SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): August 8, 1996 (April 11, 1996)
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MULTI-MARKET RADIO, INC.
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(Exact name of registrant as specified in charter)
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Delaware 0-22080 13-3707697
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(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
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150 East 58th Street, 19th Floor, New York, New York 10155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9150
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
AMENDMENT TO MERGER AGREEMENT WITH SFX BROADCASTING, INC.
On July 30, 1996, Multi-Market Radio, Inc. (the "Company") entered
into Amendment No. 2 to the Amended and Restated Agreement and Plan of Merger
(the "Merger Agreement") among SFX Broadcasting, Inc. ("SFX"), SFX Merger
Company, a wholly-owned subsidiary of SFX ("Acquisition Sub"), and the
Company. The Merger Agreement provides for the merger (the "Merger") of
Acquisition Sub with and into the Company, as a result of which the Company
will become a wholly-owned subsidiary of SFX. Amendment No. 2 increased the
value of the shares of SFX to be issued to the stockholders of the Company in
the Merger to $12.00, which value is subject to adjustment downward in the
event that the shares of Class A Common Stock of SFX trade below $32.00, and
adjustment upward in the event that the shares of Class A Common Stock of SFX
trade above $42.00, during a specified period prior to the consummation of the
Merger.
Amendment No. 2 further provides that, in the event that the Company
is unsuccessful in obtaining the exchange of at least 50% of its 1,840,000
outstanding Class B Warrants at a ratio of not more than two-tenths (.2) of a
share of Class A Common Stock of the Company for each such warrant, then the
ratio of shares of SFX to be issued in respect of each outstanding share of
stock of the Company shall be adjusted downward to the extent necessary to
reduce the total dollar value of the shares of SFX that would have otherwise
been received by the Company's security holders in the Merger by a dollar
amount equal to the product of $2.50 times the number of Class B Warrants of
the Company immediately after such exchange in excess of such 50% number. The
Merger Agreement previously provided that such dollar amount was $2.30.
In addition, pursuant to Amendment No. 2 (i) SFX agreed to negotiate in
good faith to enter into an agreement to advance up to $18.0 million to the
Company for the acquisition of a specified radio station and $5.0 million for
working capital and other general operating expenses and (ii) the Company agreed
to make available to SFX, until the earlier of the termination of the Merger
Agreement or the consummation of the Merger, the services of Michael G. Ferrel,
the President and Chief Executive Officer of the Company, on a consulting basis
to the extent that such services do not conflict with Mr. Ferrel's obligations
to the Company.
The foregoing description of Amendment No. 2 does not purport to be
complete and is qualified in its entirety by reference to the copy thereof
attached hereto as an exhibit, which is incorporated by reference.
EXECUTION OF VOTING AGREEMENTS AND LETTERS OF VOTING INTENT BY CERