4.2 to be untrue or inaccurate on
the Closing Date, or (c) any failure of Heftel to comply with or satisfy any
covenant, condition, or agreement to be complied with or satisfied by it
hereunder.
5.14 PAYMENT OF EXPENSES. Each party hereto shall pay its own
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby, whether
or not the Merger shall be consummated, except that (a) the fee for filing the
Registration Statement with the SEC shall be borne by Heftel; (b) the costs and
expenses associated with printing the Proxy Statement/Prospectus shall be borne
by Heftel; and (c) the costs and expenses associated with mailing the Proxy
Statement/Prospectus to the stockholders of Heftel, and soliciting the votes of
the stockholders of Heftel, shall be borne by Heftel.
5.15 REGISTRATION RIGHTS AGREEMENT. Heftel, Parent and the Major
Tichenor Shareholders shall enter into a Registration Rights Agreement in the
form attached hereto as EXHIBIT 5.15 (the "REGISTRATION RIGHTS AGREEMENT"), at
the Closing.
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5.16 EMPLOYMENT AGREEMENT. Heftel and McHenry T. Tichenor, Jr.
shall enter into an Employment Agreement, in the form attached hereto as
EXHIBIT 5.16 (the "EMPLOYMENT AGREEMENT"), at the Closing.
5.17 STOCKHOLDERS AGREEMENT. Heftel and Parent shall enter into a
Stockholders Agreement, in the form attached hereto as EXHIBIT 5.17 (the
"STOCKHOLDERS AGREEMENT").
5.18 INDEMNITY AGREEMENT. Heftel shall enter into an Indemnity
Agreement (each, an "INDEMNITY AGREEMENT") in the form of EXHIBIT 5.18 hereto,
with each of Heftel Designees.
5.19 INSURANCE; INDEMNIFICATION.
(a) INSURANCE. Heftel shall cause the Surviving
Corporation to, at or immediately prior to the Effective Time, maintain a six
year director and officer liability insurance run-off policy from the same
carrier as the carrier providing such coverage to Tichenor at the Effective
Time and to not terminate such policy prior to the sixth anniversary of the
Effective Time. Heftel shall use its reasonable best efforts to maintain the
director and officer liability insurance policy for directors and officers of
Heftel as in effect as of the date hereof or such other director and officer
liability insurance policy containing terms and coverage reasonably acceptable
to Tichenor and Heftel, and such policy shall remain in full force and effect
immediately following the Effective Time.
(b) INDEMNIFICATION BY PARENT. Parent shall indemnify
and hold harmless (i) Tichenor, (ii) each Person who is, has been at any time
prior to the date hereof, or becomes prior to the Effective Time, an officer or
director of any of the Tichenor Companies, and (iii) each Person who is, has
been at any time prior to the date hereof or becomes prior to the Effective
Time a shareholder of Tichenor (collectively, the "TENDER OFFER INDEMNIFIED
PARTIES") against all losses, claims, damages, liabilities, costs or expenses
(including attorneys' fees), judgments and amounts paid in settlement
(collectively, "COSTS") in connection with any claim, action, suit, proceeding
or investigation by any Person other than any party hereto, any Tender Offer
Indemnified Party or their respective Affiliates arising out of or pertaining
to acts, omissions, misstatements or omissions of material facts, or alleged
acts or omissions, or alleged misstatements or omissions of material facts, by
Tichenor or by such officer, director or shareholder acting in such capacity of
any of the Tichenor Companies, which acts, omissions, misstatements or
omissions of material facts, relate to the Heftel Acquisition; provided,
however, that Parent shall be under no obligation to indemnify any Tender Offer
Indemnified Party pursuant to this Section 5.19(b) for any Costs resulting from
the gross negligence or willful misconduct of the Tender Offer Indemnified
Party.
(c) INDEMNIFICATION BY HEFTEL. From and after the
Effective Time, Heftel shall indemnify and hold harmless (i) each Person who
is, has been at any time prior to the date hereof, or becomes prior to the
Effective time, an officer or director of any of the Tichenor Companies, and
(ii) each Person who is, has been at any time prior to the date hereof or
becomes prior to the Effective Time a shareholder of Tichenor (collectively,
the "MERGER INDEMNIFIED PARTIES" and, together with the Tender Offer
Indemnified Parties, the "INDEMNIFIED PARTIES") against all Costs in connection
with any claim, action, suit, proceeding or investigation by any Person other
than any party hereto, any Indemnified Party or their respective Affiliates
arising
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out of or pertaining to acts, omissions, misstatements or omissions of material
facts, or alleged acts or omissions or alleged misstatements or omissions of
material facts, by him acting in his capacity as an officer, director or
shareholder of any of the Tichenor Companies, which acts, omissions,
misstatements or omissions of material facts, relate to the Merger or the Proxy
Statement/Prospectus; provided, however, that Heftel shall be under no
obligation to indemnify any Merger Indemnified Party pursuant to this Section
5.19(c) for any Costs resulting from the gross negligence or willful misconduct
of the Merger Indemnified Party or (y) information provided by the Merger
Indemnified Party for inclusion in the Proxy Statement/Prospectus.
(d) INDEMNIFICATION PROCEDURES. The procedures
associated with the indemnification set forth in Sections 5.19(b) and (c) shall
be as follows:
(i) Promptly after receipt by an Indemnified
Party of notice of the commencement of any action, suit or
proceeding, such Indemnified Party shall, if a claim in
respect of Section 5.19(b) or (c) is to be made against Parent
or Heftel, as the case may be (the "INDEMNIFYING PARTY"),
under this Agreement, notify the Indemnifying Party of the
commencement thereof. With respect to any such action, suit
or proceeding as to which an Indemnified Party notifies the
Indemnifying Party of the commencement thereof:
(A) Except as otherwise provided below, to the
extent that it may wish, the Indemnifying Party shall
be entitled to assume the defense thereof and to
employ counsel chosen by it. After notice from the
Indemnifying Party to the Indemnified Party of its
election to so assume the defense thereof, the
Indemnifying Party shall not be liable to the
Indemnified Party under this Agreement for any legal
or other expenses subsequently incurred by the
Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation
or as otherwise provided below. The Indemnified
Party shall have the right to employ counsel of his
or its own choosing in such action, suit or
proceeding but the fees and expenses of such counsel
incurred after notice from the Indemnifying Party of
assumption by the Indemnifying Party of the defense
thereof shall be at the expense of the Indemnified
Party unless (x) the employment of counsel by the
Indemnified Party has been specifically authorized by
the Indemnifying Party, such authorization to be
conclusively established by action by disinterested
members of the board of directors of the Indemnifying
Party; (y) representation by the same counsel of both
the Indemnified Party and the Indemnifying Party
would, in the reasonable judgment of either of the
Indemnified Party or the Indemnifying Party, be
inappropriate due to an actual or potential conflict
of interest between the Indemnifying Party and the
Indemnified Party in the conduct of the defense of
such action, such conflict of interest to be
conclusively established by an opinion of counsel to
either the Indemnifying Party or the Indemnified
Party to such effect; or (z) the Indemnifying Party
shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the
fees and expenses of counsel shall be paid by the
Indemnifying Party. Notwithstanding the foregoing,
if an insurance company has supplied
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directors' and officers' liability insurance covering
an action, suit or proceeding, then such insurance
company shall employ counsel to conduct the defense
of such action, suit or proceeding unless the
Indemnified Party and the Indemnifying Party
reasonably concur in writing that such counsel is
unacceptable.
(B) The Indemnified Party shall cooperate with
the Indemnifying Party in all aspects of the conduct
of the defense of any action and in connection
therewith shall, among other things, make its books,
records, executive officers, representatives and
agents available as reasonably requested or required
by the Indemnifying Party.
(C) The Indemnifying Party shall not be liable to
indemnify the Indemnified Party under Section 5.19(b)
or (c) for any amounts paid in settlement of any
action or claim effected without its written consent.
The Indemnifying Party may settle any action or claim
without the consent of the Indemnified Party provided
that such settlement would not impose any liability,
penalty or limitation on the Indemnified Party and
that the parties bringing such claim release the
Indemnified Party from all liability relating to such
claim in connection with such settlement. Neither
the Indemnifying Party nor the Indemnified Party
shall unreasonably withhold consent to any proposed
settlement.
(ii) The Indemnifying Party shall not be liable to
make any payment under Sections 5.19(b) or (c) of this
Agreement in connection with any action, suit or proceeding
against the Indemnified Party to the extent the Indemnified
Party has otherwise received payment of the amounts otherwise
payable by the Indemnifying Party hereunder.
(iii) In the event the Indemnifying Party makes any
payment under this Agreement, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights of
recovery of the Indemnified Party with respect thereto, and
the Indemnified Party shall execute all agreements,
instruments, certificates or other documents and do or cause
to be done all things necessary or appropriate to secure such
recovery rights to the Indemnifying Party including, without
limitation, executing such documents as shall enable the
Indemnifying Party to bring an action or suit to enforce such
recovery rights.
(iv) The provisions of this Section 5.19 are
intended to be for the benefit of, and shall be enforceable
by, the parties hereto and each Indemnified Party and their
respective Affiliates and each of their respective heirs and
representatives.
5.20 PARENT REGISTRATION RIGHTS AGREEMENT. Heftel and Parent shall
enter into a Registration Rights Agreement in the form attached hereto as
EXHIBIT 5.20 (the "PARENT REGISTRATION RIGHTS AGREEMENT"), at or prior to
Closing, and the Parent Registration Rights Agreement shall be in full force
and effect on the Closing Date.
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5.21 OPTION TRANSACTION. Parent and Heftel shall take all actions
necessary to consummate the Option Transaction on the Closing Date immediately
subsequent to the Closing.
5.22 COMPOSITION OF THE BOARD OF DIRECTORS. Immediately prior to
the Effective Time, Heftel will take such actions necessary such that five
designees of Tichenor (such designees being herein referred to as the "HEFTEL
DESIGNEES") shall constitute the entire Board of Directors of Heftel
immediately after the Effective Time; provided, that each Heftel Designee shall
consent to his designation and provide Heftel for inclusion in the Proxy
Statement/Prospectus such information concerning himself as is required to
comply with the Securities Act and the rules and regulations promulgated
thereunder.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction, at or prior to the Closing Date, of the following
conditions:
(a) COMPLETION OF HEFTEL ACQUISITION. Parent shall have
consummated the Heftel Acquisition.
(b) HEFTEL AND HEFTEL SUB BOARD APPROVAL. The boards of
directors of each of Heftel and Heftel Sub shall have approved the Merger and
this Agreement and have executed the Assignment Agreement, and such approval
shall be in full force and effect at the Closing.
(c) SHAREHOLDER APPROVAL. The Merger and this Agreement
shall have been duly and validly approved and adopted by the shareholders of
Tichenor, and the Heftel Proposal shall have been duly and validly approved and
adopted by the shareholders of Heftel and Heftel Sub, all as required by the
TBCA, the DGCL (to the extent necessary to exempt such transactions from the
provisions of Section 203 thereof), Nasdaq and the charter and bylaws of
Tichenor, Heftel and Heftel Sub.
(d) OTHER APPROVALS. The waiting period applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated and all filings required to be made prior to the Effective Time
with, and all consents, approvals, permits and authorizations required to be
obtained prior to the Effective Time from the FCC or any other Governmental
Authority in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by Tichenor, Parent,
Heftel and Heftel Sub shall have been made or obtained (as the case may be),
except where the failure to obtain such consents, approvals, permits and
authorizations would not be reasonably likely to result in a Material Adverse
Effect on Heftel (assuming the Merger has taken place) or to materially
adversely affect the consummation of the Merger.
(e) SECURITIES LAW MATTERS. The Registration Statement
shall have been declared effective by the SEC under the Securities Act and
shall be effective at the Effective Time, and no stop order suspending such
effectiveness shall have been issued, no action, suit,
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proceeding or investigation by the SEC to suspend such effectiveness shall have
been initiated and be continuing, and all necessary approvals under state
securities laws relating to the issuance or trading of the Heftel Common Stock
to be issued in the Merger shall have been received.
(f) NO INJUNCTIONS OR RESTRAINTS. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided,
however, that prior to invoking this condition, each party shall have complied
fully with its obligations under Section 5.9 and, in addition, shall use all
reasonable efforts to have any such decree, ruling, injunction or order
vacated, except as otherwise contemplated by this Agreement.
(g) ACCOUNTANTS' LETTER. Heftel and Tichenor shall have
received a letter from a nationally recognized firm of independent public
accountants, immediately prior to the Effective Date, in form and substance
reasonably satisfactory to Heftel, dated as of the Effective Date and addressed
to Heftel and Tichenor, which letter shall address matters as are customary for
transactions similar to those contemplated in this Agreement.
(h) FCC LICENSES. All FCC licenses, approvals and
authorizations contemplated by this Agreement shall have been granted and shall
have become final (except that the requirement that such licenses, approvals
and authorizations be final may be waived by Heftel and Tichenor).
6.2 CONDITIONS TO OBLIGATIONS OF PARENT, HEFTEL AND HEFTEL SUB.
The obligations of Parent (or Heftel and Heftel Sub upon consummation of the
Assignment Agreement pursuant to Section 8.9) to effect the Merger are subject
to the satisfaction of the following conditions, any or all of which may be
waived in whole or in part by Parent (or Heftel and Heftel Sub, as the case may
be):
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Tichenor set forth in Article 3 shall be true and correct as
of the Closing Date as though made on and as of that time, and Heftel shall
have received a certificate signed by the chief executive officer or chief
financial officer of Tichenor to such effect; provided, however, that this
Section 6.2(a) shall be deemed to have been satisfied even if such
representations and warranties are not true and correct, unless the failure of
any such representations and warranties to be so true and correct would have a
Material Adverse Effect on Tichenor.
(b) PERFORMANCE OF COVENANTS AND AGREEMENTS BY TICHENOR.
Tichenor shall have performed in all material respects all covenants and
agreements required to be performed by it under this Agreement at or prior to
the Closing Date, and Heftel shall have received a certificate signed by the
chief executive officer or chief financial officer of Tichenor to such effect.
(c) LETTERS FROM TICHENOR AFFILIATES. Heftel shall have
received from each Person named in the list referred to in Section 5.11 an
executed copy of the agreement described in Section 5.11.
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(d) NO ADVERSE CHANGE. From the date of this Agreement
through the Closing, there shall not have occurred any change in the condition
(financial or otherwise), operations or business of any of the Tichenor
Companies that would have or would be reasonably likely to result in a Closing
Material Adverse Effect on Tichenor.
(e) FAIRNESS OPINION. The fairness opinion described in
Section 5.6(a) shall not have been withdrawn, revoked, or modified.
(f) STOCKHOLDERS AGREEMENT. The Major Tichenor
Shareholders shall have executed the Stockholders Agreement, which shall be in
full force and effect on the Closing Date.
(g) EMPLOYMENT AGREEMENT. McHenry T. Tichenor, Jr. shall
have executed the Employment Agreement, which shall be in full force and effect
on the Closing Date.
(h) WARRANT HOLDER AGREEMENT. The holder of the Tichenor
Warrant and Tichenor shall have executed an agreement, dated as of the date
hereof, pursuant to which such holder shall, among other things, agree (i)
neither to exercise (except as set forth in such agreement) nor transfer the
Tichenor Warrant at any time on or prior to the Effective Time and (ii) to
exchange such Tichenor Warrant pursuant to this Agreement, and such agreement
shall be in full force and effect on the Closing Date.
(i) AGREEMENT WITH SHAREHOLDER. Prime II Management,
L.P., a Delaware limited partnership, and PrimeComm, L.P., a Delaware limited
partnership (together, "PrimeComm") shall have executed an agreement, dated the
date hereof, pursuant to which PrimeComm, among other things, consents to the
Merger and the Merger Agreement and agrees (a) not to transfer its Common Stock
and (b) that its rights and obligations under certain agreements with Tichenor
shall terminate at the Effective Time, and such agreement shall be in full
force and effect on the Closing Date.
(j) DISSENTING SHAREHOLDERS. Holders of not more than
three percent (3%) of any outstanding class of Tichenor capital stock (Tichenor
Common Stock, Tichenor Junior Preferred and Tichenor Senior Preferred) shall
have exercised their right to dissent from the Merger under the TBCA.
(k) HEFTEL ACQUISITION. At least six months and one day
shall have passed subsequent to the consummation of the Heftel Acquisition.
6.3 CONDITIONS TO OBLIGATION OF TICHENOR. The obligation of
Tichenor to effect the Merger is subject to the satisfaction of the following
conditions, any or all of which may be waived in whole or in part by Tichenor:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Parent, Heftel and Heftel Sub set forth in Article 4 shall be
true and correct as of the Closing Date as though made on and as of that time,
and Tichenor shall have received a certificate signed by the chief executive
officer or the chief financial officer of Parent to such effect with regard to
the representations and warranties of Parent contained in Section 4.1 and of
Heftel to such effect with regard to the representations and warranties of
Heftel and Heftel Sub contained in
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Section 4.2; provided, however, that this Section 6.3(a) shall be deemed to
have been satisfied even if such representations and warranties are not true
and correct, unless the failure of any such representations and warranties to
be so true and correct would have a Material Adverse Effect on Heftel.
(b) PERFORMANCE OF COVENANTS AND AGREEMENTS BY PARENT.
Parent shall have performed in all material respects all covenants and
agreements required to be performed by them under this Agreement at or prior to
the Closing Date, and Tichenor shall have received a certificate signed by the
chief executive officer or the chief financial officer of Parent to such
effect.
(c) PERFORMANCE OF COVENANTS AND AGREEMENTS BY HEFTEL AND
HEFTEL SUB. Heftel and Heftel Sub shall have performed in all material
respects all covenants and agreements required to be performed by them under
this Agreement at or prior to the Closing Date, and Tichenor shall have
received a certificate signed by the chief executive officer or the chief
financial officer of Heftel to such effect.
(d) NO ADVERSE CHANGE. From the date hereof through the
Closing, there shall not have occurred any change in the condition (financial
or otherwise), operations or business of Heftel that would have or would be
reasonably likely to result in a Closing Material Adverse Effect on Heftel.
(e) NASDAQ LISTING. The shares of Heftel Common Stock
issuable pursuant to the Merger shall have been authorized for listing on
Nasdaq, subject to official notice of issuance.
ARTICLE 7
TERMINATION
7.1 TERMINATION RIGHTS. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) Automatically pursuant to Section 8.9;
(b) By mutual written consent of Parent and Tichenor
prior to the consummation of the Assignment Agreement or of Heftel and Tichenor
thereafter;
(c) By either Tichenor or Parent (or Heftel after
consummation of the Assignment Agreement) if (i) the Merger has not been
consummated by March 31, 1997 (provided, however, that the right to terminate
this Agreement pursuant to this clause (i) shall not be available to any party
whose breach of any representation or warranty or failure to perform any
covenant or agreement under this Agreement has been the cause of or resulted in
the failure of the Merger to occur on or before such date); (ii) any
Governmental Authority shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action shall
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have become final and nonappealable (provided, however, that the right to
terminate this Agreement pursuant to this clause (ii) shall not be available to
any party until such party has used all reasonable efforts to remove such
injunction, order or decree); or (iii) if the Heftel Proposal shall fail to
receive the requisite vote for approval at the Heftel Meeting;
(d) By Parent (or Heftel after consummation of the
Assignment Agreement) if (i) there has been a breach of the representations and
warranties made by Tichenor in Article 3 of this Agreement which will have a
Material Adverse Effect on Tichenor (provided, however, that Parent (or Heftel
after consummation of the Assignment Agreement) shall not be entitled to
terminate this Agreement pursuant to this clause (i) unless Parent (or Heftel
after consummation of the Assignment Agreement) has given Tichenor at least 30
days prior notice of such breach, Tichenor has failed to cure such breach
within such 30-day period, and the condition described in Section 6.2(a), other
than the provision thereof relating to the certificate signed by the chief
executive officer or chief financial officer of Tichenor, would not be
satisfied if the Closing were to occur on the day on which Parent (or Heftel
after consummation of the Assignment Agreement) gives Tichenor notice of such
termination); or (ii) Tichenor has failed to comply in any material respect
with any of its covenants or agreements contained in this Agreement and such
failure has not been, or cannot be, cured within a reasonable time after notice
and demand for cure thereof;
(e) By Tichenor if (i) there has been a breach of the
representations and warranties made by Parent in Section 4.1 of this Agreement
which will have a Material Adverse Effect on Tichenor (provided, however, that
Tichenor shall not be entitled to terminate this Agreement pursuant to this
clause (i) unless Tichenor has given Parent at least 30 days prior notice of
such breach, Parent has failed to cure such breach within such 30-day period,
and the condition described in Section 6.3(a), other than the provision thereof
relating to the certificate signed by the chief executive officer or chief
financial officer of Parent, would not be satisfied if the Closing were to
occur on the day on which Tichenor gives Parent notice of such termination);
(ii) there has been a breach of the representations and warranties made by
Heftel and Heftel Sub in Section 4.2 of this Agreement (provided, however, that
Tichenor shall not be entitled to terminate this Agreement pursuant to this
clause (i) unless Tichenor has given Heftel at least 30 days prior notice of
such breach, Heftel has failed to cure such breach within such 30-day period,
and the condition described in Section 6.3(a), other than the provision thereof
relating to the certificate signed by the chief executive officer or chief
financial officer of Heftel, would not be satisfied if the Closing were to
occur on the day on which Tichenor gives Heftel notice of such termination);
(iii) Parent, Heftel or Heftel Sub has failed to comply in any material respect
with any of its respective covenants or agreements contained in this Agreement,
and, in either such case, such breach or failure has not been, or cannot be,
cured within a reasonable time after notice and a demand for cure thereof; or
(iv) if prior to the execution of the Assignment Agreement but subsequent to
the consummation of the Heftel Acquisition, Heftel would have failed to comply
in any material respect with any of its covenants or agreements under this
Agreement had the Assignment Agreement been executed at the time of such
failure to comply, and, in either such case, such breach or failure has not
been, or cannot be, cured within a reasonable time after notice and a demand
for cure thereof;
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(f) By Tichenor if, subsequent to the consummation of the
Heftel Acquisition, the aggregate number of shares of Heftel Common Stock owned
by Parent and its Affiliates is more than 90% of the Heftel Common Stock then
outstanding;
(g) By Tichenor if, prior to consummation of the
Assignment Agreement, Heftel breaches any covenant contained in the Tender
Offer Agreement which will result in a Material Adverse Effect on Heftel; and
(h) Automatically upon termination of the Tender Offer
Agreement prior to the consummation of the Heftel Acquisition.
7.2 EFFECT OF TERMINATION. If this Agreement is terminated by
either Tichenor or Parent (or Heftel after consummation of the Assignment
Agreement) pursuant to the provisions of Section 7.1, this Agreement shall
forthwith become void except for, and there shall be no further obligation on
the part of any party hereto or its respective Affiliates, directors, officers,
or shareholders, except pursuant to, the provisions of Sections 5.4(i), 5.14,
5.19(b) and (d), Article 8 and any confidentiality agreement between any of the
parties hereto (which shall continue pursuant to their terms). The parties
acknowledge that the sole and exclusive remedy of any party to this Agreement
with respect to a breach of a representation or warranty contained herein shall
be the right to terminate this Agreement in accordance with and subject to the
provisions of this Section 7; provided, however, that a termination of this
Agreement shall not relieve any party hereto from any liability for damages
incurred as a result of a breach by such party of its covenants hereunder
occurring prior to such termination other than those covenants contained in
Sections 5.1(c), 5.2(j) and 5.3(j), and the provisions of Section 5.13
regarding notification of inaccuracies with respect to representations and
warranties and the occurrence events or developments that could cause (or could
reasonably be expected to cause) any representation or warranty contained in
this Agreement to be untrue or inaccurate on the Closing Date. Each party
hereby covenants never to institute, directly or indirectly, any action or
proceeding of any kind against any other party hereto based on or arising out
of, or in any manner related to, the breach of a representation or warranty
contained herein or the covenants contained in Sections 5.1(c), 5.2(j) or
5.3(j) or the provisions of Sections 5.13 referenced in the immediately
preceding sentence.
ARTICLE 8
MISCELLANEOUS
8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties contained in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the consummation of the
Merger.
8.2 AMENDMENT. This Agreement may be amended by the parties
hereto at any time before or after approval of the Merger and this Merger
Agreement by the shareholders of Tichenor; provided, however, that after any
such approval, no amendment shall be made that by law requires further approval
by such shareholders without such further approval. This
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Agreement may not be amended except by a written instrument signed on behalf of
each of the parties hereto.
8.3 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
(a) If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall T. Mays (facsimile transmission
number: 210-822-2299), with a copy (which shall not constitute notice) to
Akin, Gump, Strauss, Hauer & Feld, L.L.P., NationsBank Plaza, 300 Convent
Street, Suite 1500, San Antonio, TX 78205, Attention: Stephen C. Mount
(facsimile transmission number: 210-224-2035).
(b) If to Tichenor: 100 Crescent Court, Suite 1777,
Dallas, Texas 75201, Attention: McHenry T. Tichenor, Jr. (facsimile
transmission number: (214) 855-8881), with a copy (which shall not constitute
notice) to Michael D. Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow
Center, 2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission number:
214-220-7716).
8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more 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.
8.5 SEVERABILITY. Any term or provision of this Agreement that 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. If 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.
8.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (together with the confidentiality agreements and the documents and
instruments delivered by the parties in connection with this Agreement) (a)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof; and (b) except as provided in Article 2 and Section
5.19, is solely for the benefit of the parties hereto and their respective
successors, legal representatives and permitted assigns and does not confer on
any other person any rights or remedies hereunder. Furthermore, Heftel and
Heftel Sub shall have no rights or obligations under this Agreement until such
time as the Assignment Agreement has been consummated.
8.7 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE
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LAWS OF THE STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN
UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8.8 NO REMEDY IN CERTAIN CIRCUMSTANCES. Each party agrees that,
should any court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth herein shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of this
Agreement or makes this Agreement impossible to perform, in which case this
Agreement shall terminate pursuant to Article 7. Except as otherwise
contemplated by this Agreement, to the extent that a party hereto took an
action inconsistent herewith or failed to take action consistent herewith or
required hereby pursuant to an order or judgment of a court or other competent
Governmental Authority, such party shall not incur any liability or obligation
unless such party breached its obligations under Section 5.9 or did not in good
faith seek to resist or object to the imposition or entering of such order or
judgment.
8.9 ASSIGNMENT.
(a) ASSIGNMENT BY TICHENOR. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
Tichenor (whether by operation of law or otherwise) without the prior written
consent of the other parties.
(b) ASSIGNMENT BY PARENT. Within ten (10) business days
of the consummation of the Heftel Acquisition, Parent shall submit this
Agreement to Heftel and Heftel Sub for approval and execution of an agreement
in the form attached hereto as EXHIBIT 8.9 (the "ASSIGNMENT AGREEMENT")
pursuant to which Heftel and Heftel Sub will agree that the terms and
provisions of this Agreement relating to them shall be binding upon them as if
Heftel and Heftel Sub were original parties to this Agreement. Promptly after
such submission, the board of directors of each of Heftel and Heftel Sub shall,
in their own independent exercise of their respective fiduciary obligations,
either approve the Merger and submit the Heftel Proposal to the stockholders of
Heftel for approval and the Merger and this Agreement to the shareholders of
Heftel Sub for their approval, or reject the Merger, in which case this
Agreement shall terminate without liability to any party hereto except to the
extent expressly otherwise provided herein. Subject to the boards of directors
of Heftel and Heftel Sub exercising their respective fiduciary obligations with
respect to their approval or rejection of the Merger, the exercise of which
shall be made solely by such boards of directors, Parent shall use its
reasonable efforts to cause Heftel and Heftel Sub to consummate the Merger.
Upon execution of the Assignment Agreement by Heftel and Heftel Sub, all
parties hereto shall be deemed to have accepted the assumption of obligations
and rights by Heftel and Heftel Sub and no other action on the part of any such
party is intended to be required; provided that all parties hereto shall
execute such instruments and otherwise provide such cooperation as shall
reasonably be requested by Parent to implement such assignment. Subject to the
foregoing, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
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8.10 INDEMNIFICATION FOR NEGLIGENCE. THE INDEMNITIES CONTAINED IN
SECTION 5.19(B) AND (C) SHALL EXTEND TO THE INDEMNIFIED PARTIES NOTWITHSTANDING
THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER,
WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING
WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE
RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTES OR BY
REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE
COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT, THIS CONTRACTUAL
OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE
PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER
THAN THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE INDEMNIFIED PARTY.
8.11 CONFIDENTIALITY AGREEMENTS. Any confidentiality agreement
between any of the parties hereto shall remain in full force and effect
following the execution of this Agreement until terminated as described in
Section 7.2, is hereby incorporated herein by reference and shall constitute a
part of this Agreement for all purposes; provided, however, that any standstill
provisions contained therein will, effective as of the Closing, be deemed to
have been waived to the extent necessary for the parties to consummate the
Merger in accordance with the terms of this Agreement.
8.12 WAIVERS. At any time prior to the Effective Time, the parties
hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
performance of any of the covenants or agreements, or satisfaction of any of
the conditions, contained herein. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. Except as provided in this
Agreement, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereof shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provisions hereof.
8.13 INCORPORATION. Exhibits and Schedules referred to herein are
attached to and by this reference incorporated herein for all purposes.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives, on the date first written
above.
"Tichenor" "Parent"
TICHENOR MEDIA SYSTEM, INC. CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ MCHENRY T. TICHENOR, JR. By: /s/ RANDALL MAYS
----------------------------- ---------------------------------
Name: McHenry T. Tichenor, Jr. Name: Randall Mays
Title: President Title: Vice President
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EXHIBIT 1.1(A)
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
HEFTEL BROADCASTING CORPORATION
1. Name. The name of the Corporation is Heftel Broadcasting
Corporation.
2. Registered Office. The address of its registered office in
the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of its registered agent at
such address is The Corporation Trust Company.
3. Business. The nature of the business or purpose of the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
4. Capital Structure.
4.1 Authorized Shares. The total number of shares of
capital stock which the Corporation shall have authority to issue is
105,000,000 shares, consisting of three classes of capital stock:
(a) 50,000,000 shares of Class A Common Stock,
par value $.001 per share (the "Class A Shares");
(b) 50,000,000 shares of Class B Common Stock,
par value $.001 per share (the "Class B Shares" and, together with the Class A
Shares, the "Common Shares"); and
(c) 5,000,000 shares of Preferred Stock, par
value $.001 per share (the "Preferred Stock").
4.2 Designations, Preferences, etc.
(a) Preferred Stock. The Preferred Stock may be
issued in one or more series. The provisions of this Paragraph 4.2 are subject
to the provisions of Paragraph 5.10 hereof. The Corporation's Board of
Directors is authorized, subject to limitations prescribed by law, to provide
for the issuance of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, to determine the powers, designations, preferences and relative,
participating, optional or other special rights, including voting rights, and
the qualifications, limitations or restrictions thereof, of each series of
Preferred Stock and may increase or decrease the number of shares within each
such series; provided, however, that the Corporation's Board of Directors may
not decrease the number of
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shares within a series to less than the number of shares within such series
that are then outstanding and may not increase the number of shares within a
series above the total number of authorized shares of Preferred Stock for which
the powers, designations, preferences and rights have not otherwise been set
forth herein. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of the following:
(i) The number of shares constituting that series
and the distinctive designation of that series;
(ii) The dividend rate on the shares of that
series, whether dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of dividends on
shares of that series;
(iii) Whether that series shall have voting rights,
in addition to the voting rights provided by law, and, if so, the terms of such
voting rights;
(iv) Whether that series shall have conversion
privileges, and, if so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events as the Board of
Directors shall determine;
(v) Whether or not the shares of that series
shall be redeemable, and if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be redeemable, and
the amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
(vi) Whether that series shall have a sinking fund
for the redemption or purchase of shares of that series, and, if so, the terms
and amount of such sinking fund; and
(vii) The rights of the shares of that series in
the event of voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, and the relative rights of priority, if any, of payment of
shares of that series.
(b) Common Shares. The designations,
preferences, powers, qualifications and privileges of the Common Shares shall
be as set forth in Article Five below.
5. Common Shares.
5.1 Identical Rights. Except as herein otherwise
expressly provided in this Article Five, all Common Shares shall be identical
and shall entitle the holders thereof to the same rights and privileges.
5.2 Dividends.
(a) When, as, and if dividends are declared by
the Corporation's Board of Directors, whether payable in cash, property,
securities or rights of the Corporation or any other entity, the holders of
Common Shares shall be entitled to share equally in and to receive, in
accordance with the number of Common Shares held by each such holder, all such
dividends, except that if dividends are payable in Common Shares, such stock
dividends shall be payable
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at the same rate on each class of Common Shares and shall be payable only in
Class A Shares to holders of Class A Shares and in Class B Shares to holders of
Class B Shares.
(b) Dividends payable under this Paragraph 5.2
shall be paid to the holders of record of the outstanding Common Shares as
their names shall appear on the stock register of the Corporation on the record
date fixed by the Board of Directors in advance of declaration and payment of
each dividend. Any Common Shares issued as a dividend pursuant to this
Paragraph 5.2 shall, when so issued, be duly authorized, validly issued, fully
paid and non- assessable, and free of all liens and charges. The Corporation
shall not issue fractions of Common Shares on payment of such dividend but
shall issue a whole number of shares to such holder of Common Shares rounded up
or down in the Corporation's sole discretion to the nearest whole number,
without compensation to the stockholder whose fractional share has been rounded
down or from any stockholder whose fractional share has been rounded up.
5.3 Stock Splits. The Corporation shall not in any
manner subdivide (by any stock split, reclassification, stock dividend,
recapitalization or otherwise) or combine the outstanding shares of one class
of Common Shares unless the outstanding shares of all classes of Common Shares
shall be proportionately subdivided or combined.
5.4 Liquidation Rights. Upon any voluntary or
involuntary liquidation, dissolution or winding-up of the affairs of the
Corporation, after payment shall have been made to holders of outstanding
Preferred Stock, if any, of the full amount to which they are entitled pursuant
to this Second Restated Certificate of Incorporation and any resolutions that
may be adopted from time to time by the Corporation's Board of Directors (for
the purpose of fixing the designations, preferences, rights and restrictions of
any series of Preferred Stock), the holders of Common Shares shall be entitled
to share ratable in accordance with the number of Common Shares held by each
such holder, in all remaining assets of the Corporation available for
distribution among the holders of Common Shares, whether such assets are
capital, surplus or earnings. For purposes of this Paragraph 5.4, neither the
consolidation or merger of the Corporation with or into any other corporation
or corporations pursuant to which the stockholders of the Corporation receive
capital stock and/or other securities (including debt securities) of the
acquiring corporation (or of the direct or indirect parent corporation of the
acquiring corporation), nor the sale, lease or transfer by the Corporation of
all or any part of its assets, nor the reduction of the capital stock of the
Corporation, shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation as those terms are used in this
Paragraph 5.4.
5.5 Voting Rights. The holders of the Class A Shares
shall vote on all matters submitted to a vote of the stockholders, with each
Class A Share entitled to one vote. The holders of Class B Shares shall have no
voting rights, except as provided in Paragraph 5.10 and as otherwise provided
by law. The holders of Common Shares are not entitled to cumulate votes in the
election of any directors.
5.6 No Preemptive or Subscription Rights. No holder of
Common Shares shall be entitled to preemptive or subscription rights.
5.7 Conversion Rights.
3
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(a) Automatic Conversion of Class B Shares. Each
Class B Share shall convert automatically into one fully paid and
non-assessable Class A Share upon its sale, gift or other transfer to a person
or entity other than Clear Channel Communications, Inc., a Texas corporation
("CCC") or an Affiliate of CCC (an "Event of Automatic Conversion"). For
purposes of this Article 5, an "Affiliate of CCC" shall mean (i) any
corporation of which CCC is, directly or indirectly, the beneficial owner of
50% or more of the combined voting power of all classes of equity securities,
(ii) any partnership, joint venture or unincorporated organization for which
CCC possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies, whether through the ownership of
voting securities, by contract or otherwise or (iii) any person or other entity
that controls, is controlled by, or is under common control with CCC.
Notwithstanding anything to the contrary set forth
herein, any holder of Class B Common Stock may pledge his shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee without causing an
automatic conversion into Class A Common Stock. In the event of foreclosure or
other similar action by a pledgee, such pledged shares of Class B Common Stock
shall be converted automatically, without any act or deed on the part of the
Corporation or any other person, into shares of Class A Common Stock as
provided in this Paragraph 5.7, unless such foreclosure or similar action is
taken by CCC or an Affiliate of CCC.
(b) Automatic Conversion Procedure. Promptly
upon the occurrence of an Event of Automatic Conversion, the holder of Class B
Shares shall surrender the certificate or certificates therefor, duly endorsed
in blank or accompanied by proper instruments of transfer, at the office of the
Corporation, or of any transfer agent for the Class A Shares, and shall give
written notice to the Corporation, at such office: (i) stating that the shares
are being converted pursuant to an Event of Automatic Conversion into Class A
Shares as provided in Paragraph 5.7(a), (ii) specifying the Event of Automatic
Conversion (and, if the occurrence of such event is within the control of the
transferor, stating the transferor's intent to effect an Event of Automatic
Conversion), (iii) identifying the number of Class B Shares being converted,
and (iv) setting out the name or names (with addresses) and denominations in
which the certificate or certificates for Class A Shares shall be issued and
shall include instructions for delivery thereof. Delivery of such notice
together with the certificates representing the Class B Shares shall obligate
the Corporation or its transfer agent to issue and deliver at such stated
address to such stated transferee a certificate or certificates for the number
of Class A Shares to which such transferee is entitled, registered in the name
of such transferee.
To the extent permitted by law, conversion pursuant
to an Event of Automatic Conversion shall be deemed to have been effected as of
the date on which the Event of Automatic Conversion occurred (such time being
the "Conversion Time"). The person entitled to receive the Class A Shares
issuable upon such conversion shall be treated for all purposes as the record
holder of such Class A Shares at and as of the Conversion Time, and the right
of such person as a holder of Class B Shares shall cease and terminate at and
as of the Conversion Time, in each case without regard to any failure by the
holder to deliver the certificates or the notice required by this subparagraph
(b).
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(c) Voluntary Conversion of Class B Shares. Each
Class B Share shall be convertible, at the option of its holder, into one fully
paid and non-assessable Class A Share at any time.
(d) Voluntary Conversion Procedure for Class B
Shares. At the time of a voluntary conversion, the holder of Class B Shares
shall deliver to the office of the Corporation or any transfer agent for the
Class A Shares (i) the certificate or certificates representing the Class B
Shares to be converted, duly endorsed in blank or accompanied by proper
instruments of transfer, and (ii) written notice to the Corporation stating
that such holder elects to convert such share or shares and stating the name
and addresses in which each certificate for Class A Shares is to be issued.
Conversion shall be deemed to have been effected at the close of business on
the date the Corporation received the Class B Shares to be converted and such
notice, and the person exercising such voluntary conversion shall be deemed to
be the holder of record of the number of Class A Shares issuable upon such
conversion at such time. The Corporation shall promptly deliver certificates
evidencing the appropriate number of Class A Shares to the person set forth in
the notice.
(e) Voluntary Conversion of Class A Shares. Each
Class A Share held by CCC or any Affiliate of CCC shall be convertible, at the
option of its holder, into one fully paid and non-assessable Class B Share at
any time.
(f) Voluntary Conversion Procedure for Class A
Shares. At the time of a voluntary conversion, the holder of Class A Shares
shall deliver to the office of the Corporation or any transfer agent for the
Class B Shares (i) the certificate or certificates representing the Class A
Shares to be converted, duly endorsed in blank or accompanied by proper
instruments of transfer, and (ii) written notice to the Corporation stating
that such holder elects to convert such share or shares and stating the name
and addresses in which each certificate for Class B Shares is to be issued.
Conversion shall be deemed to have been effected at the close of business on
the date the Corporation received the Class A Shares to be converted and such
notice, and the person exercising such voluntary conversion shall be deemed to
be the holder of record of the number of Class B Shares issuable upon such
conversion at such time. The Corporation shall promptly deliver certificates
evidencing the appropriate number of Class B Shares to the person set forth in
the notice.
(g) Unconverted Shares. In the event of the
conversion of less than all of the Class B Shares evidenced by a certificate
surrendered to the Corporation in accordance with the procedures of Paragraph
5.7(b) or 5.7(d), the Corporation shall execute and deliver to, or upon the
written order of the holder of such certificate, without charge to such holder,
a new certificate evidencing the number of Class B Shares not converted. In
the event of the conversion of less than all of the Class A Shares evidenced by
a certificate surrendered to the Corporation in accordance with the procedures
of Paragraph 5.7(f), the Corporation shall execute and deliver to, or upon the
written order of the holder of such certificate, without charge to such holder,
a new certificate evidencing the number of Class A Shares not converted.
(h) Reissue of Shares. Class B Shares that are
exchanged for Class A Shares as provided herein shall continue to be authorized
Class B Shares and available for reissue by the Corporation as determined by
the Board of Directors. Class A Shares that are
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exchanged for Class B Shares as provided herein shall continue to be authorized
Class A Shares and available for reissue by the Corporation as determined by
the Board of Directors.
(i) Reservation. The Corporation hereby reserves
and shall at all times reserve and keep available, out of its authorized and
unissued Class A Shares, for the purposes of effecting conversions, such number
of duly authorized Class A Shares as shall from time to time be sufficient to
effect the conversion of all outstanding Class B Shares. The Corporation
hereby reserves and shall at all times reserve and keep available, out of its
authorized and unissued Class B Shares, for the purposes of effecting
conversions, such number of duly authorized Class B Shares as shall from time
to time be sufficient to effect the conversion of all outstanding Class A
Shares. The Corporation covenants that all the Class A Shares or the Class B
Shares, as the case may be, so issuable shall, when so issued, be duly and
validly issued, fully paid and non-assessable, and free from liens and charges
with respect to the issue.
5.8 Consideration on Merger, Consolidation, etc. In any
merger, consolidation or business combination, the consideration to be received
per share by the holders of Class A Shares and Class B Shares must be identical
for each class of stock, except that in any such transaction in which shares of
common stock are to be distributed, such shares may differ as to voting rights
to the extent that voting rights now differ among the Class A Shares and the
Class B Shares.
5.9 Transfer of Class B Shares. If a holder of Class B
Shares desires to transfer Class B Shares to CCC or an Affiliate of CCC, such
holder shall deliver to the Secretary of the Corporation (a) the certificate or
certificates representing the Class B Shares, duly endorsed in blank or
accompanied by proper instruments of transfer and (b) written notice to the
Corporation stating that such holder elects to transfer such shares and stating
the name and addresses in which each certificate for Class B Shares is to be
issued. Class B Shares shall not be transferred on the books of the
Corporation until all of the conditions set forth in the foregoing clauses (a)
and (b) are satisfied.
5.10 Restrictions and Limitations. So long as CCC and any
Affiliate of CCC collectively own 20% of the outstanding Class A Shares
(calculated as if CCC owns all the Class B Shares subject to that certain
Option Agreement, dated as the closing date of the merger contemplated by the
Agreement and Plan of Merger dated as of July 9, 1996, by and between CCC and
Tichenor Media System, Inc. pursuant to which a subsidiary of the Corporation
was merged with and into Tichenor Media System, Inc., which Option Agreement is
by and between CCC and the Corporation, and that such shares are outstanding,
and treating all such Class B Shares owned, or deemed as owned, by CCC and any
Affiliate of CCC as if they had been converted to outstanding Class A Shares),
the Corporation shall not, and shall not permit any subsidiary to, without the
vote or written consent by the holders of a majority of the Class B Shares
voting as a single class, with each Class B Share entitled to one vote:
(a) Effect any sale, lease, assignment, transfer
or other conveyance of all or substantially all of the assets of the
Corporation, or any merger or consolidation involving the Corporation where the
stockholders of the Corporation immediately prior to such merger or
consolidation do not own at least 50% of the capital stock of the surviving
entity immediately
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thereafter, or any reclassification or any recapitalization, or any
dissolution, liquidation, or winding up of the Corporation;
(b) Authorize, issue, or obligate itself to
issue, any shares of Preferred Stock;
(c) Make or permit any amendment to the
Corporation's certificate of incorporation, as amended from time to time, that
adversely affects the rights of the holders of Class B Shares;
(d) Declare or pay any non-cash dividends on or
declare or make any other non-cash distribution, direct or indirect, on account
of the Common Shares or set apart any amount other than cash for any such
purpose; or
(e) Make or permit any amendment or modification
to any Article of the Corporation's certificate of incorporation, as amended
from time to time, concerning the Corporation's capital stock, including, but
not limited to, Article Four or Article Five hereof.
6. Existence. The Corporation is to have perpetual existence.
7. Bylaws. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the bylaws of the Corporation.
8. Elections, Meetings and Books. Elections of directors need
not be by written ballot unless the bylaws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of Delaware,
as the bylaws may provided. The books of the Corporation may be kept (subject
to any provision contained in the statutes) outside the State of Delaware at
such place or places as may be designated from time to time by the board of
directors or in the bylaws of the Corporation.
9. Amendment. The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Second Amended and
Restated Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
10. Limitation on Director Liability. No director shall be
personally liable to the Corporation or any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (a)
for any breach of the director's duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174 of
the Delaware General Corporation Law, or (d) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law hereafter is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Corporation, in addition to the limitations on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this Article
shall be prospective only, and shall not
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adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
11. Indemnification.
11.1 General. Each person who was or is made a party to
or threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
a grand jury proceeding and an action by the Corporation (individually, a
"Proceeding") by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, excise taxes under the Employee
Retirement Income Security Act of 1974 or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in
connection with the Proceeding (collectively, "Covered Expenses") and such
indemnification shall continue as to the person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that, except as
provided in Paragraph 11.2, the Corporation shall indemnify any such person
seeking indemnification in connection with a Proceeding (or part thereof)
initiated by such person only if such Proceeding (or party thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such Proceeding in advance of its final disposition; provided,
however, that if required by the Delaware General Corporation Law, the payment
of such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a Proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification
to employees and agents of the Corporation with the same scope and effect as
the foregoing indemnification of directors and officers.
11.2 Failure to Pay Claims. If a claim under Paragraph
11.1 is not paid in full by the Corporation within thirty (30) days after the
Corporation has received a written claim, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in
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advance of its final disposition when the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant has not met
the standards of conduct which make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
11.3 Not Exclusive. The right to indemnification and the
payment of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Article 11 shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of this Second Amended and Restated Certificate of Incorporation,
bylaw, agreement, vote of stockholder or disinterested directors or otherwise.
11.4 Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent
of the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any Covered Expenses, whether or not the Corporation
would have the power to indemnify such person against such expense, liability
or loss under the Delaware General Corporation Law.
11.5 Definition of the Corporation. As used in this
Article, references to "the Corporation" shall include, in addition to the
resulting or surviving corporation, any constituent corporation absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
11.6 Severability. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each director, officer, employee
and agent of the Corporation as to any Covered Expenses to the fullest extent
permitted by any applicable portion of this Article that shall not have been
invalidated or by any other applicable law.
12. Participation of Non-Citizens. The following provisions are
included for the purpose of ensuring that control and management of the
Corporation remains with loyal citizens of the United States and/or
corporations formed under the laws of the United States or any of the states of
the United States, as required by the Communications Act of 1934, as the same
may be amended from time to time:
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12.1 The Corporation shall not issue to "Aliens" (which
term shall include (a) a person who is a citizen of a country other than the
United States; (b) any entity organized under the laws of a government other
than the government of the United States or any state, territory or possession
of the United States; (c) a government other than the government of the United
States or of any state, territory or possession of the United States; and (d) a
representative of, or an individual or entity controlled by, any of the
foregoing), either individually or in the aggregate, in excess of 25% of the
total number of shares of capital stock of the Corporation outstanding at any
time and shall seek not to permit the transfer on the books of the Corporation
of any capital stock to any Alien that would result in Aliens holding in excess
of 25% of the total number of shares of capital stock of the Corporation then
outstanding.
12.2 Notwithstanding Paragraph 12.1, no Alien or Aliens
shall be entitled to vote or direct or control the vote of more than 25% of (a)
the total number of shares of capital stock of the Corporation outstanding and
entitled to vote at any time and from time to time, or (b) the total voting
power of all shares of capital stock of the Corporation outstanding and
entitled to vote at any time and from time to time, generally, in the election
of directors.
12.3 The Board of Directors of the Corporation shall have
all powers necessary to implement the provisions of this Article 12.
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EXHIBIT 1.1(B)
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into as of this ____
day of ____________, 1996, by and among Clear Channel Communications, Inc., a
Texas corporation (the "Purchaser"), and Heftel Broadcasting Corporation, a
Delaware corporation (the "Company").
RECITALS
A. Pursuant to an Agreement and Plan of Merger, dated as of July
, 1996, by and between Purchaser and Tichenor Media System, Inc., a Texas
corporation (the "Merger Agreement"), Purchaser has obtained shares of New
Heftel Class B Common Stock (as defined below).
B. Pursuant to this Agreement, the Company shall grant Purchaser
an option to acquire all shares held by Purchaser or its subsidiaries in excess
of thirty percent (30%) of the aggregate number of shares of Heftel Class A
Common Stock (as defined below) and Class B Common Stock then outstanding.
NOW, THEREFORE, for and in consideration of the recitals and the
mutual covenants and agreements set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the meanings set forth
below, unless the context otherwise requires:
"Agreement" means this Option Agreement, as amended, supplemented, or
modified from time to time.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 2.3.
"FCC" means the Federal Communications Commission.
"FCC Consent" means the express written consent of the FCC to the
transfer of the Option Stock to Purchaser or its successor or assign.
<PAGE> 70
"Heftel Class A Common Stock" means Class A Common Stock, par value
$.001 per share, of the Company, having the terms, rights and privileges set
forth in the Second Amended and Restated Certificate of Incorporation of the
Company.
"New Heftel Class B Common Stock" means Class B Common Stock, par
value $.001 per share, of the Company, having the terms, rights and privileges
set forth in the Second Amended and Restated Certificate of Incorporation of
the Company.
"Option" has the meaning set forth in Section 2.1.
"Option Notice" has the meaning set forth in Section 2.3.
"Option Period" has the meaning set forth in Section 2.2.
"Option Stock" has the meaning set forth in Section 2.1.
"Registration Rights Agreement" means that certain Registration Rights
Agreement of even date between the Company and former stockholders of Tichenor
Media System, Inc.
"Stockholders Agreement" means that certain Stockholders Agreement of
even date by and among certain stockholders of the Company.
"Stock" means all the authorized capital stock of the Company.
ARTICLE 2
OPTION
2.1 Option. The Company hereby grants the Purchaser an exclusive
option (the "Option") to purchase, in whole or in one or more partial
exercises, [________] shares of New Heftel Class B Common Stock (the "Option
Stock"), constituting, as of the date hereof (after giving effect to the
transactions contemplated by the Merger Agreement), all shares of Heftel Class
A Common Stock and New Heftel Class B Common Stock in excess of 30% of the
total of such shares then outstanding, free and clear of all debts, liens,
encumbrances or other liabilities, subject to the terms and conditions set
forth herein.
2.2 Option Period. The Option shall run for a period (the "Option
Period") commencing on the date of execution of this Agreement and ending on
the earlier of (a) the Closing Date for the acquisition of the last shares of
Option Stock and (b) the tenth anniversary hereof, provided, however, that this
Agreement shall be automatically renewed for successive periods of one (1) year
unless prior to the expiration of such ten (10) or any such one (1) year period
a written notice of non-renewal is delivered by Purchaser to the Company.
Subject to Article 7, the Purchaser may in its sole discretion exercise the
Option in whole or in part at any time or times during this period.
<PAGE> 71
2.3 Option Exercise. The Purchaser shall deliver a written notice
of its election to exercise (in whole or in part) the Option to the Company (an
"Option Notice"), specifying the date of the purchase and number of shares of
the Option Stock to be acquired (the "Closing Date"), at least five (5) days
before the Closing Date. On the Closing Date, the purchase and sale of the
Option Stock specified in the Option Notice shall be consummated pursuant to
the terms of this Agreement.
2.4 Purchase Price. The Option Stock shall have an exercise price
of $.01 per share. Upon any exercise of the Option (or portion thereof), the
Company shall on the Closing Date pay to the Purchaser the Purchaser's pro rata
share, calculated as if the Purchaser had exercised the Option (or portion
thereof) to the extent set forth in the Option Notice immediately prior to the
record date, of any cash or other dividends paid by the Company to the holders
of Stock during the Option Period.
2.5 Assignment. Subject to Article 7, the Option shall be freely
transferrable in whole or in part.
2.6 Adjustment.
(a) In the event the Company shall (i) pay a dividend or
make any other distribution with respect to the Stock in shares of any class or
series of its capital stock, (ii) subdivide its outstanding shares of Stock,
(iii) combine its outstanding Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the Stock, the
number of shares of Option Stock not acquired hereunder prior to the record or
other effective date of such event shall be adjusted so that the Purchaser
shall thereafter be entitled to receive the kind and number of shares of Stock
or other securities of the Company which the Purchaser would have been entitled
to receive after the happening of any of the events described above had the
Option been exercised in full immediately prior to the happening of such event
or any record date with respect thereto. The per share exercise price shall be
appropriately adjusted to take account of any such event. Any adjustments made
pursuant to this Section 2.6 shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case of the consolidation of the Company with, or
merger of the Company with or into, or of the sale of all or substantially all
of the properties and assets of the Company to, any person, and in connection
therewith consideration is payable to holders of Stock in exchange therefor,
the Option shall remain subject to the terms and conditions set forth in this
Agreement and shall, after such consolidation, merger or sale, entitle the
Purchaser to receive upon exercise the number of shares of capital stock or
other securities or property (including cash) of the Company, or of such person
resulting from such consolidation or surviving such merger or to which such
sale shall be made or of the parent of such person, as the case may be, that
would have been distributable or payable on account of the Option Stock if the
Option had been exercised immediately prior to
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such merger, consolidation or sale (or, if applicable, the record date
therefor); and in any such case the provisions of this Agreement with respect
to the rights and interests thereafter of the Purchaser shall be appropriately
adjusted by the Company in good faith so as to be applicable, as nearly as may
reasonably be, to the capital stock or other securities or property of the
Company or such person to be so distributed or paid.
(c) Notwithstanding the foregoing, (i) if the Company
merges or consolidates with, or sells all or substantially all of its property
and assets to, another Person and consideration is payable to holders of Stock
in exchange for their Stock in connection with such merger, consolidation or
sale which consists solely of cash, or (ii) in the event of the dissolution,
liquidation or winding up of the Company, then the Purchaser shall be entitled
to receive distributions on the date of such event on an equal basis with
holders of Heftel Class A Common Stock as if the Option had been exercised
immediately prior to such event, less the exercise price (whether or not the
Option is then exercisable) and after such payment the Option shall terminate.
ARTICLE 3
CLOSING
3.1 Sale and Purchase. Subject to Article 7, on the Closing Date,
the Company shall issue to the Purchaser, and the Purchaser shall purchase from
the Company, the Option Stock specified in the Option Notice for the aggregate
exercise price set forth therein.
3.2 Delivery of Stock and Payment of Purchase Price. At the
Closing, the Company shall deliver to the Purchaser certificates representing
the Option Stock specified in the Option Notice, registered in the name of the
Purchaser, and the Purchaser shall pay the Purchase Price by wire transfer of
immediately available federal funds to a bank or other financial institution
designated by the Company.
ARTICLE 4
COVENANTS
4.1 Maintain Authorized Stock. The Company shall at all times
during the term hereof reserve and keep available for issue upon the exercise
of the Option such number of its authorized but unissued shares of New Heftel
Class B Common Stock as will be sufficient to permit the exercise in full of
the Option and an equal number of shares of Heftel Class A Common Stock into
which such shares of New Heftel Class B Common Stock can be converted on the
conditions set forth in the Second Amended and Restated Certificate of
Incorporation of the Company.
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4.2 Cooperation. Purchaser and the Company shall cooperate fully
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their obligations under this
Agreement, and the parties will use their reasonable efforts to consummate the
transactions contemplated hereby and to fulfill their obligations hereunder.
No party shall take any action that is inconsistent with its obligations under
this Agreement, that would render any of its representations or warranties
herein untrue or incomplete or that could hinder or delay the consummation of
the transactions contemplated by this Agreement.
4.3 Representation and Warranties True at Closing. Each party
hereto shall take all actions necessary to make its respective representations
and warranties hereunder true and correct as of each Closing Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 Authority; Binding Obligation. The execution, delivery and
performance of this Agreement and all transactions contemplated hereby have
been and shall be duly and validly authorized by all necessary corporate action
on the part of the Company (none of which actions have been modified or
rescinded and all of which actions are in full force and effect). This
Agreement constitutes a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
5.2 Title to Stock. Upon its issuance, the Option Stock shall be
duly authorized, validly issued and outstanding, fully paid and nonassessable.
5.3 Organization, Standing, and Authority. The Company (a) is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, (b) is duly qualified to conduct its business in
every state in which its ownership of property or conduct of business makes
such qualification necessary except where the failure to so qualify would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole, and (c) has the requisite corporate power and authority to (i) own,
lease, and use the Company's assets as now and hereafter owned, leased and used
by it, and (ii) conduct its business as now and hereafter conducted.
5.4 Absence of Conflicting Agreements. The execution, delivery,
and performance of this Agreement and the documents contemplated hereby (with
or without the giving of notice, the lapse of time, or both): (a) do not
require the consent of any third party other than any necessary FCC Consent,
any filings under any applicable federal and state antitrust laws and any
filings under applicable federal and state securities laws; (b) will not
conflict with any provision of the Second Amended and Restated Certificate of
Incorporation or By-Laws of the Company; (c) will not conflict with, result in
a breach of, or constitute a default under any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental
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instrumentality; (d) will not conflict with, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of any agreement, franchise, instrument, license, or permit to which the
Company is a party or by which the Company is bound; and (e) will not create
any claim, lien, charge, or encumbrance upon any of the Stock (other than
pursuant to this Agreement) or any of the assets of the Company.
5.5 Consents. Other than the FCC Consent, any filings under any
applicable federal and state antitrust laws and any filings under applicable
federal and state securities laws, no consent, approval, permit, or
authorization of or declaration to or filing with any governmental or
regulatory authority or any other public or private third party is required (a)
to render this Agreement and the transactions contemplated hereby valid and
effective, (b) to permit this Agreement and the transactions contemplated
hereby to be consummated, or (c) to permit the Company to issue the Option
Stock to Purchaser.
5.6 Capitalization. As of the date hereof, all of the issued
capital stock of the Company has been validly issued in compliance with all
federal and state corporate and securities laws and is fully paid and
non-assessable.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
6.1 Authority; Binding Obligation. The Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Texas. The Purchaser has all requisite corporate power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby. This Agreement constitutes a legal, valid and binding obligation of
the Purchaser, enforceable in accordance with its terms.
6.2 Absence of Conflicting Agreements and Required Consents. The
execution, delivery, and performance by Purchaser of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (a) do not require the consent of any third party other
than any necessary FCC Consent, any filings under any applicable federal and
state antitrust laws and any filings under any applicable federal and state
securities laws, (b) will not conflict with the Bylaws or Articles of
Incorporation of Purchaser, (c) will not conflict with, result in a breach of,
or constitute a default under, any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality, and (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license or permit to which Purchaser is a party
or by which Purchaser may be bound, such that Purchaser could not acquire the
Option Stock.
6
<PAGE> 75
6.3 Certain Representations. If shares of Option Stock are
acquired other than in an offering registered under the Securities Act of 1933,
as amended (the "Securities Act"), (a) the transferee must certify that such
transferee is an "accredited investor" (as such term is defined in Regulation D
promulgated under the Securities Act) and that such shares of Option Stock were
acquired with investment intent and not with a view to resale and (b) such
shares of Option Stock will be subject to a restrictive stock legend stating
that such shares were not registered under the Securities Act, stating that an
opinion of counsel may be required to transfer such shares. Upon exercise,
each share of Option Stock issued shall bear the following legend:
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AND
OTHER TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT,
DATED AS OF _________, 199__, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
ARTICLE 7
FCC CONSENT
The obligations of the Purchaser to purchase the Option Stock and pay
the Purchase Price to the Company upon the Purchaser's exercise of the Option
and the Company's obligation to issue the Option Stock to the Purchaser are
subject to obtaining the FCC Consent, if required, prior to Closing. An
application for FCC Consent shall be made if exercise of the Option to the
extent stated in the Option Notice would increase the total portion of the
common equity of the Company owned by Purchaser or its attributable affiliates
beyond thirty-three percent (33%) and counsel for either the Company or the
Purchaser reasonably requests in good faith that such an application be made in
connection with the purchase of such Option Stock.
ARTICLE 8
SPECIFIC PERFORMANCE
The Parties recognize that if either of them refuses to perform under
the provisions of this Agreement, monetary damages alone would not be adequate
to compensate the aggrieved party. Each party shall therefore be entitled, in
addition to any other remedies that may be available, including money damages,
to obtain specific performance of the terms of this Agreement. If any action
is brought to enforce this Agreement, the parties agree to waive the defense
that there is an adequate remedy at law.
7
<PAGE> 76
ARTICLE 9
MISCELLANEOUS
9.1 Additional Actions and Documents. Each of the parties hereto
hereby agrees to take or cause to be taken such further actions, to execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments, and to obtain such consents, including any necessary
FCC Consent, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.
9.2 Notices. All notices, requests, demands or other
communications which may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be (a) hand delivered, (b) mailed by first class, registered or certified
mail, return receipt requested, postage prepaid, or (c) delivered by an
overnight commercial courier service such as Federal Express, in each case
addressed as follows:
(i) If to the Company:
Heftel Broadcasting Corporation
100 Crescent Court
Suite 1777
Dallas, Texas 75201
Attn: McHenry Tichenor, Jr.
(ii) If to the Purchaser:
Clear Channel Communications, Inc.
200 Concord Plaza
Suite 600
San Antonio, Texas 78216
Attn: Randall Mays
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be mailed or
delivered in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt or the affidavit
of messenger being deemed conclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
9.3 Assignment. This Agreement shall be freely assignable in
whole or in part by the Purchaser.
8
<PAGE> 77
9.4 Amendment. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.
9.5 Headings. Article and section headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way define
or affect the meaning, construction or scope of any of the provisions hereof.
9.6 Binding Effect. Subject to any provision hereof restricting
assignment, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
9.7 Governing Law. This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Texas.
9.8 Execution in Counterparts. This Agreement may be executed in
two or more counterparts, none of which contain the signatures of all parties
hereto and each of which shall be deemed an original.
9.9 Survival of Representations. The representations, warranties,
covenants and agreements made by the parties in this Agreement and in any
document or instrument delivered in connection herewith or the transaction
contemplated hereby, shall survive without limitation except as imposed by law.
[The remainder of this page is intentionally left blank.]
9
<PAGE> 78
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed on its behalf, on the day and year first hereinabove set
forth.
HEFTEL BROADCASTING CORPORATION
By:
-----------------------------------
Name:
Title:
CLEAR CHANNEL COMMUNICATIONS, INC.
By:
-----------------------------------
Name:
Title:
10
<PAGE> 79
EXHIBIT 5.11
FORM OF AFFILIATE LETTER
Ladies and Gentlemen:
I have been advised that, as of the date of this letter, I may be
deemed to be an "affiliate" of Tichenor Media System, Inc. ("TICHENOR"), a
Texas corporation, as that term is defined for purposes of Rules 145(c) and (d)
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "SECURITIES ACT"). Pursuant to the
terms of the Agreement and Plan of Merger, dated as of July 9, 1996, between
Tichenor and Clear Channel Communications, Inc. ("PARENT"), a Texas corporation
(as modified by that certain Assignment Agreement, dated __________, 1996,
between Parent and Heftel Broadcasting Corporation ("HEFTEL"), a Delaware
corporation, and ______________ ("HEFTEL SUB"), a Texas corporation), Heftel
Sub will be merged with and into Tichenor (such merger being referred to herein
as the "MERGER" and such agreement being referred to herein as the "MERGER
AGREEMENT"). As a result of the Merger, I may receive shares of Class A Common
Stock, par value $.001 per share, of Heftel (the "HEFTEL COMMON STOCK") in
exchange for shares of Common Stock, par value $1.00 per share, or shares of
Junior Preferred Stock, par value $10.00 per share, of Tichenor.
I hereby represent and warrant to, and covenant and agree with, Heftel
that, if I receive any Heftel Common Stock as a result of the Merger:
1. I will not make any sale, transfer, or other disposition of
the Heftel Common Stock in violation of the Securities Act or the rules and
regulations of the SEC promulgated thereunder.
2. I have read this letter and the Merger Agreement and have
discussed their requirements and other applicable limitations on my ability to
sell, transfer, or otherwise dispose of the Heftel Common Stock, to the extent
I believed necessary, with my counsel or counsel for Tichenor.
3. I have been advised that the issuance of Heftel Common Stock
pursuant to the Merger has been registered under the Securities Act on a
Registration Statement on Form S-4. I have also been advised, however, that,
to the extent I am considered an "affiliate" of Tichenor at the time the Merger
Agreement is submitted for a vote of the shareholders of Tichenor, any public
offering or sale by me of any shares of Heftel Common Stock that I receive
pursuant to the Merger will, under current law, require either (a) the further
registration under the Securities Act of any shares of Heftel Common Stock to
be sold by me, (b) compliance with Rule 145 under the Securities Act, or (c)
the availability of another exemption from such registration under the
Securities Act.
4. I understand that stop transfer instructions will be given to
Heftel's transfer agent with respect to shares of Heftel Common Stock received
by me pursuant to the Merger and that
<PAGE> 80
a legend substantially as follows will be placed on the certificates for the
shares of Heftel Common Stock issued to me pursuant to the Merger:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED AS OF
___________, 1996, BETWEEN THE REGISTERED HOLDER HEREOF AND HEFTEL
BROADCASTING CORPORATION, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF HEFTEL BROADCASTING CORPORATION.
I also understand that, unless the transfer by me of my Heftel Common
Stock has been registered under the Securities Act or is a sale made in
conformity with the provisions of Rule 145, Heftel reserves the right to put
the following legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND WERE
ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 UNDER THE SECURITIES ACT APPLIES. THE SHARES HAVE BEEN ACQUIRED
BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT AND MAY NOT
BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
It is understood and agreed that the legends set forth in this
Paragraph 4 shall be removed by delivery of substitute certificates without
such legends if such legends are not required for purposes of the Securities
Act or this agreement. It is understood and agreed that such legends referred
to above will be removed if (a) two years shall have elapsed from the date the
undersigned acquired the Heftel Common Stock received in the Merger and the
provisions of Rule 145(d)(2) are then available to the undersigned, (b) three
years shall have elapsed from the date the undersigned acquired the Heftel
Common Stock received in the Merger and the provisions of Rule 145(d)(3) are
then applicable to the undersigned, or (c) Heftel has received either an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to Parent, or a "no action" letter obtained from the staff of the SEC, to the
effect that the restrictions imposed by Rule 145 under the Securities Act no
longer apply to the undersigned. Prior to any transfer of any of the Heftel
Common Stock, I will give written notice to Heftel of my intention to effect
such offer, sale or transfer, describing the proposed transaction in sufficient
detail to enable Heftel and its counsel to determine that the proposed
transaction will not violate the Securities Act.
5.11-2
<PAGE> 81
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Heftel as described in the first paragraph of
this letter or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.
Sincerely,
----------------------------------------
Accepted on the day of
---
, 1996
- ------------------
HEFTEL BROADCASTING CORPORATION
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
5.11-3
<PAGE> 82
EXHIBIT 5.15
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
___________, 1996, by and among Heftel Broadcasting Corporation, a Delaware
corporation (the "Company"), McHenry T. Tichenor, Sr., McHenry T. Tichenor,
Jr., Warren W. Tichenor, William E. Tichenor, Jean T. Russell, McHenry T.
Tichenor, Jr., as Custodian for David T. Tichenor, Alta Subordinated Debt
Partners III, L.P., a Delaware limited partnership ("Alta Partners"), Prime II
Management, LP, a Delaware limited partnership ("Prime II"), PrimeComm, LP, a
Delaware limited partnership (together with Prime II, "PrimeComm"), Ricardo A.
del Castillo, Jeffrey T. Hinson and David D. Lykes (collectively, the "Original
Holders").
RECITALS
A. Clear Channel Communications, Inc., a Texas corporation
("Clear Channel"), and Tichenor Media System, Inc., a Texas corporation
("TMS"), have entered into that certain Agreement and Plan of Merger dated July
9, 1996, as it may be amended (the "Merger Agreement"), which has been assumed
by the Company and which provides for the merger of a wholly-owned subsidiary
of the Company with and into TMS (the "Merger").
B. Pursuant to the Merger, all of the shares of common stock of
TMS (other than those shares held by Clear Channel and its Affiliates) will be
converted into shares of Class A common stock, par value $.001 per share (the
"Common Stock"), of the Company.
C. Pursuant to the terms of the Merger Agreement, it is a
condition to the obligations of TMS thereunder that the Company grant certain
registration rights to the Original Holders, with respect to the shares of
Common Stock to be received by such parties pursuant to the Merger in respect
of each of their interests in the equity of TMS.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:
AGREEMENTS
1. Definitions. In addition to the terms defined elsewhere
herein, when used herein the following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with the first Person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person.
<PAGE> 83
"Blackout Period" has the meaning set forth in Section 2(a) below.
"Clear Channel" means Clear Channel Communications, Inc., a Texas
corporation.
"Company Notice" has the meaning set forth in Section 2(a) below.
"Commission" means the Securities and Exchange Commission.
"Conversion Date" means the date on which Clear Channel and its
Affiliates collectively beneficially own a greater number of shares of Common
Stock than the number of shares of Common Stock collectively beneficially owned
by the Holders.
"Demand Requesting Holders" has the meaning set forth in Section 2(a)
below.
"Demand Registration" has the meaning set forth in Section 2(a) below.
"Demand Registration Period" has the meaning set forth in Section 2(a)
below.
"Demand Request" has the meaning set forth in Section 2(a) below.
"Exempt Registration Statement" means a registration statement on Form
S-4 or S-8 or any substitute form that may be adopted by the Commission or any
registration statement filed in connection with an exchange offer or offering
of securities solely to the Company's existing security holders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the value of the Registrable Securities
determined as follows: (i) if the security is listed on any established stock
exchange or a national market system, including, without limitation, the
National Market System of The Nasdaq Stock Market, its fair market value shall
be the average of the high and low sales prices or the average of the closing
bids if no sales were reported, as quoted on such system or exchange for the
five business days preceding the date of the Demand Request (or if there are
no sales or bids for such dates, then for the five last preceding business days
for such sales or bids), as reported in The Wall Street Journal or similar
publication; (ii) if the security is regularly quoted by a recognized
securities dealer but high and low selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for
the security for the five business days preceding the Demand Request (or if
there are no quoted prices for such dates, then for the five last preceding
business days for which there were quoted prices); or (iii) in the absence of
an established market for the security, the fair market value shall be
determined in good faith by the Company's Board of Directors, with reference to
the Company's net worth, prospective earning power, dividend-paying capacity
and other relevant factors, including the goodwill of the Company, the economic
outlook in the Company's industry, the Company's position in the industry and
its management, and the values of stock of other
<PAGE> 84
corporations in the same or similar line of business (all such factors
determined as of the date of a Demand Request).
"Holder" means the Original Holders and each transferee thereof who or
which holds Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 7(c) below.
"Indemnifying Party" has the meaning set forth in Section 7(c) below.
"Inspectors" has the meaning set forth in Section 5(j) below.
"Liquidity Event Demand Right" means the demand registration right
that may accrue to the Holders of Registrable Securities pursuant to clause
(ii)(A) of the first paragraph of Section 2(a) below.
"Majority Requesting Holders" has the meaning set forth in Section
2(c) below.
"Material Adverse Effect" has the meaning set forth in Section 2(d)
below.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Piggyback Holders" has the meaning set forth in Section 3(a) below.
"Piggyback Registration" has the meaning set forth in Section 3(a)
below.
"Piggyback Securities" has the meaning set forth in Section 3(b)
below.
"Public Stockholders" means the holders, beneficially or of record, of
Common Stock of the Company, excluding (a) Clear Channel or its Affiliates, (b)
Persons who or which received shares of Common Stock in the Merger or their
Affiliates and (c) Persons who or which received shares of Common Stock as
consideration in connection with acquisition transactions by the Company or its
Affiliates (other than securities issued in a transaction registered under the
Securities Act) which occurred after the date of the Merger.
"Qualified Offering" means an underwritten public offering of any
equity securities by the Company for its own account in which a registration
statement under the Securities Act is filed with and declared effective by the
Commission prior to the first anniversary of this Agreement and, in conjunction
with such offering, the managing Underwriter or Underwriters offer (by notice
delivered to the Holders no less than 30 days prior to the anticipated
effective date of such registration statement) to the Holders the opportunity
to register all or part of its or their Registrable Securities,
-3-
<PAGE> 85
provided, that the number of Registrable Securities available to the Holders
and other holders of securities proposed to be registered pursuant to such
registration statement shall be allocated first to the Holders in an amount
(the "Priority Amount") equal to the lesser of (a) 800,000 shares of Common
Stock (such number to be appropriately adjusted for stock dividends, stock
splits, recapitalizations and other transactions that affect the capitalization
of the Company) or (b) Registrable Securities having a Fair Market Value in
excess of $15,000,000 and then, to the extent that any additional securities
can be included in such registration as provided in Section 3(b) below, pro
rata among the holders of such other securities; provided, however, that any
such offering shall not be deemed to be a Qualified Offering unless the number
of Registrable Securities available to the Holders for inclusion therein shall
equal or exceed the Priority Amount.
"Qualified Offering Demand Right" means the demand registration right
that may accrue to the Holders of Registrable Securities pursuant to the terms
of clause (ii)(B) of the first paragraph of Section 2(a) below.
"Records" has the meaning set forth in Section 5(j) below.
"Registrable Securities" means the shares of Common Stock issued
pursuant to the Merger Agreement and other securities issued or issuable with
respect to such Common Stock by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or reorganization; provided, that any Registrable Security will
cease to be a Registrable Security when, after the completion of the Merger,
(a) a registration statement covering such Registrable Security has been
declared effective by the Commission and it has been disposed of pursuant to
such effective registration statement, (b) (i) it is held by a Holder who, in
the aggregate, holds less than 100,000 shares of Registrable Securities and
(ii) it is eligible to be sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met, (c) (i) it has been otherwise transferred and
(ii) it may be resold without subsequent registration under the Securities Act,
(d) it is held by Alta Partners, PrimeComm or any transferees of Alta Partners
or PrimeComm and a period of 180 days have passed since the completion of the
Merger, (e) it is transferred or disposed of pursuant to a foreclosure of a
pledge to secure indebtedness or (f) it is transferred to any charitable trust,
foundation or other organization or entity.
"Registration Expenses" has the meaning set forth in Section 6 below.
"Requesting Holders" has the meaning set forth in Section 2(a) below.
"Required Filing Date" has the meaning set forth in Section 2(b)
below.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement under the Securities Act.
-4-
<PAGE> 86
"Underwriter" means a securities dealer which purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
2. Demand Registration.
(a) Request for Registration. At any time (i) during the
three year period commencing on the Conversion Date or (ii) prior to the
Conversion Date (A) during any period in which less than two million shares of
Common Stock (such number to be appropriately adjusted for stock dividends,
stock splits, recapitalizations and other transactions that affect the
capitalization of the Company) are held of record or beneficially by Public
Stockholders or (B) after the first anniversary of this Agreement and until the
Company has affected a Qualified Offering if the Company has failed prior to
the first anniversary of this Agreement to effect a Qualified Offering
(individually and collectively, the "Demand Registration Period"), any Holder
or Holders of not less than 25% of the then outstanding Registrable Securities
(the "Demand Requesting Holder(s)") may make a written request of the Company
(a "Demand Request") for registration under the Securities Act (a "Demand
Registration") of all or part of its or their Registrable Securities; provided,
however, that the number of Registrable Securities requested to be registered
shall have a Fair Market Value in excess of $20,000,000. Any Demand
Registration Period may be extended pursuant to Section 4(c).
The Company shall be obligated to register Registrable Securities (x)
during the period set forth in clause (i) of the first sentence in the first
paragraph of this Section 2(a) on two occasions only, (y) during the period set
forth in clause (ii)(A) of the first sentence in the first paragraph of this
Section 2(a) on one occasion only and (z) during the period from the first
anniversary of this Agreement to the Conversion Date (pursuant to the terms of
Section 2(a)(ii)(B)) on one occasion only; provided, however, upon the
occurrence of the Conversion Date, the Liquidity Event Demand Right and the
Qualified Offering Demand Right, if applicable, shall expire and upon the
exercise of a Liquidity Event Demand Right by the Holders, if applicable, prior
to the exercise of a Qualified Offering Demand, the Qualified Offering Demand
Right shall expire.
At any time following a Demand Registration by any Demand Requesting
Holder or Holders pursuant to this Section 2, a Demand Requesting Holder or
Holders may make a subsequent Demand Request only if not less than 180 days
(the "Blackout Period") has elapsed from the later of (A) the date of
effectiveness of the prior Demand Registration or (B) the date of effectiveness
of any registration under the Securities Act with respect to an offering of any
equity securities by the Company for its own account or an offering of
securities of the Company initiated by any other holder of demand registration
rights (other than an Exempt Registration Statement). Notwithstanding the
foregoing, such Holders may make such a subsequent Demand Request during the
Blackout Period in the event that the date of effectiveness of either
registration referred to in the preceding sentence falls within 180 days of the
end of the Demand Registration Period.
Each Demand Request shall specify the number of shares of Registrable
Securities proposed to be sold. Within ten days after receipt of a Demand
Request, the Company shall give written notice of such registration request to
all Holders of Registrable Securities and all other holders of piggyback
-5-
<PAGE> 87
registration rights (the "Company Notice"). Upon the written request of any
such other Holder, delivered to the Company no later than 15 days after receipt
of the Company Notice by such Holder, to include all or any portion of the
Registrable Securities of such Holder in the Demand Registration (such Holders,
together with the Demand Requesting Holders, being referred to herein as the
"Requesting Holders"), the Company shall use all commercially reasonable
efforts (subject to Section 2(d)) to cause the managing Underwriter or
Underwriters of a Demand Registration to permit the Registrable Securities
proposed to be sold by the Requesting Holders to be included in such Demand
Registration. Notwithstanding the foregoing, the Company shall not be required
to include any Registrable Securities of any Requesting Holder in such
registration unless such Requesting Holder accepts the terms of the
underwriting agreement between the Company and the managing Underwriter or
Underwriters and otherwise complies with the provisions of Section 8 below.
(b) Effective Registration and Expenses. Subject to
Section 4(c), the Company shall file the Demand Registration within 90 days
after receiving a Demand Request (the "Required Filing Date") and shall use all
commercially reasonable efforts to cause the same to be declared effective by
the Commission as promptly as practicable after such filing. A registration
will not count as a Demand Registration until it has become effective (unless
the Requesting Holders withdraw all their Registrable Securities, in which case
such demand will count as a Demand Registration unless the Requesting Holders
pay all Registration Expenses in connection with such withdrawn registration);
provided, that if, after it has become effective, an offering of Registrable
Securities pursuant to a registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court, such registration will be deemed not to have been
effected.
(c) Selection of Underwriters. The offering of
Registrable Securities pursuant to a Demand Registration shall be in the form
of a "firm commitment" underwritten offering. The Requesting Holders of a
majority of the shares of Registrable Securities to be registered in a Demand
Registration (the "Majority Requesting Holders") shall select the book-running
managing Underwriter and such additional Underwriters to be used in connection
with the offering; provided, that such selections shall be subject to the
consent of the Company, which consent shall not be unreasonably withheld.
(d) Priority on Demand Registrations. In the event that
the managing Underwriter or Underwriters of a Demand Registration advise the
Requesting Holders in writing that in their opinion the total number of
Registrable Securities proposed to be sold by the Requesting Holders and other
securities proposed to be registered pursuant to the piggyback registration
rights of other holders in such offering is sufficiently large to materially
and adversely affect the price or success of the offering (a "Material Adverse
Effect"), then in such event the securities to be included in such offering
shall be allocated, first to the Requesting Holders pro rata on the basis of
the number of shares of fully-diluted Common Stock requested to be included in
such registration by each such Requesting Holder, and second, to the extent
that any additional securities can, in the opinion of the managing Underwriter
or Underwriters, be sold without any such Material Adverse Effect, pro rata
(based on the number of other securities requested to be included in such
registration by such other
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holders) among the other holders registering securities of the Company. No
securities to be sold for the account of the Company shall be included in a
Demand Registration. The Company agrees that in the event the Company grants
any piggyback registration rights to other holders in accordance with the terms
of this Agreement, the agreements granting such other piggyback rights must
provide that upon receipt of the Company Notice such other holders must deliver
a request for registration of their securities no later than 10 days from the
date of receipt of the Company Notice.
3. Piggy-Back Registration.
(a) Subject to the provisions of this Agreement, if the
Company proposes to file a registration statement under the Securities Act with
respect to an offering of any equity securities by the Company for its own
account or for the account of any of its equity holders (other than an Exempt
Registration Statement), then the Company shall give written notice of such
proposed filing to the Holders of the Registrable Securities as soon as
practicable (but in no event less than 30 days before the anticipated effective
date of such registration statement), and such notice shall offer the Piggyback
Holders (hereinafter defined) the opportunity to register such number of
Registrable Securities as each Piggyback Holder may request (a "Piggyback
Registration"). Subject to Section 3(b), the Company shall include in each
such Piggyback Registration all Registrable Securities requested to be included
in the registration for such offering by the Holders receiving notice of the
Piggyback Registration (the "Piggyback Holders"). Each Piggyback Holder shall
be permitted to withdraw all or part of such Piggyback Holder's Piggyback
Securities from a Piggyback Registration at any time prior to the effective
date thereof.
(b) The Company shall use all commercially reasonable
efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in the registration statement for such offering under Section 3(a)
(the "Piggyback Securities") to be included on the same terms and conditions as
any similar securities included therein. Notwithstanding the foregoing, the
Company shall not be required to include any Piggyback Holder's Piggyback
Securities in such offering unless such Piggyback Holder accepts the terms of
the underwriting agreement between the Company and the managing Underwriter or
Underwriters and otherwise complies with the provisions of Section 8 below.
Furthermore, if, (i) prior to the Conversion Date or (ii) subsequent to the
Conversion Date and subsequent to the exercise or termination of all demand
registration rights granted to the Holders of Registrable Securities pursuant
to Section 2, the managing Underwriter or Underwriters of a proposed
underwritten offering advise the Company in writing that in their opinion the
total amount of securities, including Piggyback Securities and other securities
proposed to be registered pursuant to similar piggyback registration rights, to
be included in such offering is sufficiently large to cause a Material Adverse
Effect, then in such event the securities to be included in such offering shall
be allocated, first to the party initiating the proposed underwritten offering;
second, to the extent that any additional securities can, in the opinion of
such managing Underwriter or Underwriters, be sold without any such Material
Adverse Effect, pro rata (based on the number of Registrable Securities and
other securities requested to be included in such registration by each
Piggyback Holder or other holder) among the Piggyback Holders and other
holders registering securities of the Company pursuant to similar piggyback
registration rights; and third, to the extent the Company is not the
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party initiating such proposed underwritten offering and that any additional
securities can, in the opinion of such managing Underwriter or Underwriters, be
sold without any Material Adverse Effect, to the Company. If, subsequent to
the Conversion Date, but prior to the exercise or termination of all demand
registration rights granted to Holders of Registrable Securities pursuant to
Section 2, the managing Underwriter or Underwriters of a proposed underwritten
offering advise the Company in writing that in their opinion the total amount
of securities, including Piggyback Securities and other securities proposed to
be registered pursuant to similar piggyback registration rights, to be included
in such offering is sufficiently large to cause a Material Adverse Effect, then
in such event the securities to be included in such offering shall be
allocated, first to the party initiating the proposed underwriter offering;
second, to the extent that any additional securities can, in the opinion of
such managing Underwriter or Underwriters, be sold without any such Material
Adverse Effect, (x) 50% of the total amount of additional securities shall be
allocated to any requesting Piggyback Holders (which allocation shall be
allocated pro rata among the requesting Piggyback Holders based on the number
of Registrable Securities requested to be included in such registration) and
(y) the remaining 50% of the additional securities to be included shall be
allocated pro rata among the requesting Piggyback Holders (excluding the shares
included pursuant to clause (x)) and all other holders of securities proposed
to be registered pursuant to similar piggyback registration rights (based upon
the number of Registrable Securities and other securities requested to be
included in such registration); and third, to the extent the Company is not the
party initiating such proposed underwritten offering and that any additional
securities can, in the opinion of such managing Underwriter or Underwriters, be
sold without any Material Adverse Effect, to the Company.
4. Holdback Agreements.
(a) Restrictions on Public Sale by Holder of Registrable
Securities. Each Holder of Registrable Securities (whether or not such
Registrable Securities are included in a registration statement pursuant
hereto) agrees not to effect any public sale or distribution of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock,
including a sale pursuant to Rule 144 under the Securities Act, during the 14
days prior to, and during the 180-day period beginning on, the effective date
of a registration statement relating to a firm commitment underwritten public
offering of Common Stock or securities convertible into, or exchangeable or
exercisable for Common Stock, except as part of such registration, if and to
the extent requested by the Company in the case of a nonunderwritten public
offering or if and to the extent requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public sale or distribution
of any securities similar to those being registered or any securities
convertible into or exchangeable or exercisable for such securities other than
pursuant to a registation statement on Form S-8 or any successor form, during
the 14 days prior to, and during the 180-day period beginning on, the effective
date of any registration statement which includes Registrable Securities
(unless such sale or distribution is pursuant to such registration statement
pursuant to Section 3(b) or the Holders are participating in such registration
statement pursuant to Section 3, and such offering was initiated by the Company
with respect to the sale of securities by
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the Company) and (ii) that any agreement entered into after the date of this
Agreement pursuant to which the Company issues or agrees to issue any privately
placed securities shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the period described in (i) above, including a sale pursuant
to Rule 144 under the Securities Act (except as part of any such registration,
if permitted); provided, however, that the provisions of this paragraph (b)
shall not prevent the conversion or exchange of any securities pursuant to
their terms into or for other securities.
(c) Deferral of Filing. The Company may defer the filing
(but not the preparation) of a registration statement required by Section 2
until a date not later than 90 days after the Required Filing Date if, at the
time the Company receives the Demand Request, the Company or its subsidiaries
are engaged in confidential negotiations or other confidential business
activities, disclosure of which would be required in such registration
statement (but would not be required if such registration statement were not
filed), and the Board of Directors of the Company determines in good faith that
such disclosure would be materially detrimental to the Company and its
stockholders. A deferral of the filing of a registration statement pursuant to
this Section 4(c) shall be lifted, and the requested registration statement
shall be filed forthwith, if the negotiations or other activities are disclosed
or terminated. In order to defer the filing of a registration statement
pursuant to this Section 4(c), the Company shall promptly, upon determining to
seek such deferral, deliver to each Requesting Holder a certificate signed by
the President of the Company stating that the Company is deferring such filing
pursuant to this Section 4(c). Within 20 days after receiving such
certificate, the Holders of a majority of the Registrable Securities held by
the Requesting Holders and for which registration was previously requested may
withdraw such request by giving notice to the Company. If withdrawn, the
Demand Request shall be deemed not to have been made for all purposes of this
Agreement. The Company may defer the filing of a particular registration
statement pursuant to this Section 4(c) only once. In the event the Company
shall defer the filing of a registration statement pursuant to this Section
4(c), the applicable Demand Registration Period shall automatically be extended
by the number of days in the period between the Required Filing Date and the
date on which such registration statement is filed with the Commission.
5. Registration Procedures. The Company will, at its expense,
use all commercially reasonable efforts to effect the registration and the sale
of any Registrable Securities under the Securities Act in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such request, the Company will as expeditiously as
practicable:
(a) prepare and file with the Commission a registration
statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of the Registrable Securities to be registered thereunder in accordance
with the intended method of distribution thereof, and use all commercially
reasonable efforts and proceed diligently and in good faith to cause such filed
registration statement to become effective under the Securities Act; provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to all Selling Holders and to one
counsel reasonably acceptable to the Company selected by the Selling Holders,
copies of all
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such documents proposed to be filed, which documents will be subject to the
review of such counsel; provided, further, that in connection with a Demand
Registration, the Company shall not file any registration statement or
prospectus, or any amendments or supplements thereto, if the Requesting Holders
who hold a majority of the Registrable Securities covered by such registration
statement, their counsel, or the managing Underwriters shall reasonably object,
in writing, on a timely basis;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective pursuant to Section 2 for a period (except as provided in the last
paragraph of this Section 5) of not less than 180 consecutive days or, if
shorter, the period terminating when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and Rule
174 thereunder, if applicable) and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the Selling Holders thereof set forth in such
registration statement;
(c) furnish to each such Selling Holder such number of
copies of such registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as such Selling Holder may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Selling Holder;
(d) notify the Selling Holders promptly, and (if
requested by any such Person) confirm such notice in writing, (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a registration statement or any post-effective
amendment, when the same has become effective under the Securities Act and each
applicable state law, (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a
registration statement or related prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceedings
for that purpose, (iv) if at any time the representations or warranties of the
Company or any subsidiary contained in any agreement (including any
underwriting agreement) contemplated by Section 5(i) below cease to be true and
correct in any material respect, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event which makes any statement made in
such registration statement or related prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in such registration
statement, prospectus or documents so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the prospectus,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the
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circumstances under which they were made not misleading and (vii) of the
Company's reasonable determination that a post- effective amendment to a
registration statement would be appropriate;
(e) use every commercially reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction in the United States, at the earliest practicable moment;
(f) cooperate with the Selling Holders and the managing
Underwriter or Underwriters to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depositary Trust Company; and enable such
Registrable Securities to be registered in such names as the managing
Underwriter or Underwriters may request at least two business days prior to any
sale of Registrable Securities;
(g) use all commercially reasonable efforts to register
or qualify such Registrable Securities as promptly as practicable under such
other securities or blue sky laws of such jurisdictions as any Selling Holder
or managing Underwriter reasonably (in light of the intended plan of
distribution) requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Selling Holder or managing
Underwriter to consummate the disposition in such jurisdictions in the United
States of the Registrable Securities owned by such Selling Holder; provided,
that the Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (g), (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction;
(h) use all commercially reasonable efforts to cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Selling Holder or Selling
Holders thereof to consummate the disposition of such Registrable Securities;
(i) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;
(j) make available for inspection by any Selling Holder
of such Registrable Securities, any Underwriter participating in any
disposition pursuant to such registration statement and any attorney,
accountant or other professional retained by any such Selling Holder or
Underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspectors
in connection with such registration statement. Records which the Company
determines, in good faith, to be confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of
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such Records is necessary to avoid or correct a misstatement or omission in
such registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction.
Each Selling Holder of such Registrable Securities agrees that information
obtained by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its affiliates unless and until such is made
generally available to the public. Each Selling Holder of such Registrable
Securities further agrees that it will, as soon as practicable upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company at its expense to undertake
appropriate action to prevent disclosure of the Records deemed confidential;
(k) use all commercially reasonable efforts to obtain a
comfort letter or comfort letters from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by comfort letters as the Selling Holders of a majority of the shares
of Registrable Securities being sold or the managing underwriter or
Underwriters reasonably requests;
(l) otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
(m) use all commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or quoted on any
inter- dealer quotation system on which similar securities issued by the
Company are then quoted;
(n) if any event contemplated by Section 5(d)(vi) above
shall occur, as promptly as practicable prepare a supplement or amendment or
post-effective amendment to such registration statement or the related
prospectus or any document incorporated therein by reference or promptly file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(o) cooperate and assist in any filing required to be
made with the NASD and in the performance of any due diligence investigation by
any underwriter, including any "qualified independent underwriter," or any
Selling Holder.
The Company may require each Selling Holder to promptly
furnish in writing to the Company such information regarding the distribution
of the Registrable Securities as it may from time to time reasonably request
and such other information as may be legally required in connection with such
registration. Notwithstanding anything herein to the contrary, the Company
shall have
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the right to exclude from any offering the Registrable Securities of any
Selling Holder who does not comply with the provisions of the immediately
preceding sentence.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(d)(vi), such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5(d)(vi), and, if so
directed by the Company, such Selling Holder will deliver to the Company all
copies, other than permanent file copies, then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give
such notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 5(b)) by the number of days during the period from and including the
date of the giving of notice pursuant to Section 5(d)(vi) to the date when the
Company shall make available to the Selling Holders of Registrable Securities
covered by such registration statement a prospectus supplemented or amended to
conform with the requirements of Section 5(d)(vi).
6. Registration Expenses. Subject to the provisions in Section
2(b) above with respect to a Demand Registration, in connection with any Demand
Registration or Piggyback Registration, the Company shall pay the following
registration expenses (the "Registration Expenses"): (a) all registration and
filing fees (including, without limitation, with respect to filings to be made
with the NASD), (b) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (c) printing expenses,
(d) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (e) the fees and expenses incurred in connection with the
listing on an exchange of the Registrable Securities if the Company shall
choose, or be required pursuant to Section 5(m) to list such Registrable
Securities, (f) reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters
requested pursuant to Section 5(k)), (g) the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, (h) reasonable fees and expenses of one counsel reasonably
acceptable to the Company selected by the Selling Holders incurred in
connection with the registration of such Registrable Securities hereunder and
(i) fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Section 3 of
Schedule E to the Bylaws of the NASD. The Company shall not have any
obligation to pay any underwriting fees, discounts, or commissions attributable
to the sale of Registrable Securities or the fees and disbursements of counsel
for any Underwriter.
7. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the
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meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the officers, directors, agents, general and limited partners, and
employees of each Selling Holder and each such controlling person from and
against any and all losses, claims, damages, liabilities, and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the Registrable Securities
or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by such Selling Holder or on such Selling
Holder's behalf expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this paragraph shall not apply to the extent that any such loss, claim,
damage, liability or expense results from the fact that a current copy of the
prospectus was not sent or given to the Persons asserting any such loss, claim,
damage, liability or expense at or prior to the written confirmation of the
sale of the Registrable Securities concerned to such Person if it is determined
that (i) it was the responsibility of such Selling Holder or any Underwriter or
dealer for Selling Holder to provide such person with a current copy of the
prospectus, (ii) such Selling Holder was provided with a current copy of the
prospectus prior to the written confirmation of sale and (iii) such current
copy of the prospectus would have cured the defect giving rise to such lose,
claim, damage, liability or expense. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Selling Holders provided in this Section
7(a).
(b) Indemnification by Holder of Registrable Securities.
Each Selling Holder, severally and not jointly, agrees to indemnify and hold
harmless the Company, and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and the officers, directors, agents and employees of the Company
and each such controlling Person to the same extent as the foregoing indemnity
from the Company to such Selling Holder, but only with respect to information
furnished in writing by such Selling Holder or on such Selling Holder's behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Securities. The liability of any Selling Holder under this Section
7(b) shall be limited to the aggregate cash and property received by such
Selling Holder pursuant to the sale of Registrable Securities covered by such
registration statement or prospectus.
(c) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall be
brought or asserted against any Person entitled to indemnification under
Section 7(a) or 7(b) above (an "Indemnified Party") in respect of which
indemnity may be sought from any party who has agreed to provide such
indemnification under Section 7(a) or 7(b) above (an "Indemnifying Party"), the
Indemnified Party shall give prompt notice to the Indemnifying Party and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Party, and shall assume
the
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payment of all reasonable expenses of such defense. Such Indemnified Party
shall have the right to employ separate counsel in any such action or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party has agreed to pay such fees and expenses, or (ii) the
Indemnifying Party fails promptly to assume the defense of such action or
proceeding or fails to employ counsel reasonably satisfactory to such
Indemnified Party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Party and
Indemnifying Party (or an Affiliate of the Indemnifying Party), and such
Indemnified Party shall have been advised by counsel that there is a conflict
of interest on the part of counsel employed by the Indemnifying Party to
represent such Indemnified Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party). Notwithstanding the foregoing, the Indemnifying
Party shall not, in connection with any one such action or proceeding or
separate but substantially similar related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable at any time for the fees and expenses of more than one separate firm of
attorneys (together in each case with appropriate local counsel for the
Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding effected without its written
consent (which consent will not be reasonably withheld), but if settled with
its written consent, or if there be a final judgment for the plaintiff in any
such action of proceeding, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Party from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment. The
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release, in form and
substance satisfactory to the Indemnified Party, from all liability in respect
of such action or proceeding for which such Indemnified Party would be entitled
to indemnification hereunder.
(d) Contribution. If the indemnification provided for in
this Section 7 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages, liabilities or judgments referred to herein, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments as between the
Company on the one band and each Selling Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and
of each Selling Holder in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one hand and of each Selling Holder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and the parties,
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation or by any other
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method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Selling Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Selling Holder were offered
to the public exceeds the amount of any damages which such selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
8. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such holder's Registrable Securities on the basis provided in
any underwriting arrangements approved by the Person entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and this
Agreement, and (c) if requested by another Person participating in such
underwritten registration, provides that all securities convertible or
exchangeable into Common Stock that are included in such underwritten
registration shall be so converted or exchanged on or prior to the consummation
thereof.
9. Marketing of Securities. Upon the registration of any
Registrable Securities of any Holders pursuant to the terms of this Agreement,
the Company shall use all commercially reasonable efforts to participate in and
cooperate with the managing Underwriter or Underwriters in the marketing of
such Registrable Securities, including, but not limited to, participating in
any sales force presentations and any "road show" or other marketing
presentations deemed necessary by the managing Underwriter or Underwriters to
market such securities.
10. Additional Registration Rights. The Company shall not on or
after the date of this Agreement enter into any agreement granting registration
rights to any other Person with respect to the securities of the Company, that
are demand registration rights of the type described in Section 2 and do not
rank pari passu or subordinate to the rights granted under Section 2, or with
respect to any piggyback registration rights of the type described in Section
3, that are not pari passu or subordinate to the rights granted to the Holders
of Registrable Securities hereunder (provided, that the recipients of any such
piggyback registration rights shall acknowledge in writing the priority of the
piggyback registration rights granted pursuant to Section 3 during the period
after the Conversion Date, but prior to the exercise or termination of all
demand registration rights granted to the Holders of Registrable Securities
pursuant to Section 2) without the prior written consent of Holders of a
majority of the then outstanding Registrable Securities. Any agreement entered
into pursuant to such consent shall not be amended without a further written
consent of the Holders of a majority of the then outstanding Registrable
Securities. The Company represents and warrants to the Holders that the
Company has not granted registration rights to any other Person with respect to
the securities of
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<PAGE> 98
the Company other than pursuant to that certain Registration Rights Agreement
of even date herewith between the Company and Clear Channel Communications,
Inc.
11. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company, Clear Channel (so
long as it and its Affiliates own at least 20% of the Common Stock (calculated
assuming all securities held by Clear Channel and its Affiliates exercisable or
exchangeable for or convertible into Class B Common Stock have been so
exercised, exchanged or converted and the Class B Common Stock subject thereto
is outstanding and by treating the Class B Common Stock of the Company as
converted into Common Stock)) and holders of at least a majority of the then
outstanding Registrable Securities.
12. Notices. Any notices required or permitted to be given under
this Agreement shall be given in writing and shall be deemed received when
received by the relevant party at such party's address as set forth opposite
such party's signature to this Agreement whether personally delivered or sent
by mail or delivered by telefacsimile or similar device.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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<PAGE> 99
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date
first written above.
<TABLE>
<S> <C>
HEFTEL BROADCASTING CORPORATION
Address:
- ------------------------------------- ----------------------------------------
Name:
- ------------------------------------- -----------------------------------
Title:
-----------------------------------
Address:
- ------------------------------------- ----------------------------------------
McHenry T. Tichenor, Sr.
- -------------------------------------
Address:
- ------------------------------------- ---------------------------------------
McHenry T. Tichenor, Jr.
- -------------------------------------
Address:
- ------------------------------------- ----------------------------------------
Warren W. Tichenor
- -------------------------------------
Address:
- ------------------------------------- ----------------------------------------
William E. Tichenor
- -------------------------------------
Address:
----------------------------------------
- ------------------------------------- McHenry T. Tichenor, Jr., as Custodian
nor David T. Tichenor
- -------------------------------------
Address:
- ------------------------------------- ----------------------------------------
Jean T. Russell
- -------------------------------------
Address:
- ------------------------------------- ----------------------------------------
Ricardo A. del Castillo
- -------------------------------------
Address:
- ------------------------------------- ----------------------------------------
Jeffrey T. Hinson
- -------------------------------------
</TABLE>
-18-
<PAGE> 100
<TABLE>
<S> <C>
Address:
- ------------------------------------- ----------------------------------------
David D. Lykes
- -------------------------------------
Address: PRIME II MANAGEMENT, LP
- -------------------------------------
By: , its
- ------------------------------------- --------------------------------
-------------------------------------
By:
--------------------------------
Its:
-------------------------------
Address: PRIMECOMM, LP
- -------------------------------------
By: , its
- ------------------------------------- --------------------------------
By:
--------------------------------
Its:
-------------------------------
ALTA SUBORDINATED DEBT
Address: PARTNERS III, L.P.
- -------------------------------------
By: , its
- ------------------------------------- --------------------------------
-------------------------------------
By:
---------------------------------
Its:
--------------------------------
</TABLE>
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<PAGE> 101
EXHIBIT 5.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the _______ day of _____________, 1996 by and between Heftel Broadcasting
Corporation, a Delaware corporation (together with its successors and assigns
permitted hereunder, the "Company"), and McHenry T. Tichenor, Jr. (the
"Executive").
WHEREAS, a wholly-owned subsidiary of the Company will merge with and
into Tichenor Media System, Inc., a Texas corporation ("Tichenor"), whereby
Tichenor will become a wholly-owned subsidiary of the Company (the "Merger");
WHEREAS, it is a condition to Tichenor's obligation to consummate the
Merger that the Company enter into this Agreement with the Executive; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to employ the Executive on the terms and conditions set forth herein.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. Subject to Section 3, the Company hereby
agrees to employ the Executive, and the Executive hereby agrees to be employed
by the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing on the effective date of the Merger (the "Effective
Date") and ending on the fifth anniversary of such date (the "Employment
Period").
2. Terms of Employment.
(a) Position and Duties.
(i) During the term of the Executive's
employment, the Executive shall serve as Chairman, President and Chief
Executive Officer of the Company and, in so doing, shall report to the Board.
The Executive shall have supervision and control over, and responsibility for,
such management and operational functions of the Company currently assigned to
such position, and shall have such other powers and duties (including holding
officer positions with one or more subsidiaries of the Company) as may from
time to time be prescribed by the Board, so long as such powers and duties are
reasonable and customary for the Chairman, President and Chief Executive
Officer of an enterprise comparable to the Company.
<PAGE> 102
(ii) During the term of the Executive's
employment, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote full business time to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully, effectively and
efficiently such responsibilities. During the term of Executive's employment
it shall not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures or
fulfill speaking engagements and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
(b) Compensation.
(i) Base Salary. During the term of the
Executive's employment, the Executive shall receive an annual base salary
("Annual Base Salary"), which shall be paid in accordance with the customary
payroll practices of the Company, at least equal to $260,000. During the term
of the Executive's employment, the Annual Base Salary shall be reviewed at
least annually by the Compensation Committee of the Board (the "Compensation
Committee") and shall be increased at any time and from time to time as the
Compensation Committee shall consider appropriate in accordance with the
compensation practices and guidelines of the Company for its executive
officers. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. The term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(ii) Bonus. In addition to Annual Base Salary,
the Executive shall be awarded during the term of the Executive's employment
such bonuses (each a "Bonus"), if any, as shall be determined by the
Compensation Committee consistent with its practices for executive officers of
the Company.
(iii) Incentive, Savings and Retirement Plans.
During the term of the Executive's employment, the Executive shall be entitled
to participate in all incentive, savings and retirement plans, practices,
policies and programs applicable generally to other executives of the Company
("Investment Plans").
(iv) Welfare Benefit Plans. During the term of
the Executive's employment, the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs
("Welfare Plans") provided by the Company (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other executives of the Company.
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<PAGE> 103
(v) Perquisites. During the term of the
Executive's employment, the Executive shall be entitled to receive (in addition
to the benefits described above) such perquisites and fringe benefits
appertaining to his position in accordance with any practice established by the
Board and to have the use of the 1993 Chevrolet Suburban owned by the Company.
(vi) Expenses. During the term of the Executive's
employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable employment expenses incurred by the Executive in accordance with
the policies, practices and procedures of the Company.
(vii) Vacation and Holidays. During the term of
the Executive's employment, the Executive shall be entitled to paid vacation
and paid holidays in accordance with the plans, policies, programs and
practices of the Company for its executive officers.
(viii) Employment Credit. For the purpose of
determining the Executive's eligibility, and the extent of his and his
family's benefits, under the Investment Plans, the Welfare Plans, and his
rights under clauses (iii), (iv), (v) and (vii) above, the Executive shall be
deemed to have been employed by the Company since the commencement of his
employment with Tichenor.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment
shall terminate automatically upon the Executive's death during the Employment
Period. If the Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below), the Company
may give to the Executive written notice in accordance with Section 11(b) of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties.
For purposes of this Agreement, "Disability" shall mean the Executive's
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. For
purposes of this Agreement, "Cause" shall mean (i) a breach by the Executive of
the Executive's obligations under Section 2(a) (other than as a result of
incapacity due to physical or mental illness) which constitutes a continued
material nonperformance by the Executive of his obligations and duties
thereunder, as determined by the Board, and which is not remedied within 30
days after receipt of written notice from the Company specifying such breach,
(ii) commission by the Executive of an act of fraud upon, or willful misconduct
toward, the Company, as reasonably determined by a majority of the
disinterested
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<PAGE> 104
members of the Board (neither the Executive nor members of his family being
deemed disinterested for this purpose) after a hearing by the Board following
ten days' notice to the Executive of such hearing, (iii) a material breach by
the Executive of Section 6 or Section 9, or (iv) the conviction of the
Executive of any felony (or a plea of nolo contendere thereto).
(c) Good Reason. The Executive's employment may be
terminated during the Employment Period by the Executive for Good Reason or
without Good Reason; provided, however, that the Executive agrees not to
terminate his employment for Good Reason unless (i) the Executive has given the
Company at least 30 days' prior written notice of his intent to terminate his
employment for Good Reason, which notice shall specify the facts and
circumstances constituting Good Reason, and (ii) the Company has not remedied
such facts and circumstances constituting Good Reason within such 30 day
period. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) or any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive (without limiting the foregoing, the Company and the Executive agree
that the Executive's failure to serve as the sole chief executive officer of
the Company or the delegation of the authority, duties or responsibilities of
the chief executive officer to another person or persons, including any
committee, shall be deemed to be an action by the Company which results in a
material diminution in the Executive's position, authority, duties, or
responsibilities as contemplated by Section 2(a));
(ii) any termination or material reduction of a
material benefit under any Investment Plan or Welfare Plan in which the
Executive participates unless (A) there is substituted a comparable benefit
that is economically substantially equivalent to the terminated or reduced
benefit prior to such termination or reduction or (B) benefits under such
Investment Plan or Welfare Plan are terminated or reduced with respect to all
employees previously granted benefits thereunder;
(iii) any failure by the Company to comply with any
of the provisions of Section 2(b), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iv) any failure by the Company to comply with and
satisfy Section 8(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 8(c);
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<PAGE> 105
(v) prior to the termination of the Executive for
Cause, the Executive's ceasing to be a director of the Company for any reason
other than his death, Disability (as hereinafter defined) or voluntary
resignation;
(vi) the relocation or transfer of the senior
management's executive offices to a location more than 15 miles from the
Executive's current principal residence set forth in Section 11(b) hereof; or
(vii) without limiting the generality of the
foregoing, any material breach by the Company or any of its subsidiaries or
other affiliates (as defined below) of (A) this Agreement or (B) any other
agreement between the Executive and the Company or any such subsidiary or other
affiliate.
As used in this Agreement, "affiliate" means, with respect to a
person, any other person controlling, controlled by or under common control
with the first person; the term "control," and correlative terms, means the
power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a person; and "person" means an individual,
partnership, corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
(d) Notice of Termination. Any termination by the
Company for Cause or without Cause, or by the Executive for Good Reason or
without Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 11(b). For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall not be more than 15
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the Executive or
the Company from asserting such fact or circumstances in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason or without Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the Company other than for
Cause, the date on which the Company notifies the Executive of such termination
and (iii) if the Executive's employment is terminated by reason of death or
Disability, the date of death of the Executive or the Disability Effective
Date, as the case may be.
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<PAGE> 106
4. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Period, the Company shall terminate the
Executive's employment other than for either Cause or Disability or the
Executive shall terminate his employment for Good Reason, and the termination
of the Executive's employment in any case is not due to his death:
(i) the Company shall pay to the Executive in a
lump sum in cash within ten days after the Date of Termination the aggregate of
the following amounts: (A) the sum of the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore paid and any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay ("Accrued
Obligations"); (B) an amount equal to the product of (x) the sum of (1) the
Executive's Annual Base Salary at the Date of Termination plus (2), if the Date
of Termination occurs prior to date that Bonuses have first been awarded after
the Effective Date, then the Executive's budgeted Bonus for the year in which
the Date of Termination occurs or, if the Date of Termination occurs after the
date that Bonuses have first been awarded after the Effective Date, then the
Executive's actual Bonus for the prior year multiplied by (y) a fraction, the
numerator of which is the number of full or partial months in the period from
the Date of Termination to the end of the Employment Period and the denominator
of which is 12; and (C) any amount arising from Executive's participation in,
or benefits under, any Investment Plans ("Accrued Investments"), which amounts
shall be payable in accordance with the terms and conditions of such Investment
Plans;
(ii) for the remainder of the Employment Period,
or such longer period as any plan, program, practice or policy may provide, the
Company shall continue benefits provided under Welfare Plans to the Executive
and/or the Executive's family at least equal to those which would have been
provided to them if the Executive's employment had not been terminated or pay
the Executive monthly an amount of cash equal to the value of benefits under
Welfare Plans; provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive similar benefits under another
employer provided plan, such benefits or cash described herein shall be
secondary to and not duplicate those provided under such other plan during such
applicable period of eligibility (such continuation of such benefits or cash
for the applicable period hereinabove set forth in this clause (ii) shall be
hereinafter referred to as "Welfare Benefit Continuation"). For purposes of
determining eligibility of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to
have remained employed until the end of the Employment Period and to have
retired on the last day of such period;
(iii) for the remainder of the Employment Period,
to the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided or which the Executive and/or the
Executive's family is eligible to receive pursuant to this Agreement and under
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<PAGE> 107
any plan, program, policy or practice or contract or agreement of the Company
("Other Benefits"); and
(iv) notwithstanding the terms or conditions of
any stock option, stock appreciation right or similar agreements between the
Company and the Executive, the Executive shall vest, as of the Date of
Termination, in all rights under such agreements (i.e., stock options that
would otherwise vest after the Date of Termination) and thereafter shall be
permitted to exercise any and all such rights until the first anniversary of
the Date of Termination.
(b) Death. If the Executive's employment is terminated
by reason of the Executive's death during the Employment Period, the Company
shall pay to his legal representatives in a lump sum in cash within ten days
after the Date of Termination the aggregate of the following amounts: (i) the
Accrued Obligations; and (ii) the Accrued Investments. The Company shall have
no further payment obligations to the Executive or his legal representatives
under this Agreement, other than for payment of Other Benefits and the timely
provision of the Welfare Benefit Continuation to the Executive's family.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment
Period, the Company shall have no further payment obligations to the Executive
or his legal representatives under this Agreement, other than for (i) payment
of Accrued Obligations, Accrued Investments and Other Benefits and (ii) the
timely provision of the Welfare Benefit Continuation to the Executive and his
family; provided however, that if the Executive is covered by a
Company-provided group or individual disability insurance policy at the date
the Executive's employment is terminated by reason of the Executive's
Disability and benefits under such policy are not then payable to the Executive
pursuant to the terms of such policy, then the Company shall continue to pay
the Executive his Annual Base Salary in effect at the date of such termination
(in accordance with the customary payroll practices of the Company) until the
first to occur of six months after such termination date or benefits becoming
payable to the Executive under such policy.
(d) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated by the Company for Cause or by the
Executive without Good Reason during the Employment Period, the Company shall
have no further payment obligations to the Executive other than for payment of
Accrued Obligations, Accrued Investments and Other Benefits to the Date of
Termination.
5. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others; provided, however, that the Company may reduce
any payments it is required to make to the Executive under Section 4 by the
amount of the principal and accrued
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<PAGE> 108
interest on any loans or advances made to the Executive by the Company that are
outstanding on the Date of Termination (and such reduction in payments shall be
deemed to be payment in full by the Executive of such loans or advances to the
extent of such reduction). In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as provided in Section 4(a)(ii), such amounts shall not be reduced
whether or not the Executive obtains other employment. Neither the Executive
nor the Company shall be liable to the other party for any damages in addition
to the amounts payable under Section 4 hereof arising out of the termination of
the Executive's employment prior to the end of the Employment Period; provided,
however, that the Company shall be entitled to seek damages for any breach of
Sections 6 or 9 or criminal misconduct.
6. Confidential Information.
(a) The Executive acknowledges that the Company and its
affiliates have trade, business and financial secrets and other confidential
and proprietary information (collectively, the "Confidential Information"). As
defined herein, Confidential Information shall not include (i) information that
is generally known to other persons or entities who can obtain economic value
from its disclosure or use and (ii) information required to be disclosed by the
Executive pursuant to a subpoena or court order, or pursuant to a requirement
of a governmental agency or law of the United States of America or a state
thereof or any governmental or political subdivision thereof; provided,
however, that the Executive shall take all reasonable steps to prohibit
disclosure pursuant to subsection (ii) above.
(b) The Executive agrees (i) to hold such Confidential
Information in confidence and (ii) not to release such information to any
person (other than Company employees and other persons to whom the Company has
authorized the Executive to disclose such information and then only to the
extent that such Company employees and other persons authorized by the Company
have a need for such knowledge).
(c) The Executive further agrees not to use any
Confidential Information for the benefit of any person or entity other than the
Company.
(d) The Executive's obligations under this Section 6
shall terminate (i) on the first anniversary of the Date of Termination if the
Executive's employment is terminated by the Company for Cause or due to
Disability or by the Executive without Good Reason or (ii) at the end of the
Employment Period if (A) the Executive's employment is terminated by the
Company without Cause (and not due to Disability) or by the Executive for Good
Reason and (B) the Company makes the payments and performs its obligations
required under Section 4 throughout the Employment Period.
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<PAGE> 109
7. Surrender of Materials Upon Termination. Upon any termination
of the Executive's employment, the Executive shall immediately return to the
Company all copies, in whatever form, of any and all Confidential Information
and other properties of the Company and its affiliates which are in the
Executive's possession, custody or control.
8. Successors.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
9. Non-Competition.
(a) The term of Non-Competition (herein so called) shall
be for a term beginning on the date hereof and continuing until (i) the first
anniversary of the Date of Termination if the Executive's employment is
terminated by the Company for Cause or due to Disability or by the Executive
without Good Reason or (ii) the end of the Employment Period if (A) the
Executive's employment is terminated by the Company without Cause (and not due
to Disability) or by the Executive for Good Reason and (B) the Company makes
the payments and performs its obligations required under Section 4 throughout
the Employment Period.
(b) During the term of Non-Competition, the Executive
will not (other than for the benefit of the Company pursuant to this Agreement)
directly or indirectly, individually or as an officer, director, employee,
shareholder, consultant, contractor, partner, joint venturer, agent, equity
owner or in any capacity whatsoever, (i) engage in any Spanish language radio
or television broadcasting business that transmits a primary or city-grade
signal within a Metro Survey Area (as currently defined by The Arbitron Company
in its Radio Markets Reports) in which a station directly operated by the
Company transmits a primary or city-grade signal (A), with respect to the term
of Non- Competition that is during the Executive's employment, during such term
of employment, and
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<PAGE> 110
(B), with respect to the term of Non-Competition that is after the term of the
Executive's employment, on the Date of Termination (all such areas being
collectively called the "Geographic Area") (a "Competing Business"), (ii) hire,
attempt to hire, or contact or solicit with respect to hiring any employee of
the Company, or (iii) divert or take away any customers or suppliers of the
Company in the Geographic Area. Notwithstanding the foregoing, the Company
agrees that the Executive may own less than five percent of the outstanding
voting securities of any publicly traded company that is a Competing Business
so long as the Executive does not otherwise participate in such competing
business in any way prohibited by the preceding clause. As used in this
Section 9(b), "Company" shall include the Company and any of its subsidiaries.
(c) During the term of Non-Competition, the Executive
will not use the Executive's access to, knowledge of, or application of
Confidential Information to perform any duty for any Competing Business; it
being understood and agreed to that this paragraph 9(c) shall be in addition to
and not be construed as a limitation upon the covenants in paragraph 9(b)
hereof.
(d) The Executive acknowledges that the geographic
boundaries, scope of prohibited activities, and time duration of the preceding
paragraphs are reasonable in nature and are no broader than are necessary to
maintain the confidentiality and the goodwill of the Company's proprietary
information, plans and services and to protect the other legitimate business
interests of the Company.
10. Effect of Agreement on Other Benefits. The existence of this
Agreement shall not prohibit or restrict the Executive's entitlement to full
participation in the executive compensation, employee benefit and other plans
or programs in which executives of the Company are eligible to participate.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
<TABLE>
<S> <C>
If to the Executive: McHenry T. Tichenor, Jr.
------------------- 3924 Mockingbird Lane
Dallas, Texas 75205
</TABLE>
10
<PAGE> 111
<TABLE>
<S> <C>
If to the Company: Heftel Broadcasting Corporation
----------------- 6767 West Tropicana Avenue
Las Vegas, Nevada 89103
Attention: General Counsel
</TABLE>
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there shall be added
automatically as part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
(d) The Company agrees to attempt to obtain and maintain
a director's and officer's liability insurance policy during the term of the
Executive's employment covering the Executive on commercially reasonable terms,
and the amount of coverage shall be reasonable in relation to the Executive's
position and responsibilities hereunder; provided, however, that such coverage
may be reduced or eliminated to the extent that the Company reduces or
eliminates coverage for its directors and executives generally.
(e) The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(f) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(g) The Executive acknowledges that money damages would
be both incalculable and an insufficient remedy for a breach of Section 6 or 9
by the Executive and that any such breach would cause the Company irreparable
harm. Accordingly, the Company, in addition to any other remedies at law or in
equity it may have, shall be entitled, without the requirement of posting of
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<PAGE> 112
bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of
Section 6 or 9 by the Executive.
(h) The provisions of this Agreement constitute the
complete understanding and agreement between the parties with respect to the
subject matter hereof.
(i) This Agreement may be executed in two or more
counterparts.
(j) In the event any dispute or controversy arises under
this Agreement and is not resolved by mutual written agreement between the
Executive and the Company within 30 days after notice of the dispute is first
given, then, upon the written request of the Executive or the Company, such
dispute or controversy shall be submitted to arbitration to be conducted in
accordance with the rules of the American Arbitration Association. Judgment
may be entered thereon and the results of the arbitration will be binding and
conclusive on the parties hereto. Any arbitrator's award or finding or any
judgment or verdict thereon will be final and unappealable. All parties agree
that venue for arbitration will be in Dallas, Texas, and that any arbitration
commenced in any other venue will be transferred to Dallas, Texas, upon the
written request of any party to this Agreement. All arbitrations will have
three individuals acting as arbitrators: one arbitrator will be selected by
the Executive, one arbitrator will be selected by the Company, and the two
arbitrators so selected will select a third arbitrator. Any arbitrator
selected by a party will not be affiliated, associated or related to the party
selecting that arbitrator in any matter whatsoever. The decision of the
majority of the arbitrators will be binding on all parties. The Company shall
be responsible for paying its own and the Executive's attorneys fees, costs and
other expenses pertaining to any such arbitration and enforcement regardless of
whether an arbitrator's award or finding or any judgment or verdict thereon is
entered against the Executive. The Company shall promptly (and in no event
after ten days following its receipt from the Executive of each written request
therefor) reimburse the Executive for his reasonable attorneys fees, costs and
other expenses pertaining to any such arbitration and the enforcement thereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from the Board, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
EXECUTIVE
----------------------------------------
McHenry T. Tichenor, Jr.
<PAGE> 113
HEFTEL BROADCASTING CORPORATION
------------------------------------
By:
---------------------------------
Title:
------------------------------
13
<PAGE> 114
EXHIBIT 5.17
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "AGREEMENT") is entered into and
effective as of _______, 1996 by and among Heftel Broadcasting Corporation, a
Delaware corporation (the "COMPANY"), and each of the stockholders listed on
the signature pages hereto, and each other holder of record of Common Stock (as
defined below), who may hereafter execute a separate agreement to be bound by
the terms hereof. The stockholders listed on the signature pages hereto, other
than Prime II Management, L.P., PrimeComm, L.P. and Alta Subordinated Debt
Partners III, L.P. (each of which are parties to this Agreement for the limited
purposes of agreeing to the restrictions on transfer set forth in Section 2.2),
and each other Person (as defined below) that may become a party hereto as
contemplated hereby, being hereinafter referred to individually as a
"STOCKHOLDER" and collectively as the "STOCKHOLDERS."
RECITALS:
A. Clear Channel Communications, Inc., a Texas corporation
("CCC"), and Tichenor Media System, Inc., a Texas corporation ("TMS"), have
entered into that certain Agreement and Plan of Merger (the "MERGER AGREEMENT")
dated as of July 9, 1996, as amended, which has been assigned to the Company
and pursuant to which a subsidiary of the Company merged with and into TMS (the
"MERGER").
B. In the Merger all of the outstanding capital stock of TMS,
other than the Senior Preferred (as defined in the Merger Agreement) and other
than capital stock of TMS held by CCC, was converted into shares of Class A
Common Stock, par value $.001 per share (the "CLASS A COMMON STOCK"), of the
Company.
C. In the Merger all of the shares of capital stock of TMS and
all of the shares of Class A Common Stock held by CCC and Clear Channel Radio,
Inc., a Nevada corporation ("CCR") were converted into shares of Class B Common
Stock, par value $.001 (the "CLASS B COMMON STOCK") of the Company.
D. The Company and the Stockholders desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the Common Stock of
the Company which may be now owned or hereafter acquired by the Stockholders,
and to provide for certain rights and obligations in respect thereof and
certain other matters as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
<PAGE> 115
ARTICLE I
GENERAL PROVISIONS;
REPRESENTATIONS AND WARRANTIES
1.1 Certain Terms. In addition to the terms defined elsewhere
herein, when used herein the following terms shall have the meanings indicated:
"ACCREDITED INVESTOR" shall have the meaning set forth for
such term in Regulation D.
An "AFFILIATE" means, with respect to any Person, any other
Person controlling, controlled by or under common control with the
first Person. For purposes of this definition and this Agreement, the
term "control" (and correlative terms) means the power, whether by
contract, equity ownership or otherwise, to direct the policies or
management of a Person.
With respect to any stock,"BENEFICIAL" ownership or
"BENEFICIALLY" owned shall have the same meaning as in Rule 13d-3
under the Exchange Act, or any successor provision.
"BOARD" means the board of directors of the Company.
"CLEAR CHANNEL OPTION" means the option dated as of the date
hereof issued by the Company to CCC to acquire such number of shares
of Class B Common Stock as are transferred by CCC to the Company in
order to bring the percentage ownership of CCC in the Company to 30%
immediately following such transfer.
"CLEAR CHANNEL REGISTRATION RIGHTS AGREEMENT" means that
certain Registration Rights Agreement of even date herewith by and
among the Company and the Clear Channel Stockholders, as amended from
time to time.
"CLEAR CHANNEL STOCKHOLDERS" means CCC and CCR and the
transferees of such Stockholders (other than a Tichenor Stockholder)
authorized under this Agreement, excluding, however, a transferee in
an Exempt Transfer or a Third-Party Sale.
"COMMON STOCK" means, collectively, the Class A Common Stock,
the Class B Common Stock and any securities that the Class A Common
Stock or the Class B Common Stock may be converted into or exchanged
for, including pursuant to any Permitted Transfer in connection with a
merger, consolidation, share exchange or other similar transaction.
"COMMON STOCK EQUIVALENTS" means (without duplication with any
other Class A Common Stock, Class B Common Stock or Common Stock
Equivalents) rights, warrants, options, convertible securities, or
exchangeable securities or indebtedness, or other rights, exercisable
for or convertible or exchangeable into, directly or indirectly, Class
A Common Stock or securities convertible or exchangeable into Class A
Common Stock, whether at the time of issuance or upon the passage of
tine or the occurrence of some future event.
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<PAGE> 116
"CONVERSION DATE" means the date on which the Clear Channel
Stockholders collectively beneficially own a greater number of shares
of Class A Common Stock than the number of shares of Class A Common
Stock collectively beneficially owned by the Tichenor Stockholders.
"COVERED SHARES" means shares of Class A Common Stock and
Class B Common Stock held by Stockholders that are subject to the
provisions of Article II as provided in Section 4.4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and any successor
statute.
"EXEMPT TRANSFER" means (a) one or more Transfers by a
Stockholder, whether or not related, within a 12-month period which in
the aggregate do not exceed five percent of the number of shares of
Common Stock owned by such Stockholder on the date hereof (as set
forth on the signature pages hereto, and as adjusted for any splits,
stock dividends payable in Common Stock or securities exercisable or
exchangeable for Common Stock, or reverse stock splits), (b) sales of
Common Stock by a Stockholder in an offering registered under the
Securities Act pursuant to such Stockholder's rights under the
Tichenor Registration Rights Agreement or the Clear Channel
Registration Rights Agreement, (c) a Transfer to the equity interest
owners of a Clear Channel Stockholder in a pro rata distribution or
upon a partial or complete liquidation or dissolution of such Clear
Channel Stockholder (other than from a wholly-owned subsidiary to its
sole stockholder), (d) a Transfer by a Stockholder pursuant to the
exercise of such Stockholder's rights to Transfer in a Participation
Offer (as defined herein) pursuant to Section 2.4 or (e) a Transfer in
response to a tender or exchange offer for all of the outstanding
Common Stock of the Company.
"FULLY-DILUTED COMMON STOCK" means, at any time, the then
outstanding Common Stock of the Company plus (without duplication) all
shares of Common Stock issuable, whether at such time or upon the
passage of time or the occurrence of future events, upon the exercise,
conversion or exchange of all then outstanding Common Stock
Equivalents. For purposes of this definition, each share of Class B
Common Stock shall be deemed exchanged for one share of Class A Common
Stock notwithstanding any restriction or prohibition relating to such
exchange.
"IMMEDIATE FAMILY" means the spouse of an individual and the
grandparents, parents, children and grandchildren of the individual or
his or her spouse. An adopted child will be treated as the child of
his or her adoptive parent or parents if (but only if) he or she was
adopted before he or she reached 21 years of age.
"MARKET PRICE" means the average closing sale price of the
Class A Common Stock for the five trading days prior to the date in
question on the principal securities exchange on which the Class A
Common Stock is then traded.
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<PAGE> 117
"PERSON" means any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, and any
government or agency or political subdivision thereof.
"PERMITTED TRANSFER" means any Transfer (a) with respect to a
Stockholder who is an individual, to a member of the Immediate Family
of the Stockholder or a trust whose sole beneficiaries are the
Stockholder and/or members of the Immediate Family of the Stockholder,
(b) with respect to a Stockholder that is a corporation, partnership
or other entity (other than a trust), to an equity owner of the
corporation, partnership or other legal entity, (c) with respect to a
Stockholder that is a trust, to any beneficiary of the trust or any
member of the Immediate Family of a beneficiary of the trust, (d) to
any wholly-owned Affiliate of a Stockholder, (e) pursuant to a pledge
to secure indebtedness provided that the pledgee agrees in writing
that the shares of Common Stock subject to such Transfer shall be
subject to the terms hereof, (f) to any charitable trust, foundation
or other organization or entity, (g) to a Stockholder pursuant to the
provisions of Section 2.3 and (h) pursuant to a merger, consolidation,
share exchange or other similar transaction in which the holders of a
majority of the outstanding shares of Common Stock continue to own a
majority of the common equity interests of the surviving entity.
"REGULATION D" means Regulation D as promulgated under the
Securities Act, as amended from time to time, and any successor
provision.
"SEC" means the Securities and Exchange Commission or any
successor governmental agency.
"SECURITIES ACT" means the Securities Act of 1933 and the
rules and regulations thereunder, as amended from time to time, and
any successor statute.
"THIRD-PARTY SALE" means any Transfer other than an Exempt
Transfer or a Permitted Transfer.
"TICHENOR REGISTRATION RIGHTS AGREEMENT" means that certain
Registration Rights Agreement of even date herewith by and among the
Company and the Tichenor Stockholders, as amended from time to time.
"TICHENOR STOCKHOLDERS" means the Stockholders, other than the
Clear Channel Stockholders, listed on the signature pages of this
Agreement and the transferees of such Stockholders (other than a Clear
Channel Stockholder) authorized under this Agreement, excluding,
however, a transferee in an Exempt Transfer or a Third-Party Sale.
"TRANSFER" means any direct or indirect sale, transfer, pledge
or other disposition of Covered Shares.
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1.2 Representations and Warranties.
(a) Each of the Stockholders (as to itself only)
represents and warrants to the Company and the other Stockholders that;
(i) it has full power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance by it
of this Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action;
(ii) this Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes the binding
obligation of such Stockholder enforceable against such Stockholder in
accordance with its terms; and
(iii) the execution, delivery and performance by
such Stockholder of this Agreement and the consummation by such
Stockholder of the transactions contemplated hereby will not, with or
without the giving of notice or the lapse of time, or both, (A)
violate any provision of law, statute, rule or regulation to which it
is subject, (B) violate any order, judgment or decree applicable to
it, or (C) conflict with, or result in a breach or default under, any
term or condition of its certificate of incorporation or by-laws,
certificate of limited partnership or partnership agreement, as
applicable, or any agreement or other instrument to which such
Stockholder is a party or by which such Stockholder is bound.
(b) The Company hereby represents and warrants to each
Stockholder that:
(i) it is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware, it has full corporate power and authority under its
certificate of incorporation to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby, and
the execution, delivery and performance by it of this Agreement and
the consummation of the transaction contemplated hereby have been duly
authorized by any necessary action;
(ii) this Agreement has been duly and validly
executed and delivered by the Company and constitutes the binding
obligation thereof enforceable against the Company in accordance with
its terms; and
(iii) the execution, delivery and performance by
the Company of this Agreement will not, with or without the giving of
notice or the lapse of time, or both, (A) violate any provision of
law, statute, rule or regulation to which the Company is subject, (B)
violate any order, judgment or decree applicable to the Company, or
(C) conflict with, or result in a breach or default under, any term or
condition of its Certificate of Incorporation or by-laws or any
agreement or other instrument to which the Company is a party or by
which it is bound other than such violations, conflicts, breaches and
defaults which individually or in the aggregate would not (x) affect
the Company's ability to perform its
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obligations hereunder or (y) have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
ARTICLE II
TRANSFERS OF SECURITIES
2.1 General. Any Third-Party Sale shall be subject to compliance
with provisions of this Article II. For purposes of this Agreement, as to any
Stockholder which is a legal entity and does not have assets valued, on a cost
basis, equal to or in excess of the greater of (a) $5 million or (b) the value
of Common Stock held thereby (valued at the Market Price), in each case other
than Common Stock, any Transfer of any equity interest in such Stockholder
which, in one or a series of Transfers, involves in the aggregate more than a
50% equity interest in such Stockholder will be a Transfer unless such Transfer
is solely to other existing equity holders of such entity. Any Permitted
Transfer will require the execution and delivery of an instrument in form and
substance satisfactory to the Board pursuant to which the Transferee agrees to
be bound by this Agreement.
2.2 Transfer Restrictions. Each Tichenor Stockholder, other than
McHenry T. Tichenor, Jr., agrees with the Company not to Transfer (other than
pursuant to Permitted Transfers or pursuant to the exercise of rights granted
under the Tichenor Registration Rights Agreement) any Covered Shares for a
period of 180 days after the date hereof. McHenry T. Tichenor, Jr. agrees with
the Company not to Transfer any Covered Shares (other than (a) pursuant to
Permitted Transfers, (b) with respect to Covered Shares having a Market Price
not to exceed $3 million, pursuant to the exercise of rights granted under the
Tichenor Registration Rights Agreement, (c) pursuant to the exercise of his
rights to Transfer in a Participation Offer under Section 2.4, or (d) pursuant
to a Transfer in response to a tender or exchange offer for all of the
outstanding Common Stock of the Company) until the second anniversary of the
date hereof. Prime II Management, L.P., PrimeComm, L.P. and Alta Subordinated
Debt Partners III, L.P. each agrees with the Company not to Transfer any
Covered Shares (other than (a) pursuant to transactions that would be Permitted
Transfers if such parties were Stockholders, (b) pursuant to the exercise of
rights granted under the Tichenor Registration Rights Agreement, or (c)
pursuant to a Transfer in response to a tender or exchange offer for all of the
outstanding Common Stock of the Company, and with respect to Prime II
Management, L.P. and PrimeComm, L.P., other than pursuant to Transfers of up
to 65,000 shares of Common Stock in the aggregate) until the earlier to occur
of June 30, 1997 or the 180th day after the date hereof. Each Clear Channel
Stockholder agrees with the Company not to Transfer any Covered Shares (other
than (a) pursuant to Permitted Transfers, (b) pursuant to the exercise of
rights granted under the Clear Channel Registration Rights Agreement, (c)
pursuant to a Transfer to the equity interest owners of a Clear Channel
Stockholder whether in a pro rata distribution or upon a partial or complete
liquidation or dissolution of such Clear Channel Stockholder or otherwise or
(d) pursuant to a Transfer in response to a tender or exchange offer for all of
the outstanding Common Stock of the Company) for a period of 180 days after the
date hereof.
2.3 Right of First Offer. (a) Prior to consummating any
Third-Party Sale, the Stockholder proposing to effect the Third-Party Sale (the
"OFFERING STOCKHOLDER") will deliver to each of the other Stockholders a
written notice (an "OFFER NOTICE") specifying (i) the aggregate amount of cash
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<PAGE> 120
consideration (the "OFFER PRICE") for which the Offering Stockholder proposes
in good faith to sell the Shares to be offered in such Third-Party Sale (the
"OFFERED SHARES"), (ii) the identity of the purchaser in such Third-Party Sale
(if then known), and (iii) all other material terms of the proposed Third-Party
Sale. For purposes of this Section 2.3, the Tichenor Stockholders only
(collectively and as they may allocate among themselves as set forth below)
will be the "NON- OFFERING STOCKHOLDER" with respect to a proposed Third-Party
Sale by any Clear Channel Stockholder, and the Clear Channel Stockholders only
(collectively and as they may allocate among themselves as set forth below)
will be the Non- Offering Stockholder with respect to a proposed Third-Party
Sale by any Tichenor Stockholder.
(b) Rights to Purchase Offered Shares. If the
Non-Offering Stockholder delivers to the Offering Stockholder a written notice
(an "ACCEPTANCE NOTICE") within 30 days following delivery of the Offer Notice
(provided that if such offer relates to a proposed Transfer of Common Stock
representing more than 10% of the Common Stock owned by such Offering
Stockholder on the date hereof and more than two percent of the then
outstanding Common Stock such Non- Offering Stockholder shall have 60 days in
which to deliver such Acceptance Notice (either such period being referred to
herein as the "ROFO ACCEPTANCE PERIOD")), stating that such Non-Offering
Stockholder is willing to purchase all of the Offered Shares for the Offer
Price and on the other terms set forth in the Offer Notice, the Offering
Stockholder will sell all (but not less than all) of the Offered Shares to such
Non-Offering Stockholder, and such Non-Offering Stockholder will purchase such
Offered Shares from the Offering Stockholder, on the proposed terms and subject
to the conditions set forth below. In such case, the Tichenor Stockholders
only, with the Offered Shares allocated (unless otherwise agreed by the
Tichenor Stockholders requesting to purchase Offered Shares) based on the
number of Offered Shares requested to be purchased by each of the Tichenor
Stockholders, will be the "PURCHASING STOCKHOLDER" with respect to a proposed
Third-Party Sale by any Clear Channel Stockholder, and the Clear Channel
Stockholders only, with the Offered Shares allocated (unless otherwise agreed
by the Clear Channel Stockholders requesting to purchase Offered Shares) based
on the number of Shares owned by each of the Clear Channel Stockholders who
request to purchase Offered Shares (but in no event so as to require any
Stockholder to purchase in excess of the number of Offered Shares requested by
such Stockholder), will be the Purchasing Stockholder with respect to a
proposed Third-Party Sale by any Tichenor Stockholder.
(c) The ROFO Closing. The consummation of any purchase
of the Offered Shares by the Purchasing Stockholder pursuant to this Section
2.3 (the "ROFO CLOSING") will occur no more than five Business Days following
the delivery of the Acceptance Notice (such five Business Day period being
referred to herein as the "ROFO CLOSING PERIOD") at such time and place as may
be agreed upon by the Offering Stockholder and the Purchasing Stockholder or,
if such parties fail to agree to such time and place, at the principal
executive offices of the Company at 10:00 a.m. (Central Time) on the fifth
Business Day following the expiration of the ROFO Acceptance Period. At the
ROFO Closing, (i) the Purchasing Stockholder will deliver to the Offering
Stockholder by certified or official bank check or wire transfer to an account
designated by the Offering Stockholder an amount in immediately available funds
equal to the Offer Price, (ii) the Offering Stockholder will deliver one or
more certificates evidencing the Offered Shares, together with such other duly
executed instruments or documents (executed by the Offering Stockholder) as may
be reasonably requested by the Purchasing Stockholder to acquire the Offered
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Shares free and clear of any and all claims, liens, pledges, charges,
encumbrances, security interests, options, trusts, commitments and other
restrictions of any kind whatsoever (collectively, "ENCUMBRANCES"), except for
Encumbrances created by this Agreement, federal or state securities law or the
Purchasing Stockholder or as specified in the Offer Notice, and (iii) the
Offering Stockholder will be deemed to represent and warrant to the Purchasing
Stockholder that, upon the ROFO Closing, the Offering Stockholder will convey
and the Purchasing Stockholder will acquire the entire record and beneficial
ownership of, and good and valid title to, the Offered Shares, free and clear
of any and all Encumbrances, except for Encumbrances created by this Agreement,
federal and state securities laws or the Purchasing Stockholder or as described
in the Offer Notice.
(d) Right to Consummate Third-Party Sale. Subject to the
provisions of Section 2.4 below, if no Acceptance Notice relating to the
proposed Third-Party Sale is delivered to the Offering Stockholder prior to the
expiration of the ROFO Acceptance Period, or an Acceptance Notice is so
delivered to the Offering Stockholder but the ROFO Closing fails to occur prior
to the expiration of the ROFO Closing Period (unless the Purchasing Stockholder
was ready, willing and able prior to the expiration of the ROFO Closing Period
to consummate the transactions to be consummated by the Purchasing Stockholder
at the ROFO Closing), the Offering Stockholder may (without affecting its
rights, if any, arising out of such failure) consummate the Third-Party Sale,
but only (i) during the 180 calendar day period immediately following the
expiration of the ROFO Acceptance Period (in the event that no Acceptance
Notice was timely delivered to the Offering Stockholder) or the 180 calendar
day period immediately following the expiration of the ROFO Closing Period (in
the event that an Acceptance Notice was timely delivered to the Offering
Stockholder but the ROFO Closing failed timely to occur), (ii) at a price at
least equal to 95% of the Offer Price, and (iii) upon other terms not
materially less favorable to the Offering Stockholder than those set forth in
the Offer Notice.
2.4 Participation Offer. Prior to consummating any
Third-Party Sale and after complying with the provisions of Section 2.3 above,
the Stockholder proposing to complete such Third-Party Sale (the "TRANSFEROR")
shall offer (the "PARTICIPATION OFFER") to include in the proposed Third-Party
Sale a number of shares of Stock (regardless of whether such shares are of the
same class being sold by the Transferor) designated by any of the other
Stockholders, not to exceed, in respect of any such other Stockholder, the
number of shares equal to the product of (a) the aggregate number of shares to
be sold by the Transferor to the proposed transferee and (b) a fraction with a
numerator equal to the number of shares of Fully-Diluted Common Stock held by
such other Stockholder and a denominator equal to the number of shares of
Fully-Diluted Common Stock held by all Stockholders; provided that if the
consideration to be received by the Transferor includes any securities, only
Stockholders who are Accredited Investors shall be entitled to include their
shares in such sale (but in such a case, each Stockholder shall be entitled to
include in such sale a number of its shares, without duplication, equal to the
total number of shares held by its Affiliates which are excluded from such sale
by the operation of this proviso). The Transferor shall give written notice to
each other non-transferring Stockholder of the Participation Offer (the
"TRANSFEROR'S NOTICE") at least 20 days prior to the proposed Third-Party Sale.
The Transferor's Notice shall specify (a) the Offer Price for which the
Transferor proposes in good faith to sell the shares to be offered in such
Third-Party Sale (the "SALE SHARES"), (b) the identity of the purchaser in such
Third-Party Sale (if then known), (c) the place and date on which the Third
- -Party Sale is to be consummated and (d) all
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other material terms of the proposed Third-Party Sale. Each Stockholder who
wishes to include shares of Common Stock in the proposed Third-Party Sale in
accordance with the terms of this Section 2.4 shall so notify the Transferor
not more than 10 days after the date of the Transferor's Notice. The
Participation Offer shall be conditioned upon the Transferor's sale of Common
Stock pursuant to the transactions contemplated in the Transferor's Notice with
the transferee named therein. If any other Stockholder or other Stockholders
have accepted the Participation Offer, the Transferor shall reduce to the
extent necessary the number of shares of Common Stock it otherwise would have
sold in the proposed sale so as to permit other Stockholders who have accepted
the Participation Offer to sell the number of shares that they are entitled to
sell under this Section 2.4, and the Transferor and such other Stockholder or
other Stockholders shall sell the number of shares of Common Stock specified in
the Participation Offer to the proposed transferee in accordance with the terms
of such sale set forth in the Transferor's Notice.
2.5 Conversion of Class B Common Stock. Neither a conversion of
shares of Class B Common Stock held by the Clear Channel Stockholders into
Class A Common Stock, nor a conversion of Class A Common Stock held by the
Clear Channel Stockholders into Class B Common Stock shall be deemed a Transfer
if the shares of Class A Common Stock or Class B Common Stock, as the case may
be, issuable upon such conversion are held by a Clear Channel Stockholder.
After the Conversion Date the obligations of each of the Stockholders to make a
Participation Offer pursuant to Section 2.4 shall terminate and be of no
further force or effect. In addition, after the Conversion Date the ROFO
Acceptance Period with respect to any Third-Party Sales shall be reduced to ten
days regardless of the number of shares of Common Stock that are the subject of
the Offer Notice.
2.6 Transfers Subject to Compliance with Securities Act. No
shares of Common Stock may be transferred by a Stockholder (other than pursuant
to an effective registration statement under the Securities Act) unless such
Stockholder first delivers to the Company an opinion of counsel, which opinion
and counsel shall be reasonably satisfactory to the Company, to the effect that
such transfer in not required to be registered under the Securities Act.
2.7 Transfers in Violation Void. Any purported Transfer by a
Stockholder which is not permitted by the provisions of this Article II, or
which is in violation of such provisions, shall be void and of no force and
effect whatsoever.
2.8 Treatment of Clear Channel Option. The Clear Channel Option
and the transferability thereof shall be subject to the provisions of this
Agreement for all purposes as if CCC owned the shares subject thereto and as if
any transfer of the Clear Channel Option were a transfer of the underlying
shares of Class B Common Stock and the shares underlying Clear Channel Option
shall be deemed outstanding for the purposes of this Agreement.
-9-
<PAGE> 123
ARTICLE III
TERMINATION
The provisions of this Agreement shall terminate in respect of all
Stockholders (a) upon the written consent of (i) Stockholders who then hold
Common Stock representing at least seventy-five percent of the Fully-Diluted
Common Stock then held by all of the Stockholders (other than CCC or its
Affiliates, if CCC or one of its Affiliates then holds 25% or more of the
outstanding Common Stock) and (ii) CCC, if CCC or any of its Affiliates then
holds 25% or more of the outstanding Common Stock, and (b) immediately prior to
the consummation of a merger, consolidation, share exchange or other similar
transaction in which the holders of a majority of the outstanding Common Stock
of the Company shall cease to hold a majority of the common equity interests in
the surviving entity. A Person who ceases to hold any Stock and who ceases to
beneficially own any Stock shall cease to be a Stockholder and shall have no
further rights under this Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 Amendment. Any provision of this Agreement may be altered,
supplemented, amended or waived by the written consent of each of (a) the
Company, (b) the holders of a majority of the Covered Shares then held by the
Clear Channel Stockholders and (c) the holders of a majority of the Covered
Shares then held by the Tichenor Stockholders, and such alteration, supplement,
amendment or waiver shall be binding upon all Stockholders including
nonconsenting Stockholders.
4.2 Specific Performance. The Stockholders and the Company
recognize that the obligations imposed an them in this Agreement are special,
unique, and of extraordinary character, and that in the event of breach by any
party, damages will be an insufficient remedy; consequently, it is agreed that
the Stockholders and the Company may have specific performance and injunctive
relief (in addition to damages) as a remedy for the enforcement hereof, without
proving damages.
4.3 Assignment. Except as otherwise expressly provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the Stockholders and the
Company. No such assignment shall relieve the assignor from any liability
hereunder. Any purported assignment made in violation of this Section 4.3
shall be void and of no force and effect.
4.4 Shares Subject to this Agreement. The provisions of Article
II of this Agreement restricting the Transfer of shares of Common Stock will
apply to all shares of Common Stock owned by the Stockholders on the date
hereof and any shares of Common Stock acquired after the date hereof until they
are Transferred in an Exempt Sale or Third- Party Sale to a person other than a
Stockholder.
4.5 Legends. (a) Each certificate for Common Stock and the Clear
Channel Option shall include a legend in substantially the following form:
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<PAGE> 124
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AND
OTHER TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT,
DATED AS OF________, 199__ A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
(b) A restriction on transfer of shares of Common Stock set forth
in such legends (a "RESTRICTION") shall cease and terminate as to any
particular shares of Common Stock when, in the opinion of the Company and
counsel reasonably satisfactory to the corporation (which opinion shall be
delivered to the Company in writing), such Restriction is no longer required
under the provisions hereof. Whenever such Restriction shall cease and
terminate as to any shares of Common Stock, the holder thereof shall be
entitled to receive from the Company, without expense to such holder, new
certificates) not bearing a legend stating such Restriction.
4.6 Notices. Any and all notices, designations, consents, offers,
acceptances or other communications provided for herein (each "NOTICE") shall
be given in writing by overnight courier, telegram, or telecopy which shall be
addressed, or sent, to the respective addresses as follows (or such other
address as the Company or any Stockholder may specify to the Company and all
other Stockholders by Notice):
The Company:
-------------------
-------------------
-------------------
Each Stockholder:
To such address or telecopy number of such Stockholder as is
set forth on the signature pages hereto or as such Stockholder
provides by notice to the Company and all other Stockholders
or, if such address is not so provided, to such Stockholder's
address as is reflected on the stock transfer records of the
Company at such time.
All Notices shall be deemed effective upon receipt. No Stockholder shall be
entitled to receive a Notice hereunder (or a copy of a Notice delivered to the
Company) if, at the time such Notice is to be sent, such Stockholder (including
its Affiliates and the employees of such Stockholder and its Affiliates) no
longer owns any shares of Common Stock.
4.7 Counterparts. This Agreement may be executed in two or more
counterparts and each counterpart shall be deemed to be an original and which
counterparts together shall constitute one and the same agreement of the
parties hereto.
4.8 Section Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provisions hereof.
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<PAGE> 125
4.9 Choice of Law. This Agreement shall be governed by the
internal laws of the State of Texas without regard to the principles of
conflicts of laws thereof.
4.10 Entire Agreement. This Agreement contains the entire
understanding of the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, discussions and understandings with respect
thereto.
4.11 Cumulative Rights. The rights of the Stockholders and the
Company under this Agreement are cumulative and in addition to all similar and
other rights of the parties under other agreements.
4.12 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated.
-12-
<PAGE> 126
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date
first written above.
HEFTEL BROADCASTING CORPORATION
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
CLEAR CHANNEL COMMUNICATIONS, INC.
shares of Class B Common Stock By:
- ------ ----------------------------------
Name:
----------------------------------
Title:
----------------------------------
CLEAR CHANNEL RADIO, INC.
shares of Class B Common Stock By:
- ------ ----------------------------------
Name:
----------------------------------
Title:
----------------------------------
----------------------------------------
shares of Class A Common Stock McHenry T. Tichenor, Sr.
- ------
----------------------------------------
shares of Class A Common Stock McHenry T. Tichenor, Jr.
- ------
-13-
<PAGE> 127
----------------------------------------
shares of Class A Common Stock McHenry T. Tichenor, Jr.. as Custodian
- ------ for David T. Tichenor
shares of Class A Common Stock
- ------ ----------------------------------------
Warren W. Tichenor
shares of Class A Common Stock
- ------ ----------------------------------------
William E. Tichenor
shares of Class A Common Stock
- ------ ----------------------------------------
Jean T. Russell
shares of Class A Common Stock
- ------ ----------------------------------------
Ricardo A. del Castillo
shares of Class A Common Stock
- ------ ----------------------------------------
Jeffrey Hinson
shares of Class A Common Stock
- ------ ----------------------------------------
David Lykes
-14-
<PAGE> 128
PRIME II MANAGEMENT, L.P.
shares of Class A Common Stock By: Prime II Management, Inc.,
- ------ its general partner
By:
-----------------------
Its:
-----------------------
PRIME COMM, L.P.
By: PrimeComm, Inc.,
shares of Class A Common Stock its general partner
- ------
By:
-----------------------
Its:
-----------------------
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
______ shares of Class A Common Stock By: , its
-------------------------------
------------------------------------
By:
--------------------------------
Its:
--------------------------------
-15-
<PAGE> 129
EXHIBIT 5.18
INDEMNIFICATION AGREEMENT
This Agreement is made as of _________________, by and between Heftel
Broadcasting Corporation, a Delaware corporation (the "Company"), and the
undersigned, a director and/or officer of the Company ("Indemnitee"), with
respect to the following facts.
A. The Company is aware that competent and experienced persons
are increasingly reluctant to serve as directors or officers of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of
such directors and officers.
B. The following facts contribute to unfairness to directors and
officers: (i) laws regarding the duties of directors and officers are often
ambiguous; (ii) costs of litigation may be so enormous (whether or not the case
is meritorious) that the defense and/or settlement of such litigation is often
beyond the personal resources of officers and directors; and (iii) delay in
litigation may extend the period of exposure to an officer or director until
after retirement or death, thus forcing spouses, heirs, executors or
administrators to expend funds.
C. The Company has been advised that there can be no assurance
that directors' and officers' liability insurance will be available to the
Company and Indemnitee in the future, and that the cost of such insurance, if
available, may not be acceptable to the Company.
D. Indemnitee questions the adequacy and reliability of the
protection presently afforded by the Delaware General Corporation Law, the
California General Corporation Law (together with the Delaware General
Corporation Law, the "Corporation Laws") and the Company's Certificate of
Incorporation and Bylaws, in part because certain of the indemnification
provisions of the Corporation Laws are for the most part merely permissive and
because the impact of provisions of the Company's Certificate of Incorporation
and Bylaws is presently uncertain. In addition, the Company may be subject to
the provisions of certain other states' laws under statutes relating to
"nominally foreign" or "pseudo-foreign" corporations.
E. Indemnitee currently serves as a director and/or officer of
the Company. Indemnitee is concerned about continuing to serve the Company as
a director and/or officer without assurance that indemnities available to him
are, and will be, adequate to protect him against the risks associated with his
service to the Company.
F. The Company, in order to induce Indemnitee to continue to
serve the Company as a director and/or officer without assurance that
indemnities available to him are, and will be, adequate to protect him against
the risk associated with his service to the Company, has agreed to provide
Indemnitee with the benefits contemplated by this Agreement, which benefits are
intended to provide Indemnitee with the maximum possible protection permitted
by law.
G. As a result of the provision of such benefits and in reliance
thereon Indemnitee is continuing to serve as a director or officer.
<PAGE> 130
NOW, THEREFORE, in consideration of the foregoing and the promises,
conditions, representations and warranties set forth herein, the Company and
Indemnitee hereby agree as follows:
1. Definitions. The following terms, as used herein, shall have
the following respective meanings:
1.1 "Covered Act" means (i) any actual or alleged action
taken or attempted by Indemnitee (including, without limitation, any breach of
duty, neglect, error, misstatement, or misleading statement) (a) in his
capacity as, or otherwise by reason of, or arising out of his being, a
director, officer, employee or other agent of the Company, or (b) by reason of
the fact he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise; or (ii) any inaction or omission on Indemnitee's
part while acting in any of the foregoing capacities. For purposes solely of
this Agreement, it shall be conclusively deemed between the parties that the
Indemnitee is serving at the request of the Company whenever such director
serves as an officer, director, employee or other agent of any business entity
controlling, controlled by or under common control with the Company.
1.2 "D & O Insurance" means directors' and officers'
liability insurance with coverage sufficient to ensure performance of the
indemnification obligation of the Company hereunder issued by one or more
reputable insurers.
1.3 "Excluded Claim" means any payment for Losses or
Expenses in connection with any claim: (i) for the return by Indemnitee of any
remuneration which is illegal; or (ii) for an accounting of profits in fact
made from the purchase or sale by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of any state law, if the Company is in fact
entitled to recover such profits; or (iii) resulting from Indemnitee's
knowingly fraudulent, deliberately dishonest or intentional misconduct; or (iv)
the payment of which by the Company under this Agreement is not permitted by
applicable law; or (v) initiated or brought voluntarily by Indemnitee and not
by way of defense, except with respect to proceedings brought to establish or
enforce a right to indemnification or advancement of Expenses and Losses or a
proceeding initiated with the approval of a majority of the members of the
Board of Directors.
Any facts pertaining to any other director, officer, employee
or agent of the Company shall not be imputed to Indemnitee for the purpose of
determining an Excluded Claim.
1.4 "Expenses" means any reasonable expenses incurred by
Indemnitee as a result of a claim or claims whether brought by or in the right
of the Company (e.g., derivatively by stockholders of the Company for the
benefit of the Company) or otherwise and whether of a civil, criminal,
administrative or investigative nature made against him for, or otherwise in
respect of, Covered Acts including, without limitation, counsel fees, costs of
bonds, and other costs of proceedings or appeals.
2
<PAGE> 131
1.5 "Loss" means any amount which Indemnitee pays or is
obligated to pay as a result of a claim or claims whether brought by or in the
right of the Company (e.g., derivatively by stockholders of the Company for the
benefit of the Company) or otherwise and whether of a civil, criminal,
administrative or investigative nature made against him or for or otherwise in
respect of Covered Acts including, without limitation, damages, judgments, sums
paid in settlement of such claim or claims, sums paid in respect of any
deductible under any policy of D & O Insurance, and fines and penalties other
than fines and penalties for which indemnification is not permitted by
applicable law.
2. Maintenance of D & O Insurance.
2.1 The Company hereby covenants and agrees that, as long
as Indemnitee shall continue to serve as a director or officer of the Company
and thereafter so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of his services to the Company, the
Company, subject to Section 2.3 hereof, shall obtain and maintain in full force
and effect D & O Insurance.
2.2 All policies of D & O Insurance shall be written in
such a manner as to provide Indemnitee the same rights and benefits, subject to
the same limitations, as are accorded to the Company's directors or officers
most favorably insured by such policy.
2.3 The Company shall have no obligation to maintain D &
O Insurance if the Board of Directors of the Company determines in good faith
that such insurance is not reasonably available, the premium costs for such
insurance are disproportionate to the amount of coverage provided, or the
coverage provided for such insurance is limited by exclusions so as to provide
an insufficient benefit.
3. Indemnification
3.1 The Company, at the request of Indemnitee, shall
indemnify Indemnitee and hold him harmless from any and all Losses and Expenses
subject, in each case, to the further provisions of this Agreement.
3.2 The protection afforded to Indemnitee hereunder is
intended to supplement the other protections to which Indemnitee may be
entitled now or hereafter under statutory law, the Company's Certificate of
Incorporation or Bylaws, the D & O Insurance, vote of stockholders or of
directors or otherwise, and all of such protections and the provisions hereof
are intended to be cumulative.
3.3 Indemnitee may seek such indemnification under
statutory law, the Company's Certificate of Incorporation or Bylaws, the D & O
Insurance, the provisions of Section 3.1 of this Agreement, or otherwise
concurrently or in such sequence as Indemnitee may choose, in his sole
discretion.
3
<PAGE> 132
3.4 The Company shall have no obligation to indemnify
Indemnitee for and hold him harmless from any Loss or Expense which constitutes
an Excluded Claim.
4. Indemnification Procedures.
4.1 Promptly after receipt by Indemnitee of notice of the
commencement of or of the threat of commencement of any action, suit or
proceeding, Indemnitee shall notify the Company of the commencement or threat
thereof; but the omission so to notify or delay in notifying the Company will
not relieve it from any liability which it may have to Indemnitee except to the
extent that the Company is actually prejudiced by any such omission or delay.
4.2 The Company shall give prompt notice of the
commencement of such action, suit or pending to the insurers on the D & O
Insurance, if any, in accordance with the procedures set forth in the
respective policies in favor of Indemnitee. The Company shall thereafter take
all necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts as a result of such action, suit or proceeding in
accordance with the terms of such policies.
4.3 If such action, suit or proceeding is other than by
or in the right of the Company, Indemnitee shall, assuming that the D & O
Insurance, if any, then provides for Indemnitee's defense, accept the defense
provided under the D & O Insurance. If it does not so provide for his defense,
or if Indemnitee determines that the insurers under the D & O Insurance are
unable or unwilling to defend, contest and protect Indemnitee adequately
against any such action, suit or proceeding, or if no D & O Insurance is
maintained pursuant to Section 2.3 hereof, Indemnitee may at his option, either
control the defense thereof himself or require the Company to defend him;
provided, however, that Indemnitee may not control the defense himself or
require the Company to defend him if such decision would jeopardize the
coverage provided by the D & O Insurance, if any, to the Company and/or the
other directors and officers covered thereby. If (a) Indemnitee require the
Company to defend him, (b) the Company does not maintain any D & O Insurance
pursuant to Section 2.3 hereof or (c) Indemnitee proceeds under the D & O
Insurance but Indemnitee determines that the insurers under the D & O Insurance
are unable or unwilling to defend, contest and protect Indemnitee adequately
against any such action, suit or proceeding, then the Company shall promptly
undertake to defend any such action, suit or proceeding, at the Company's sole
cost and expense, utilizing counsel of the Indemnitee's choice who has been
approved by the Company. If appropriate the Company shall have the right to
participate in the defense of such action, suit or proceeding.
4.4 If such action, suit or proceeding is by or in the
right of the Company, Indemnitee may, at his option, either control the defense
thereof himself or accept the defense provided under the D & O Insurance, if
any; provided, however, that Indemnitee may not control the defense himself if
such decision would jeopardize the coverage provided by the D & O Insurance, if
any, to the Company and/or the other directors and officers covered thereby.
4
<PAGE> 133
4.5 If the Company shall fail to defend, contest or
otherwise protect Indemnitee in a timely manner against any such action, suit
or proceeding which is not by or in the right of the Company, Indemnitee shall
have the right to do so, including without limitation, the right to make any
compromise or settlement thereof, and to recover from the Company all
attorney's fees, reimbursements and all amounts paid as a result thereof.
4.6 Expenses and Losses incurred or to be incurred by
Indemnitee from time to time as a result of any actions, suit or proceeding
covered by the indemnity provisions of this Agreement (including, without
limitation, an action, suit or proceeding by or in the right of the Company)
which have not been paid by the insurers under the D & O Insurance, if any,
shall be paid by the Company within 30 days of the written request of the
Indemnitee, whether or not the Company believes that such Expenses and Losses
may constitute an Excluded Claim. At the election of Indemnitee, Indemnitee
may from time to time request the Company to advance to his funds to pay any
expenses which would be subject to reimbursement hereunder. The Company shall
provide such advances within five business days after written request thereof.
Indemnitee agrees that he will reimburse the Company for all Losses and
Expenses paid or advanced by the Company in connection with any such action,
suit or proceeding against Indemnitee in the event, and only to the extent,
that a determination shall have been made by an arbitrator that Indemnitee is
not entitled to be indemnified by the Company for such Losses and Expenses
because the claim is an Excluded Claim.
5. Settlement. Except as otherwise provided in Section 4.5,
hereof, Indemnitee shall not settle any suit, action or proceeding without the
Company's prior written consent. The Company shall not settle any suit, action
or proceeding in any manner which would impose any obligation on Indemnitee
which is not covered by indemnification hereunder without Indemnitee's written
consent. Neither the Company nor Indemnitee shall unreasonably withhold their
consent to any proposed settlement.
6. Miscellaneous.
6.1 Notices. Any communication contemplated under this
Agreement shall be in writing and shall be effective upon personal delivery or
five days after deposit in the United States mail, postage prepaid, certified
or registered, return receipt requested, addressed as follows or to such other
address as may be specified in the same manner:
If to Company: Heftel Broadcasting Corporation
1645 North Vine Street
Suite 200
Hollywood, California 90028
Attention: President
With copy to:
5
<PAGE> 134
If to Indemnitee: To the address set forth on the
signature page hereof.
6.2 Enforcement.
(a) The burden of proving that indemnification is
not appropriate shall be on the Company and any actual determination by the
Company (including any determination made by its Board of Directors or
stockholders, or by independent legal counsel) that Indemnitee is not entitled
to indemnification hereunder shall not be a defense to such action or create a
presumption that Indemnitee has not met the applicable standard for
indemnification. If Indemnitee commences an action to enforce this Agreement,
the Company shall nevertheless be obligated, subject to Indemnitee's obligation
to reimburse the Company contained in Section 4.6 hereof, to pay Expenses and
Losses from time to time as incurred by Indemnitee.
(b) If any action is instituted under this
Agreement, or to enforce or interpret any of the terms of this Agreement, all
court costs and expenses, including reasonable counsel fees, incurred or to be
incurred by Indemnitee with respect to such action or arbitration shall be paid
by the Company within 30 days of written request by the Indemnitee, unless and
until an arbitrator determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous.
(c) All agreements and obligations of the Company
contained herein shall continue during the period the Indemnitee is a director,
officer, employee or agent of the Company (or is serving at the request of the
Company as a director, officer, employee or agent of another corporation or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was a director or officer of the Company or serving in any
other capacity referred to herein.
(d) The Company's indemnity obligations hereunder
shall be applicable to any and all claims made after the date hereof regardless
of when the facts upon which such claims are based occurred, including times
prior to the date hereof.
(e) The Company expressly confirms and agrees
that it has entered into this Agreement and assumed the obligations imposed on
the Company hereby, in order to induce Indemnitee to serve, or continue to
serve, as a director and/or officer of the Company, and acknowledges that
Indemnitee is relying upon this Agreement in agreeing to serve or in continuing
to serve in such capacity.
6.3 Provisions Not to Inure to Benefit of Insurers. It
is the intention of the parties in entering into this Agreement that the
insurers under the D & O Insurance, if any, shall be obligated ultimately to
pay any claims by Indemnitee which are covered by the D & O Insurance, and
nothing herein shall be deemed to diminish or otherwise restrict the Company's
or Indemnitee's right to proceed or collect against any insurers under the D &
O Insurance or to give such insurers any rights against the Company under or
with respect to this Agreement,
6
<PAGE> 135
including, without limitation, any right to be subrogated to Indemnitee's
rights hereunder, unless otherwise expressly agreed to by the Company in
writing and the obligation of such insurers to the Company and Indemnitee shall
not be deemed reduced or impaired in any respect by virtue of the provisions of
this Agreement.
6.4 Severability. In the event that any provision of
this Agreement is determined by a court to require the Company to do or to fail
to do any act which is in violation of applicable law, such provision shall be
limited or modified in its application to the minimum extent necessary to avoid
a violation of law and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their terms.
Without limiting the generality of the foregoing, if this Agreement or any
portion thereof shall be invalidated on any ground, the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated.
6.5 Partial Indemnification. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for
some or a portion of the Expenses and Losses but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses and Losses to which Indemnitee is entitled to
indemnification.
6.6 Choice of Law. The validity, construction,
performance, and enforcement of this Agreement, and each part thereof, shall be
governed by and construed in accordance with the laws of the State of Delaware,
applicable to agreements made and to be wholly performed in such state.
6.7 Successor and Assigns. This Agreement shall be (i)
binding upon all successors and assigns of the Company (including any
transferee of all or substantially all of its assets and any successor by
merger or otherwise by operation of law) and (ii) shall be binding on and inure
to the benefit of the heirs, personal representatives and estate of Indemnitee.
6.8 Amendment. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless made in writing and
signed by each of the parties hereto. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
6.9 Gender. Whenever the context so requires, the
masculine shall mean the feminine.
6.10 Arbitration. Any dispute or controversy arising
under or in connection with this Agreement or any other agreement entered into
in connection herewith, other than matters pertaining to injunctive relief,
including without, limitation, temporary restraining orders, preliminary
injunctions and permanent injunctions, shall, upon the written demand of either
party served upon the other party, be submitted to arbitration. Such
arbitration shall be held in the City of Los Angeles, California and conducted
in accordance with the provisions of
7
<PAGE> 136
the California Arbitration Act, as amended. The arbitrator's determination of
the dispute or controversy shall be final and binding on the parties. Judgment
may be entered on the arbitrator's award in any court having jurisdiction, and
the parties hereby consent to the jurisdiction of the courts of the State of
California (including the federal courts located therein) for this purpose.
The parties specifically confer upon the arbitrator the right to direct each of
the parties to produce in advance of the hearing(s) whatever documents the
arbitrator deems appropriate.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Agreement as of the date and year first above written.
"Company" HEFTEL BROADCASTING CORPORATION
By
------------------------------------------
"Indemnitee"
--------------------------------------------
Address:
------------------------------------
------------------------------------
8
<PAGE> 137
EXHIBIT 5.20
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
___________, 1996, by and among Heftel Broadcasting Corporation, a Delaware
corporation (the "Company"), and Clear Channel Communications, Inc., a Texas
corporation.
RECITALS
A. Clear Channel Communications, Inc. and Tichenor Media System,
Inc., a Texas corporation ("TMS"), have entered into that certain Agreement and
Plan of Merger dated July 9, 1996, as it may be amended (the "Merger
Agreement"), which has been assumed by the Company and which provides for the
merger of a wholly-owned subsidiary of the Company with and into TMS (the
"Merger").
B. Pursuant to the terms of the Merger Agreement, it is a
condition to the obligations of TMS thereunder that the Company grant certain
registration rights to Clear Channel (as hereinafter defined), with respect to
the shares of Class A Common Stock, par value $.001 per share (the "Common
Stock"), of the Company held from time to time by Clear Channel.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:
AGREEMENTS
1. Definitions. In addition to the terms defined elsewhere
herein, when used herein the following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with the first Person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person.
"Clear Channel" means Clear Channel Communications, Inc., a Texas
corporation, and its Affiliates.
"Commission" means the Securities and Exchange Commission.
"Conversion Date" means the date on which Clear Channel and its
Affiliates collectively beneficially own a greater number of shares of Common
Stock than the number of shares of Common Stock collectively beneficially owned
by Tichenor Holders.
"Demand Registration" has the meaning set forth in Section 2(a) below.
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"Demand Request" has the meaning set forth in Section 2(a) below.
"Exempt Registration Statement" means a registration statement on Form
S-4 or S-8 or any substitute form that may be adopted by the Commission or any
registration statement filed in connection with an exchange offer or offering
of securities solely to the Company's existing security holders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the value of the Registrable Securities
determined as follows: (i) if the security is listed on any established stock
exchange or a national market system, including, without limitation, the
National Market System of The Nasdaq Stock Market, its fair market value shall
be the average of the high and low sales prices or the average of the closing
bids if no sales were reported, as quoted on such system or exchange for the
five business days preceding the date of the Demand Request (or if there are no
sales or bids for such dates, then for the five last preceding business days
for such sales or bids), as reported in The Wall Street Journal or similar
publication; (ii) if the security is regularly quoted by a recognized
securities dealer but high and low selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for
the security for the five business days preceding the Demand Request (or if
there are no quoted prices for such dates, then for the five last preceding
business days for which there were quoted prices); or (iii) in the absence of
an established market for the security, the fair market value shall be
determined in good faith by the Company's Board of Directors, with reference to
the Company's net worth, prospective earning power, dividend-paying capacity
and other relevant factors, including the goodwill of the Company, the economic
outlook in the Company's industry, the Company's position in the industry and
its management, and the values of stock of other corporations in the same or
similar line of business (all such factors determined as of the date of a
Demand Request).
"Indemnified Party" has the meaning set forth in Section 7(c) below.
"Indemnifying Party" has the meaning set forth in Section 7(c) below.
"Inspectors" has the meaning set forth in Section 5(j) below.
"Material Adverse Effect" has the meaning set forth in Section 3(b)
below.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Holders" means any Person holding securities entitled to
piggyback registration rights that are pari passu with those provided in
Section 3 hereof, including the Tichenor Holders.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
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"Piggyback Registration" has the meaning set forth in Section 3(a)
below.
"Piggyback Securities" has the meaning set forth in Section 3(b)
below.
"Records" has the meaning set forth in Section 5(j) below.
"Registrable Securities" means the shares of Common Stock owned at any
time on or after the date hereof by Clear Channel and its Affiliates and other
securities issued or issuable with respect to such Common Stock by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or reorganization; provided, that any
Registrable Security will cease to be a Registrable Security when, after the
completion of the Merger, (a) a registration statement covering such
Registrable Security has been declared effective by the Commission and it has
been disposed of pursuant to such effective registration statement, (b) (i)
Clear Channel holds less than 100,000 shares of Registrable Securities and (ii)
it is eligible to be sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met, or (c) (i) it has been otherwise transferred and (ii)
it may be resold without subsequent registration under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 6 below.
"Required Filing Date" has the meaning set forth in Section 2(b)
below.
"Securities Act" means the Securities Act of 1933, as amended.
"Tichenor Holders" means those Persons defined as Holders in, and
entitled to certain demand and piggyback registration rights pursuant to, the
Tichenor Registration Rights Agreement.
"Tichenor Registration Rights Agreement" means that certain
Registration Rights Agreement, dated as of the date hereof, between the Company
and the Original Holders (as defined therein).
"Underwriter" means a securities dealer which purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
2. Demand Registration.
(a) Request for Registration. At any time Clear Channel
shall make a transfer to the shareholders of Clear Channel of Registrable
Securities in a pro rata distribution or upon a partial or complete liquidation
or dissolution of Clear Channel and it is necessary to register such
transaction under the Securities Act in order to deliver to such shareholders
freely transferable shares, Clear Channel may make a written request of the
Company (a "Demand Request") for registration under the Securities Act (a
"Demand Registration") of all or part of
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its Registrable Securities. The Company shall be obligated to register
Registrable Securities pursuant to a Demand Registration on one occasion only.
(b) Effective Registration and Expenses. Subject to
Section 4(c), the Company shall file the Demand Registration within 90 days
after receiving a Demand Request (the "Required Filing Date") and shall use all
commercially reasonable efforts to cause the same to be declared effective by
the Commission as promptly as practicable after such filing. A registration
will not count as a Demand Registration until it has become effective (unless
Clear Channel withdraws all of its Registrable Securities, in which case such
demand will count as a Demand Registration unless Clear Channel pays all
Registration Expenses in connection with such withdrawn registration);
provided, that if, after it has become effective, an offering of Registrable
Securities pursuant to a registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court, such registration will be deemed not to have been
effected.
3. Piggy-Back Registration.
(a) Subject to the provisions of this Agreement, if the
Company proposes to file a registration statement under the Securities Act with
respect to an offering of any equity securities by the Company for its own
account or for the account of any of its equity holders (other than an Exempt
Registration Statement), then the Company shall give written notice of such
proposed filing to Clear Channel as soon as practicable (but in no event less
than 30 days before the anticipated effective date of such registration
statement), and such notice shall offer Clear Channel the opportunity to
register such number of Registrable Securities as Clear Channel may request (a
"Piggyback Registration"). Subject to Section 3(b), the Company shall include
in each such Piggyback Registration all Registrable Securities requested to be
included in the registration for such offering by Clear Channel. Clear Channel
shall be permitted to withdraw all or part of its Piggyback Securities from a
Piggyback Registration at any time prior to the effective date thereof.
(b) The Company shall use all commercially reasonable
efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in the registration statement for such offering under Section 3(a)
(the "Piggyback Securities") to be included on the same terms and conditions as
any similar securities included therein. Notwithstanding the foregoing, the
Company shall not be required to include Clear Channel's Piggyback Securities
in such offering unless Clear Channel accepts the terms of the underwriting
agreement between the Company and the managing Underwriter or Underwriters and
otherwise complies with the provisions of Section 8 below. Furthermore, if,
(i) prior to the Conversion Date or (ii) subsequent to the Conversion Date and
subsequent to the exercise or termination of all demand registration rights
granted to the Tichenor Holders, the managing Underwriter or Underwriters of a
proposed underwritten offering advise the Company in writing that in their
opinion the total amount of securities, including Piggyback Securities and
other securities proposed to be registered by Other Holders pursuant to similar
piggyback registration rights, to be included in such offering is sufficiently
large to materially and adversely affect the price or success of the Offering
(a "Material Adverse Effect"), then in such event the securities to be included
in such offering shall be allocated first
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to the party initiating the proposed underwritten offering; second, to the
extent that any additional securities can, in the opinion of such managing
Underwriter or Underwriters, be sold without any such Material Adverse Effect,
pro rata (based on the number of Registrable Securities and other securities
requested to be included in such registration by Clear Channel or any Other
Holder) among Clear Channel and the Other Holders registering securities of the
Company pursuant to similar piggyback registration rights; and third, to the
extent the Company is not the party initiating such proposed underwritten
offering and that any additional securities can, in the opinion of such
managing Underwriter or Underwriters, be sold without any Material Adverse
Effect, to the Company. If, subsequent to the Conversion Date, but prior to
the exercise or termination of all demand registration rights granted to
Tichenor Holders, the managing Underwriter or Underwriters of a proposed
underwritten offering advise the Company in writing that in their opinion the
total amount of securities, including Piggyback Securities and other securities
proposed to be registered by Other Holders pursuant to similar piggyback
registration rights, to be included in such offering is sufficiently large to
cause a Material Adverse Effect, then in such event the securities to be
included in such offering shall be allocated first to the party initiating the
proposed underwritten offering; second, to the extent that any additional
securities can, in the opinion of such managing Underwriter or Underwriters, be
sold without any such Material Adverse Effect, (x) 50% of the total amount of
additional securities shall be allocated to the Tichenor Holders requesting
piggyback registration (which allocation shall be allocated pro rata among the
requesting Tichenor Holders based on the number of Registrable Securities
requested to be included in such registration) and (y) the remaining 50% of the
additional securities to be included shall be allocated pro rata among the
requesting Other Holders (excluding the shares included for the Tichenor
Holders pursuant to clause (x)) and Clear Channel (based upon the number of
Registrable Securities and other securities requested to be included in such
registration); and third, to the extent the Company is not the party initiating
such proposed underwritten offering and that any additional securities can, in
the opinion of such managing Underwriter or Underwriters, be sold without any
Material Adverse Effect, to the Company.
4. Holdback Agreements.
(a) Restrictions on Public Sale by Clear Channel. Clear
Channel agrees not to effect any public sale or distribution of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock,
including a sale pursuant to Rule 144 under the Securities Act, during the 14
days prior to, and during the 180-day period beginning on, the effective date
of a registration statement filed relating to a firm commitment underwritten
public offering of Common Stock or securities convertible into, or exchangeable
or exercisable for, Common Stock except as part of such registration if and to
the extent requested by the Company in the case of a nonunderwritten public
offering or if and to the extent requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public sale or distribution
of any securities similar to those being registered or any securities
convertible into or exchangeable or exercisable for such securities other than
pursuant to a registration statement on Form S-8 or any successor form, during
the 14 days prior to, and during the 180-day period beginning on, the effective
date of any
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registration statement which includes Registrable Securities (unless such sale
or distribution is pursuant to such registration statement pursuant to Section
3(b) or Clear Channel is participating in such registration statement pursuant
to Section 3 and such offering was initiated by the Company with respect to the
sale of securities by the Company) and (ii) that any agreement entered into
after the date of this Agreement pursuant to which the Company issues or agrees
to issue any privately placed securities shall contain a provision under which
holders of such securities agree not to effect any public sale or distribution
of any such securities during the period described in (i) above, including a
sale pursuant to Rule 144 under the Securities Act (except as part of any such
registration, if permitted); provided, however, that the provisions of this
paragraph (b) shall not prevent the conversion or exchange of any securities
pursuant to their terms into or for other securities.
(c) Deferral of Filing. The Company may defer the filing
(but not the preparation) of a registration statement required by Section 2
until a date not later than 90 days after the Required Filing Date if, at the
time the Company receives the Demand Request, the Company or its subsidiaries
are engaged in confidential negotiations or other confidential business
activities, disclosure of which would be required in such registration
statement (but would not be required if such registration statement were not
filed), and the Board of Directors of the Company determines in good faith that
such disclosure would be materially detrimental to the Company and its
stockholders. A deferral of the filing of a registration statement pursuant to
this Section 4(c) shall be lifted, and the requested registration statement
shall be filed forthwith, if the negotiations or other activities are disclosed
or terminated. In order to defer the filing of a registration statement
pursuant to this Section 4(c), the Company shall promptly, upon determining to
seek such deferral, deliver to Clear Channel a certificate signed by the
President of the Company stating that the Company is deferring such filing
pursuant to this Section 4(c) and the basis therefor in reasonable detail.
Within 20 days after receiving such certificate, may withdraw such request by
giving notice to the Company. If withdrawn, the Demand Request shall be deemed
not to have been made for all purposes of this Agreement. The Company may
defer the filing of a particular registration statement pursuant to this
Section 4(c) only once.
5. Registration Procedures. The Company will, at its expense,
use all commercially reasonable efforts to effect the registration of any
Registrable Securities under the Securities Act in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection with
any such request, the Company will as expeditiously as practicable:
(a) prepare and file with the Commission a registration
statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
registration of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use all
commercially reasonable efforts and proceed diligently and in good faith to
cause such filed registration statement to become effective under the
Securities Act; provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish
to Clear Channel and to one counsel reasonably acceptable to the Company
selected by Clear Channel, copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel; provided,
further, that in connection with a Demand Registration, the Company shall not
file any registration statement or prospectus, or any
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amendments or supplements thereto, if Clear Channel and its counsel shall
reasonably object, in writing, on a timely basis;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective pursuant to Section 2 for a period (except as provided in the last
paragraph of this Section 5) of not less than 180 consecutive days or, if
shorter, the period terminating when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and Rule
174 thereunder, if applicable) and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
method of disposition by Clear Channel set forth in such registration
statement;
(c) furnish to Clear Channel such number of copies of
such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as Clear Channel may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by Clear Channel;
(d) notify Clear Channel promptly, and (if requested by
any such Person) confirm such notice in writing, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective under the Securities Act and each applicable state
law, (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a registration
statement or related prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations or warranties of the Company or any
subsidiary contained in any agreement contemplated by Section 5(i) below cease
to be true and correct in any material respect, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event which makes any statement made in
such registration statement or related prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in such registration
statement, prospectus or documents so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the prospectus,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made
not misleading and (vii) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
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(e) use every commercially reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction in the United States, at the earliest practicable moment;
(f) cooperate with Clear Channel to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be registered, which certificates shall not bear any restrictive legends and
shall be in a form eligible for deposit with The Depositary Trust Company; and
enable such Registrable Securities to be registered in such names as Clear
Channel may request at least two business days prior to any registration of
Registrable Securities;
(g) use all commercially reasonable efforts to register
or qualify such Registrable Securities as promptly as practicable under such
other securities or blue sky laws of such jurisdictions as Clear Channel
reasonably (in light of the intended plan of distribution) requests and do any
and all other acts and things which may be reasonably necessary or advisable to
enable Clear Channel to consummate the disposition in such jurisdictions in the
United States of the Registrable Securities owned by Clear Channel; provided,
that the Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (g), (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction;
(h) use all commercially reasonable efforts to cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable Clear Channel to consummate
the disposition of such Registrable Securities;
(i) enter into customary agreements and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(j) make available for inspection by Clear Channel and
any attorney, accountant or other professional retained by Clear Channel
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in
connection with such registration statement. Records which the Company
determines, in good faith, to be confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such registration statement or (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. Clear Channel agrees that information
obtained by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its affiliates unless and until such is made
generally available to the public. Clear Channel further agrees that it will,
as soon as practicable upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the
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Company and allow the Company at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(k) use all commercially reasonable efforts to obtain a
comfort letter or comfort letters from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by comfort letters as Clear Channel reasonably requests;
(l) otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
(m) use all commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or quoted on any
inter- dealer quotation system on which similar securities issued by the
Company are then quoted;
(n) if any event contemplated by Section 5(d)(vi) above
shall occur, as promptly as practicable prepare a supplement or amendment or
post-effective amendment to such registration statement or the related
prospectus or any document incorporated therein by reference or promptly file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(o) cooperate and assist in any filing required to be
made with the NASD and in the performance of any due diligence investigation by
Clear Channel.
The Company may require Clear Channel to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as it may from time to time reasonably request and such
other information as may be legally required in connection with such
registration. Notwithstanding anything herein to the contrary, the Company
shall have the right to exclude from any offering the Registrable Securities of
Clear Channel if it does not comply with the provisions of the immediately
preceding sentence.
Clear Channel agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
5(d)(vi), Clear Channel will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until Clear Channel's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5(d)(vi), and, if so directed by the
Company, Clear Channel will deliver to the Company all copies, other than
permanent file copies, then in Clear Channel's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective
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(including the period referred to in Section 5(b)) by the number of days during
the period from and including the date of the giving of notice pursuant to
Section 5(d)(vi) to the date when the Company shall make available to Clear
Channel a prospectus supplemented or amended to conform with the requirements
of Section 5(d)(vi).
6. Registration Expenses. Subject to the provisions in Section
2(b) above with respect to a Demand Registration, in connection with any Demand
Registration or Piggyback Registration, the Company shall pay the following
registration expenses (the "Registration Expenses"): (a) all registration and
filing fees (including, without limitation, with respect to filings to be made
with the NASD), (b) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (c) printing expenses,
(d) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (e) the fees and expenses incurred in connection with the
listing on an exchange of the Registrable Securities if the Company shall
choose, or be required pursuant to Section 5(m) to list such Registrable
Securities, (f) reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters
requested pursuant to Section 5(k)), (g) the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, (h) reasonable fees and expenses of one counsel reasonably
acceptable to the Company selected by Clear Channel incurred in connection with
the registration of such Registrable Securities hereunder and (i) fees and
expenses of any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to Section 3 of Schedule E to
the Bylaws of the NASD. The Company shall not have any obligation to pay any
underwriting fees, discounts, or commissions attributable to the sale of
Registrable Securities or the fees and disbursements of counsel for any
Underwriter.
7. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify and hold harmless Clear Channel, each Person, if any, who controls
Clear Channel within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and the officers, directors, agents, general and
limited partners, and employees of Clear Channel and each such controlling
person from and against any and all losses, claims, damages, liabilities, and
expenses (including reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Securities or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by Clear Channel or on Clear
Channel's behalf expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this paragraph shall not apply to the extent that any such loss, claim,
damage, liability or expense results from the fact that a current copy of
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the prospectus was not sent or given to the Persons asserting any such loss,
claim, damage, liability or expense at or prior to the written confirmation of
the sale of the Registrable Securities concerned to such Person if it is
determined that (i) it was the responsibility of Clear Channel or any
Underwriter or dealer for Clear Channel to provide such person with a current
copy of the prospectus, (ii) Clear Channel was provided with a current copy of
the prospectus prior to the written confirmation of sale and (iii) such current
copy of the prospectus would have cured the defect giving rise to such loss,
claim, damage, liability or expense. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of Clear Channel provided in this Section 7(a).
(b) Indemnification by Clear Channel. Clear Channel
agrees to indemnify and hold harmless the Company, and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act and the officers, directors, agents and
employees of the Company and each such controlling Person to the same extent as
the foregoing indemnity from the Company to Clear Channel, but only with
respect to information furnished in writing by Clear Channel or on Clear
Channel's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities. The liability of Clear Channel under
this Section 7(b) shall be limited to the aggregate cash and property received
by Clear Channel pursuant to the sale of Registrable Securities covered by such
registration statement or prospectus.
(c) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall be
brought or asserted against any Person entitled to indemnification under
Section 7(a) or 7(b) above (an "Indemnified Party") in respect of which
indemnity may be sought from any party who has agreed to provide such
indemnification under Section 7(a) or 7(b) above (an "Indemnifying Party"), the
Indemnified Party shall give prompt notice to the Indemnifying Party and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Party, and shall assume
the payment of all reasonable expenses of such defense. Such Indemnified Party
shall have the right to employ separate counsel in any such action or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party has agreed to pay such fees and expenses, or (ii) the
Indemnifying Party fails promptly to assume the defense of such action or
proceeding or fails to employ counsel reasonably satisfactory to such
Indemnified Party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Party and
Indemnifying Party (or an Affiliate of the Indemnifying Party), and such
Indemnified Party shall have been advised by counsel that there is a conflict
of interest on the part of counsel employed by the Indemnifying Party to
represent such Indemnified Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party). Notwithstanding the foregoing, the Indemnifying
Party shall not, in connection with any one such action or proceeding or
separate but substantially similar related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable at any time for the fees and
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expenses of more than one separate firm of attorneys (together in each case
with appropriate local counsel for the Indemnified Party). The Indemnifying
Party shall not be liable for any settlement of any such action or proceeding
effected without its written consent (which consent will not be reasonably
withheld), but if settled with its written consent, or if there be a final
judgment for the plaintiff in any such action of proceeding, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Party from and against
any loss or liability (to the extent stated above) by reason of such settlement
or judgment. The Indemnifying Party shall not consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release, in form and substance satisfactory to the Indemnified Party, from all
liability in respect of such action or proceeding for which such Indemnified
Party would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in
this Section 7 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages, liabilities or judgments referred to herein, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments as between the
Company on the one band and Clear Channel on the other, in such proportion as
is appropriate to reflect the relative fault of the Company and of Clear
Channel in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of Clear Channel on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and Clear Channel agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), Clear
Channel shall not be required to contribute any amount in excess of the amount
by which the total price at which its Registrable Securities were offered to
the public exceeds the amount of any damages which it has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
8. Participation in Underwritten Registrations. Clear Channel
may not participate in any underwritten registration hereunder unless it (a)
agrees to sell its Registrable Securities
-12-
<PAGE> 149
on the basis provided in any underwriting arrangements approved by the Person
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement, and (c) if requested by another Person
participating in such underwritten registration, provides that all securities
convertible or exchangeable into Common Stock that are included in such
underwritten registration shall be so converted or exchanged on or prior to the
consummation thereof.
9. Marketing of Securities. Upon the registration of any
Registrable Securities pursuant to the terms of this Agreement, the Company
shall use all commercially reasonable efforts to participate in and cooperate
with the managing Underwriter or Underwriters in the marketing of such
Registrable Securities, including, but not limited to, participating in any
sales force presentations and any "roadshow" or other marketing presentations
deemed necessary by the managing Underwriter or Underwriters to market such
securities.
10. Additional Registration Rights. The Company shall not on or
after the date of this Agreement enter into any agreement granting registration
rights to any other Person with respect to the securities of the Company, that
are demand registration rights of the type described in Section 2 and do not
rank pari passu or subordinate to the rights granted under Section 2, or with
respect to any piggyback registration rights of the type described in Section
3, that are not pari passu or subordinate to the rights granted to Clear
Channel hereunder, without the prior written consent of Clear Channel. Any
agreement entered into pursuant to such consent shall not be amended without a
further written consent of Clear Channel. The Company represents and warrants
to Clear Channel that the Company has not granted registration rights to any
other Person with respect to the securities of the Company other than pursuant
to that certain Registration Rights Agreement of even date herewith among the
Company and McHenry T. Tichenor, Sr., McHenry T. Tichenor, Jr., Warren W.
Tichenor, William E. Tichenor, Jean T. Russell, McHenry T, Tichenor, Jr., as
Custodian for David T. Tichenor, Alta Subordinated Debt Partners III, L.P., a
Delaware limited partnership, Prime II Management, L.P., a Delaware limited
partnership, PrimeComm, L.P., A Delaware limited partnership, Ricardo A. del
Castillo, Jeffrey T. Hinson and David D. Lykes.
11. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company, Clear Channel and,
so long as the Tichenor Holders own at least 15% of the Common Stock
(calculated assuming all securities held by Clear Channel exercisable or
exchangeable for or convertible into Class B Common Stock have been so
exercised, exchanged or converted and the Class B Common Stock subject thereto
is outstanding and by treating the Class B Common Stock of the Company as
converted into Common Stock), the holders of at least a majority of the then
outstanding "Registrable Securities" (as defined in the Tichenor Registration
Rights Agreement).
-13-
<PAGE> 150
12. Notices. Any notices required or permitted to be given under
this Agreement shall be given in writing and shall be deemed received when
received by the relevant party at such party's address as set forth opposite
such party's signature to this Agreement whether personally delivered or sent
by mail or delivered by telefacsimile or similar device.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
[The remainder of this page is intentionally left blank.]
-14-
<PAGE> 151
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date
first written above.
HEFTEL BROADCASTING CORPORATION
Address: By:
100 Crescent Court, Suite 1777 ----------------------------------
Dallas, TX 75201 Name:
Attn: Chief Executive Officer --------------------------------
Title:
-------------------------------
CLEAR CHANNEL COMMUNICATIONS, INC.
Address: By:
200 Concord Plaza, Suite 600 ----------------------------------
San Antonio, TX 78216 Name:
Attn: Randall T. Mays --------------------------------
Title:
-------------------------------
-15-
<PAGE> 152
EXHIBIT 8.9
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (the "AGREEMENT"), dated as of ______, 1996,
is made by Heftel Broadcasting Corporation, a Delaware corporation ("HEFTEL"),
and ____________, a Texas corporation and wholly owned subsidiary of Heftel
("HEFTEL SUB").
Recitals
A. Clear Channel Communications, Inc., a Texas corporation
("PARENT"), and Tichenor Media System, Inc., a Texas corporation ("TICHENOR"),
are parties to that certain Agreement and Plan of Merger, dated as of July 9,
1996 (the "MERGER AGREEMENT"; capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Merger Agreement),
pursuant to which Heftel Sub will be merged with and into Tichenor (the
"MERGER").
B. Parent has completed the Heftel Acquisition and upon
completion thereof, Parent agreed, pursuant to the terms of the Merger
Agreement, to propose to Heftel and Heftel Sub that such entities agree to be
bound by the terms of the Merger Agreement as they relate to such entities and
use its reasonable efforts to cause the execution of this Agreement by Heftel
and Heftel Sub.
C. Pursuant to the terms of this Agreement, Heftel and Heftel Sub
each desire to become a party to the Merger Agreement as if they were original
parties to the Merger Agreement in accordance with Section 8.9(b) of the Merger
Agreement.
D. The board of directors of each of Heftel and Heftel Sub have
determined that the Merger is in the best interests of Heftel and Heftel Sub,
respectively, and that it is advisable and in the best interests of each of
Heftel and Heftel Sub to become a party to the Merger Agreement.
E. Accordingly, the board of directors of each of Heftel and
Heftel Sub have approved the Merger Agreement and recommended that their
respective stockholders approve and authorize the Merger Agreement and the
Merger.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
Statement of Agreement
1. Assignment and Assumption. Heftel and Heftel Sub hereby agree
that, effective as of the date hereof, the terms and provisions of the Merger
Agreement relating to them shall be binding upon them as if Heftel and Heftel
Sub were original parties to the Merger Agreement. Upon execution of this
Agreement, Heftel and Heftel Sub hereby agree to assume
<PAGE> 153
all of the rights and obligations set forth in the Merger Agreement relating to
each of them, respectively.
2. Captions. The captions and headings used in this Agreement
are for convenience only, do not constitute any part of this Agreement, and
shall be disregarded in construing the language hereof.
3. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
4. Further Assurances. From time to time hereafter and without
additional consideration, the parties hereto hereby agree to execute and
deliver, or cause to be executed and delivered, such additional or further
instruments, and otherwise provide such cooperation, as shall reasonably be
requested by any party to the Merger Agreement for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
5. 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 two or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HEFTEL BROADCASTING CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
----------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-2-
<PAGE> 1
EXHIBIT 99(c)(17)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 9th day of July 1996, by and among CLEAR CHANNEL COMMUNICATIONS,
INC., a Texas Corporation ("PARENT"), and MCHENRY T. TICHENOR, SR.
("SHAREHOLDER").
RECITALS
A. Parent and Tichenor Media System, Inc., a Texas corporation
("TICHENOR"), are parties to that certain Agreement and Plan of Merger, dated
as of July 9, 1996 (the "MERGER AGREEMENT"), pursuant to which a to-be-named
wholly owned subsidiary of Heftel Broadcasting Corporation, a Delaware
corporation ("HEFTEL"), will be merged with and into Tichenor (the "MERGER").
B. Shareholder desires to sell to Parent 1,666 shares (the
"SHARES") of common stock, par value $1.00 per share, of Tichenor.
C. Immediately prior to the closing and consummation of the
Merger, Shareholder shall sell and transfer to Parent and Parent shall purchase
and receive from Shareholder the Shares for the consideration and upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
STATEMENT OF AGREEMENT
1. Sale and Purchase.
a. Securities to be Transferred. On the Closing Date
(as defined in Section 5), Shareholder shall sell and transfer the
Shares to Parent and Parent shall purchase the Shares from
Shareholder.
b. Purchase Price for Shares. At the Closing (as
defined in Section 5), the Parent shall deliver to Shareholder, as the
purchase price of the Shares, consideration of $299,880 (the "PURCHASE
PRICE") paid by wire transfer.
c. Instruments of Conveyance and Transfer. At the
Closing, Shareholder shall deliver to Parent a certificate or
certificates representing the Shares registered in Shareholder's name,
together with duly executed stock powers endorsed to Parent with
signatures guaranteed by a national bank or trust company or such
other assignments or instruments of conveyance and transfer, in form
and substance satisfactory to Parent and its counsel, as shall be
effective to vest in Parent all of Shareholder's right, title and
interest in and to all of the Shares.
<PAGE> 2
2. Representations and Warranties by Shareholder. Shareholder
represents and warrants to Parent that:
a. As of the Closing, Shareholder will be the sole
record and beneficial owner of the Shares; no person will have a right
to acquire or direct the disposition, or hold a proxy or other right
to vote or direct the vote, of such Shares; and Shareholder will have
good title to such Shares, free and clear of any agreements,
restrictions, liens, adverse claims or encumbrances whatsoever. As of
the Closing, other than this Agreement and the Merger Agreement there
will be no option, warrant, right, call, proxy, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the sale, pledge or other
transfer or disposition of any of such Shares, any interest therein or
any rights with respect thereto, or relates to the voting,
disposition, exercise, conversion or control of such Shares, or (ii)
obligates Shareholder to grant, offer or enter into any of the
foregoing.
b. The sale by Shareholder of such Shares and the
delivery of the certificates representing such Shares to Parent
against receipt of payment therefor pursuant hereto will transfer to
Parent indefeasible title to such Shares, free and clear of all
agreements, trusts, liens, adverse claims and encumbrances whatsoever.
c. Shareholder has the full right, power, authority and
legal capacity to enter into this Agreement.
d. Shareholder has not entered into any agreement,
arrangement or understanding with any person or firm which will result
in the obligation of any person to pay any finder's fees, brokerage or
agent's commission or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
3. Covenants by Shareholder. Shareholder hereby covenants and
agrees that it will not enter into any transaction, take any action or by
inaction permit any event to occur that would result in any of its
representations or warranties herein contained not being true and correct at
and as of (i) the time immediately after the occurrence of such transaction,
action or event and (ii) the date of the Closing.
4. Representations by Parent. Parent hereby represents and
warrants to Shareholder that Parent is an "accredited investor" (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended), and that the Shares are being acquired with investment intent and not
with a view to resale.
5. Closing; Conditions to Closing. The closing of the sale to
and purchase by Parent of the Shares (the "CLOSING") shall occur at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100,
Dallas, TX 75201, or such other place agreed to by the parties hereto,
immediately prior to the closing of the Merger (the "CLOSING DATE"). The
Closing shall be conditioned upon, unless waived by Parent in its sole
discretion, (a) each of the representations and warranties made by Shareholder
in this Agreement being true and correct in all material respects at and as of
the time of Closing; (b) Shareholder having performed in
2
<PAGE> 3
all material respects each and every covenant and agreement contained in this
Agreement required to be performed by it by the time of Closing; and (c) all
conditions set forth in the Merger Agreement being satisfied or waived prior to
the closing of the Merger.
6. Severability. Any term or provision of this Agreement that 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. If 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.
7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay its
respective fees and expenses incurred in connection herewith.
9. Entire Agreement. This Agreement (together with the documents
and instruments received by the parties in connection with this Agreement)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
10. Amendments. This Agreement may not be amended or modified
except by a written instrument signed on behalf of each of the parties hereto.
11. Assignment; Binding Effect. Nothing contained in this
Agreement shall be deemed to prohibit Parent from assigning its rights to any
of its affiliates. Any such assignment shall not relieve Parent from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
12. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
a. If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall Mays (facsimile
transmission number: 210-822-2299), with a copy (which shall not
constitute notice) to Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
NationsBank Plaza, 300 Convent Street, Suite 1500, San Antonio, TX
78205, Attention: Stephen C. Mount (facsimile transmission number:
210-224-2035).
3
<PAGE> 4
b. If to Shareholder: at the address set forth on the
signature page hereof, with a copy (which shall not constitute notice)
to Michael Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow Center,
2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission
number: 214-999-7732).
13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
14. Termination. Upon (i) termination of the Merger Agreement for
any reason whatsoever or (ii) the failure of Shareholder to obtain all releases
of liens on its Shares prior to the merger contemplated by the Merger
Agreement, this Agreement shall immediately become void and there shall be no
further obligation hereunder on the part of any party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by themselves or their duly authorized representatives, on the date
first written above.
"PARENT"
CLEAR CHANNEL COMMUNICATIONS, INC.
By:/s/ RANDALL MAYS
------------------------------------
Name: Randall Mays
----------------------------------
Title: Vice President
---------------------------------
"SHAREHOLDER"
/s/ MCHENRY T. TICHENOR, SR.
---------------------------------------
McHenry T. Tichenor, Sr.
Address:
2925 Tumbleweed Trail
Grapevine, TX 76051
4
<PAGE> 1
EXHIBIT 99(c)(18)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 9th day of July 1996, by and among CLEAR CHANNEL COMMUNICATIONS,
INC., a Texas Corporation ("PARENT"), and MCHENRY T. TICHENOR, JR.
("SHAREHOLDER").
RECITALS
A. Parent and Tichenor Media System, Inc., a Texas corporation
("TICHENOR"), are parties to that certain Agreement and Plan of Merger, dated
as of July 9, 1996 (the "MERGER AGREEMENT"), pursuant to which a to-be-named
wholly owned subsidiary of Heftel Broadcasting Corporation, a Delaware
corporation ("HEFTEL"), will be merged with and into Tichenor (the "MERGER").
B. Shareholder desires to sell to Parent 3,333 shares (the
"SHARES") of common stock, par value $1.00 per share, of Tichenor.
C. Immediately prior to the closing and consummation of the
Merger, Shareholder shall sell and transfer to Parent and Parent shall purchase
and receive from Shareholder the Shares for the consideration and upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
STATEMENT OF AGREEMENT
1. Sale and Purchase.
a. Securities to be Transferred. On the Closing Date
(as defined in Section 5), Shareholder shall sell and transfer the
Shares to Parent and Parent shall purchase the Shares from
Shareholder.
b. Purchase Price for Shares. At the Closing (as
defined in Section 5), the Parent shall deliver to Shareholder, as the
purchase price of the Shares, consideration of $599,940 (the "PURCHASE
PRICE") paid by wire transfer.
c. Instruments of Conveyance and Transfer. At the
Closing, Shareholder shall deliver to Parent a certificate or
certificates representing the Shares registered in Shareholder's name,
together with duly executed stock powers endorsed to Parent with
signatures guaranteed by a national bank or trust company or such
other assignments or instruments of conveyance and transfer, in form
and substance satisfactory to Parent and its counsel, as shall be
effective to vest in Parent all of Shareholder's right, title and
interest in and to all of the Shares.
<PAGE> 2
2. Representations and Warranties by Shareholder. Shareholder
represents and warrants to Parent that:
a. As of the Closing, Shareholder will be the sole
record and beneficial owner of the Shares; no person will have a right
to acquire or direct the disposition, or hold a proxy or other right
to vote or direct the vote, of such Shares; and Shareholder will have
good title to such Shares, free and clear of any agreements,
restrictions, liens, adverse claims or encumbrances whatsoever. As of
the Closing, other than this Agreement and the Merger Agreement there
will be no option, warrant, right, call, proxy, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the sale, pledge or other
transfer or disposition of any of such Shares, any interest therein or
any rights with respect thereto, or relates to the voting,
disposition, exercise, conversion or control of such Shares, or (ii)
obligates Shareholder to grant, offer or enter into any of the
foregoing.
b. The sale by Shareholder of such Shares and the
delivery of the certificates representing such Shares to Parent
against receipt of payment therefor pursuant hereto will transfer to
Parent indefeasible title to such Shares, free and clear of all
agreements, trusts, liens, adverse claims and encumbrances whatsoever.
c. Shareholder has the full right, power, authority and
legal capacity to enter into this Agreement.
d. Shareholder has not entered into any agreement,
arrangement or understanding with any person or firm which will result
in the obligation of any person to pay any finder's fees, brokerage or
agent's commission or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
3. Covenants by Shareholder. Shareholder hereby covenants and
agrees that it will not enter into any transaction, take any action or by
inaction permit any event to occur that would result in any of its
representations or warranties herein contained not being true and correct at
and as of (i) the time immediately after the occurrence of such transaction,
action or event and (ii) the date of the Closing.
4. Representations by Parent. Parent hereby represents and
warrants to Shareholder that Parent is an "accredited investor" (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended), and that the Shares are being acquired with investment intent and not
with a view to resale.
5. Closing; Conditions to Closing. The closing of the sale to
and purchase by Parent of the Shares (the "CLOSING") shall occur at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100,
Dallas, TX 75201, or such other place agreed to by the parties hereto,
immediately prior to the closing of the Merger (the "CLOSING DATE"). The
Closing shall be conditioned upon, unless waived by Parent in its sole
discretion, (a) each of the representations and warranties made by Shareholder
in this Agreement being true and correct in all material respects at and as of
the time of Closing; (b) Shareholder having performed in
2
<PAGE> 3
all material respects each and every covenant and agreement contained in this
Agreement required to be performed by it by the time of Closing; and (c) all
conditions set forth in the Merger Agreement being satisfied or waived prior to
the closing of the Merger.
6. Severability. Any term or provision of this Agreement that 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. If 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.
7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay its
respective fees and expenses incurred in connection herewith.
9. Entire Agreement. This Agreement (together with the documents
and instruments received by the parties in connection with this Agreement)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
10. Amendments. This Agreement may not be amended or modified
except by a written instrument signed on behalf of each of the parties hereto.
11. Assignment; Binding Effect. Nothing contained in this
Agreement shall be deemed to prohibit Parent from assigning its rights to any
of its affiliates. Any such assignment shall not relieve Parent from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
12. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
a. If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall Mays (facsimile
transmission number: 210-822-2299), with a copy (which shall not
constitute notice) to Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
NationsBank Plaza, 300 Convent Street, Suite 1500, San Antonio, TX
78205, Attention: Stephen C. Mount (facsimile transmission number:
210-224-2035).
3
<PAGE> 4
b. If to Shareholder: at the address set forth on the
signature page hereof, with a copy (which shall not constitute notice)
to Michael Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow Center,
2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission
number: 214-999-7732).
13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
14. Termination. Upon (i) termination of the Merger Agreement for
any reason whatsoever or (ii) the failure of Shareholder to obtain all releases
of liens on its Shares prior to the merger contemplated by the Merger
Agreement, this Agreement shall immediately become void and there shall be no
further obligation hereunder on the part of any party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by themselves or their duly authorized representatives, on the date
first written above.
"PARENT"
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ RANDALL MAYS
------------------------------------
Name: Randall Mays
----------------------------------
Title: Vice President
---------------------------------
"SHAREHOLDER"
/s/ MCHENRY T. TICHENOR, JR.
---------------------------------------
McHenry T. Tichenor, Jr.
Address:
3924 Mockingbird Lane
Dallas, TX 75205
4
<PAGE> 1
EXHIBIT 99(c)(19)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 9th day of July 1996, by and among CLEAR CHANNEL COMMUNICATIONS,
INC., a Texas Corporation ("PARENT"), and WARREN TICHENOR ("SHAREHOLDER").
RECITALS
A. Parent and Tichenor Media System, Inc., a Texas corporation
("TICHENOR"), are parties to that certain Agreement and Plan of Merger, dated
as of July 9, 1996 (the "MERGER AGREEMENT"), pursuant to which a to-be-named
wholly owned subsidiary of Heftel Broadcasting Corporation, a Delaware
corporation ("HEFTEL"), will be merged with and into Tichenor (the "MERGER").
B. Shareholder desires to sell to Parent 3,333 shares (the
"SHARES") of common stock, par value $1.00 per share, of Tichenor.
C. Immediately prior to the closing and consummation of the
Merger, Shareholder shall sell and transfer to Parent and Parent shall purchase
and receive from Shareholder the Shares for the consideration and upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
STATEMENT OF AGREEMENT
1. Sale and Purchase.
a. Securities to be Transferred. On the Closing Date
(as defined in Section 5), Shareholder shall sell and transfer the
Shares to Parent and Parent shall purchase the Shares from
Shareholder.
b. Purchase Price for Shares. At the Closing (as
defined in Section 5), the Parent shall deliver to Shareholder, as the
purchase price of the Shares, consideration of $599,940 (the "PURCHASE
PRICE") paid by wire transfer.
c. Instruments of Conveyance and Transfer. At the
Closing, Shareholder shall deliver to Parent a certificate or
certificates representing the Shares registered in Shareholder's name,
together with duly executed stock powers endorsed to Parent with
signatures guaranteed by a national bank or trust company or such
other assignments or instruments of conveyance and transfer, in form
and substance satisfactory to Parent and its counsel, as shall be
effective to vest in Parent all of Shareholder's right, title and
interest in and to all of the Shares.
<PAGE> 2
2. Representations and Warranties by Shareholder. Shareholder
represents and warrants to Parent that:
a. As of the Closing, Shareholder will be the sole
record and beneficial owner of the Shares; no person will have a right
to acquire or direct the disposition, or hold a proxy or other right
to vote or direct the vote, of such Shares; and Shareholder will have
good title to such Shares, free and clear of any agreements,
restrictions, liens, adverse claims or encumbrances whatsoever. As of
the Closing, other than this Agreement and the Merger Agreement there
will be no option, warrant, right, call, proxy, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the sale, pledge or other
transfer or disposition of any of such Shares, any interest therein or
any rights with respect thereto, or relates to the voting,
disposition, exercise, conversion or control of such Shares, or (ii)
obligates Shareholder to grant, offer or enter into any of the
foregoing.
b. The sale by Shareholder of such Shares and the
delivery of the certificates representing such Shares to Parent
against receipt of payment therefor pursuant hereto will transfer to
Parent indefeasible title to such Shares, free and clear of all
agreements, trusts, liens, adverse claims and encumbrances whatsoever.
c. Shareholder has the full right, power, authority and
legal capacity to enter into this Agreement.
d. Shareholder has not entered into any agreement,
arrangement or understanding with any person or firm which will result
in the obligation of any person to pay any finder's fees, brokerage or
agent's commission or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
3. Covenants by Shareholder. Shareholder hereby covenants and
agrees that it will not enter into any transaction, take any action or by
inaction permit any event to occur that would result in any of its
representations or warranties herein contained not being true and correct at
and as of (i) the time immediately after the occurrence of such transaction,
action or event and (ii) the date of the Closing.
4. Representations by Parent. Parent hereby represents and
warrants to Shareholder that Parent is an "accredited investor" (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended), and that the Shares are being acquired with investment intent and not
with a view to resale.
5. Closing; Conditions to Closing. The closing of the sale to
and purchase by Parent of the Shares (the "CLOSING") shall occur at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100,
Dallas, TX 75201, or such other place agreed to by the parties hereto,
immediately prior to the closing of the Merger (the "CLOSING DATE"). The
Closing shall be conditioned upon, unless waived by Parent in its sole
discretion, (a) each of the representations and warranties made by Shareholder
in this Agreement being true and correct in all material respects at and as of
the time of Closing; (b) Shareholder having performed in
2
<PAGE> 3
all material respects each and every covenant and agreement contained in this
Agreement required to be performed by it by the time of Closing; and (c) all
conditions set forth in the Merger Agreement being satisfied or waived prior to
the closing of the Merger.
6. Severability. Any term or provision of this Agreement that 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. If 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.
7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay its
respective fees and expenses incurred in connection herewith.
9. Entire Agreement. This Agreement (together with the documents
and instruments received by the parties in connection with this Agreement)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
10. Amendments. This Agreement may not be amended or modified
except by a written instrument signed on behalf of each of the parties hereto.
11. Assignment; Binding Effect. Nothing contained in this
Agreement shall be deemed to prohibit Parent from assigning its rights to any
of its affiliates. Any such assignment shall not relieve Parent from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
12. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
a. If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall Mays (facsimile
transmission number: 210-822-2299), with a copy (which shall not
constitute notice) to Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
NationsBank Plaza, 300 Convent Street, Suite 1500, San Antonio, TX
78205, Attention: Stephen C. Mount (facsimile transmission number:
210-224-2035).
3
<PAGE> 4
b. If to Shareholder: at the address set forth on the
signature page hereof, with a copy (which shall not constitute notice)
to Michael Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow Center,
2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission
number: 214-999-7732).
13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
14. Termination. Upon (i) termination of the Merger Agreement for
any reason whatsoever or (ii) the failure of Shareholder to obtain all releases
of liens on its Shares prior to the merger contemplated by the Merger
Agreement, this Agreement shall immediately become void and there shall be no
further obligation hereunder on the part of any party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by themselves or their duly authorized representatives, on the date
first written above.
"PARENT"
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ RANDALL MAYS
------------------------------------
Name: Randall Mays
----------------------------------
Title: Vice President
---------------------------------
"SHAREHOLDER"
/s/ WARREN TICHENOR
---------------------------------------
Warren Tichenor
Address:
7701 Wurzbach Road, #1105
San Antonio, TX 78229
4
<PAGE> 1
EXHIBIT 99(c)(20)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 9th day of July 1996, by and among CLEAR CHANNEL COMMUNICATIONS,
INC., a Texas Corporation ("PARENT"), and WILLIAM TICHENOR ("SHAREHOLDER").
RECITALS
A. Parent and Tichenor Media System, Inc., a Texas corporation
("TICHENOR"), are parties to that certain Agreement and Plan of Merger, dated
as of July 9, 1996 (the "MERGER AGREEMENT"), pursuant to which a to-be-named
wholly owned subsidiary of Heftel Broadcasting Corporation, a Delaware
corporation ("HEFTEL"), will be merged with and into Tichenor (the "MERGER").
B. Shareholder desires to sell to Parent 4,166 shares (the
"SHARES") of common stock, par value $1.00 per share, of Tichenor.
C. Immediately prior to the closing and consummation of the
Merger, Shareholder shall sell and transfer to Parent and Parent shall purchase
and receive from Shareholder the Shares for the consideration and upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
STATEMENT OF AGREEMENT
1. Sale and Purchase.
a. Securities to be Transferred. On the Closing Date
(as defined in Section 5), Shareholder shall sell and transfer the
Shares to Parent and Parent shall purchase the Shares from
Shareholder.
b. Purchase Price for Shares. At the Closing (as
defined in Section 5), the Parent shall deliver to Shareholder, as the
purchase price of the Shares, consideration of $749,880 (the "PURCHASE
PRICE") paid by wire transfer.
c. Instruments of Conveyance and Transfer. At the
Closing, Shareholder shall deliver to Parent a certificate or
certificates representing the Shares registered in Shareholder's name,
together with duly executed stock powers endorsed to Parent with
signatures guaranteed by a national bank or trust company or such
other assignments or instruments of conveyance and transfer, in form
and substance satisfactory to Parent and its counsel, as shall be
effective to vest in Parent all of Shareholder's right, title and
interest in and to all of the Shares.
<PAGE> 2
2. Representations and Warranties by Shareholder. Shareholder
represents and warrants to Parent that:
a. As of the Closing, Shareholder will be the sole
record and beneficial owner of the Shares; no person will have a right
to acquire or direct the disposition, or hold a proxy or other right
to vote or direct the vote, of such Shares; and Shareholder will have
good title to such Shares, free and clear of any agreements,
restrictions, liens, adverse claims or encumbrances whatsoever. As of
the Closing, other than this Agreement and the Merger Agreement there
will be no option, warrant, right, call, proxy, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the sale, pledge or other
transfer or disposition of any of such Shares, any interest therein or
any rights with respect thereto, or relates to the voting,
disposition, exercise, conversion or control of such Shares, or (ii)
obligates Shareholder to grant, offer or enter into any of the
foregoing.
b. The sale by Shareholder of such Shares and the
delivery of the certificates representing such Shares to Parent
against receipt of payment therefor pursuant hereto will transfer to
Parent indefeasible title to such Shares, free and clear of all
agreements, trusts, liens, adverse claims and encumbrances whatsoever.
c. Shareholder has the full right, power, authority and
legal capacity to enter into this Agreement.
d. Shareholder has not entered into any agreement,
arrangement or understanding with any person or firm which will result
in the obligation of any person to pay any finder's fees, brokerage or
agent's commission or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
3. Covenants by Shareholder. Shareholder hereby covenants and
agrees that it will not enter into any transaction, take any action or by
inaction permit any event to occur that would result in any of its
representations or warranties herein contained not being true and correct at
and as of (i) the time immediately after the occurrence of such transaction,
action or event and (ii) the date of the Closing.
4. Representations by Parent. Parent hereby represents and
warrants to Shareholder that Parent is an "accredited investor" (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended), and that the Shares are being acquired with investment intent and not
with a view to resale.
5. Closing; Conditions to Closing. The closing of the sale to
and purchase by Parent of the Shares (the "CLOSING") shall occur at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100,
Dallas, TX 75201, or such other place agreed to by the parties hereto,
immediately prior to the closing of the Merger (the "CLOSING DATE"). The
Closing shall be conditioned upon, unless waived by Parent in its sole
discretion, (a) each of the representations and warranties made by Shareholder
in this Agreement being true and correct in all material respects at and as of
the time of Closing; (b) Shareholder having performed in
2
<PAGE> 3
all material respects each and every covenant and agreement contained in this
Agreement required to be performed by it by the time of Closing; and (c) all
conditions set forth in the Merger Agreement being satisfied or waived prior to
the closing of the Merger.
6. Severability. Any term or provision of this Agreement that 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. If 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.
7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay its
respective fees and expenses incurred in connection herewith.
9. Entire Agreement. This Agreement (together with the documents
and instruments received by the parties in connection with this Agreement)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
10. Amendments. This Agreement may not be amended or modified
except by a written instrument signed on behalf of each of the parties hereto.
11. Assignment; Binding Effect. Nothing contained in this
Agreement shall be deemed to prohibit Parent from assigning its rights to any
of its affiliates. Any such assignment shall not relieve Parent from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
12. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
a. If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall Mays (facsimile
transmission number: 210-822-2299), with a copy (which shall not
constitute notice) to Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
NationsBank Plaza, 300 Convent Street, Suite 1500, San Antonio, TX
78205, Attention: Stephen C. Mount (facsimile transmission number:
210-224-2035).
3
<PAGE> 4
b. If to Shareholder: at the address set forth on the
signature page hereof, with a copy (which shall not constitute notice)
to Michael Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow Center,
2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission
number: 214-999-7732).
13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
14. Termination. Upon (i) termination of the Merger Agreement for
any reason whatsoever or (ii) the failure of Shareholder to obtain all releases
of liens on its Shares prior to the merger contemplated by the Merger
Agreement, this Agreement shall immediately become void and there shall be no
further obligation hereunder on the part of any party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by themselves or their duly authorized representatives, on the date
first written above.
"PARENT"
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ RANDALL MAYS
---------------------------------------
Name: Randall Mays
--------------------------------------
Title: Vice President
-------------------------------------
"SHAREHOLDER"
/s/ WILLIAM TICHENOR
-------------------------------------------
William Tichenor
Address:
2933 Westminster Avenue
Dallas, TX 75205
4
<PAGE> 1
EXHIBIT 99(c)(21)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of the 9th day of July 1996, by and among CLEAR CHANNEL COMMUNICATIONS,
INC., a Texas Corporation ("PARENT"), and JEAN RUSSELL ("SHAREHOLDER").
RECITALS
A. Parent and Tichenor Media System, Inc., a Texas corporation
("TICHENOR"), are parties to that certain Agreement and Plan of Merger, dated
as of July 9, 1996 (the "MERGER AGREEMENT"), pursuant to which a to-be-named
wholly owned subsidiary of Heftel Broadcasting Corporation, a Delaware
corporation ("HEFTEL"), will be merged with and into Tichenor (the "MERGER").
B. Shareholder desires to sell to Parent 4,166 shares (the
"SHARES") of common stock, par value $1.00 per share, of Tichenor.
C. Immediately prior to the closing and consummation of the
Merger, Shareholder shall sell and transfer to Parent and Parent shall purchase
and receive from Shareholder the Shares for the consideration and upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
STATEMENT OF AGREEMENT
1. Sale and Purchase.
a. Securities to be Transferred. On the Closing Date
(as defined in Section 5), Shareholder shall sell and transfer the
Shares to Parent and Parent shall purchase the Shares from
Shareholder.
b. Purchase Price for Shares. At the Closing (as
defined in Section 5), the Parent shall deliver to Shareholder, as the
purchase price of the Shares, consideration of $749,880 (the "PURCHASE
PRICE") paid by wire transfer.
c. Instruments of Conveyance and Transfer. At the
Closing, Shareholder shall deliver to Parent a certificate or
certificates representing the Shares registered in Shareholder's name,
together with duly executed stock powers endorsed to Parent with
signatures guaranteed by a national bank or trust company or such
other assignments or instruments of conveyance and transfer, in form
and substance satisfactory to Parent and its counsel, as shall be
effective to vest in Parent all of Shareholder's right, title and
interest in and to all of the Shares.
<PAGE> 2
2. Representations and Warranties by Shareholder. Shareholder
represents and warrants to Parent that:
a. As of the Closing, Shareholder will be the sole
record and beneficial owner of the Shares; no person will have a right
to acquire or direct the disposition, or hold a proxy or other right
to vote or direct the vote, of such Shares; and Shareholder will have
good title to such Shares, free and clear of any agreements,
restrictions, liens, adverse claims or encumbrances whatsoever. As of
the Closing, other than this Agreement and the Merger Agreement there
will be no option, warrant, right, call, proxy, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that
directly or indirectly (i) calls for the sale, pledge or other
transfer or disposition of any of such Shares, any interest therein or
any rights with respect thereto, or relates to the voting,
disposition, exercise, conversion or control of such Shares, or (ii)
obligates Shareholder to grant, offer or enter into any of the
foregoing.
b. The sale by Shareholder of such Shares and the
delivery of the certificates representing such Shares to Parent
against receipt of payment therefor pursuant hereto will transfer to
Parent indefeasible title to such Shares, free and clear of all
agreements, trusts, liens, adverse claims and encumbrances whatsoever.
c. Shareholder has the full right, power, authority and
legal capacity to enter into this Agreement.
d. Shareholder has not entered into any agreement,
arrangement or understanding with any person or firm which will result
in the obligation of any person to pay any finder's fees, brokerage or
agent's commission or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
3. Covenants by Shareholder. Shareholder hereby covenants and
agrees that it will not enter into any transaction, take any action or by
inaction permit any event to occur that would result in any of its
representations or warranties herein contained not being true and correct at
and as of (i) the time immediately after the occurrence of such transaction,
action or event and (ii) the date of the Closing.
4. Representations by Parent. Parent hereby represents and
warrants to Shareholder that Parent is an "accredited investor" (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended), and that the Shares are being acquired with investment intent and not
with a view to resale.
5. Closing; Conditions to Closing. The closing of the sale to
and purchase by Parent of the Shares (the "CLOSING") shall occur at the offices
of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100,
Dallas, TX 75201, or such other place agreed to by the parties hereto,
immediately prior to the closing of the Merger (the "CLOSING DATE"). The
Closing shall be conditioned upon, unless waived by Parent in its sole
discretion, (a) each of the representations and warranties made by Shareholder
in this Agreement being true and correct in all material respects at and as of
the time of Closing; (b) Shareholder having performed in
2
<PAGE> 3
all material respects each and every covenant and agreement contained in this
Agreement required to be performed by it by the time of Closing; and (c) all
conditions set forth in the Merger Agreement being satisfied or waived prior to
the closing of the Merger.
6. Severability. Any term or provision of this Agreement that 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. If 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.
7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay its
respective fees and expenses incurred in connection herewith.
9. Entire Agreement. This Agreement (together with the documents
and instruments received by the parties in connection with this Agreement)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.
10. Amendments. This Agreement may not be amended or modified
except by a written instrument signed on behalf of each of the parties hereto.
11. Assignment; Binding Effect. Nothing contained in this
Agreement shall be deemed to prohibit Parent from assigning its rights to any
of its affiliates. Any such assignment shall not relieve Parent from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
12. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally, by
facsimile transmission or by registered or certified mail (postage prepaid and
return receipt requested) and shall be deemed given when received (or, if
mailed, five business days after the date of mailing) at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like
notice):
a. If to Parent: 200 Concord Plaza, Suite 600, San
Antonio, Texas 78216, Attention: Randall Mays (facsimile
transmission number: 210-822-2299), with a copy (which shall not
constitute notice) to Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
NationsBank Plaza, 300 Convent Street, Suite 1500, San Antonio, TX
78205, Attention: Stephen C. Mount (facsimile transmission number:
210-224-2035).
3
<PAGE> 4
b. If to Shareholder: at the address set forth on the
signature page hereof, with a copy (which shall not constitute notice)
to Michael Wortley, Vinson & Elkins L.L.P., 3700 Trammel Crow Center,
2001 Ross Avenue, Dallas, TX 75201-2975 (facsimile transmission
number: 214-999-7732).
13. Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
14. Termination. Upon (i) termination of the Merger Agreement for
any reason whatsoever or (ii) the failure of Shareholder to obtain all releases
of liens on its Shares prior to the merger contemplated by the Merger
Agreement, this Agreement shall immediately become void and there shall be no
further obligation hereunder on the part of any party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by themselves or their duly authorized representatives, on the date
first written above.
"PARENT"
CLEAR CHANNEL COMMUNICATIONS, INC.
By:/s/ RANDALL MAYS
------------------------------------
Name: Randall Mays
----------------------------------
Title: Vice President
---------------------------------
"SHAREHOLDER"
/s/ JEAN RUSSELL
---------------------------------------
Jean Russell
Address:
207 Primera
San Antonio, TX 78212
4
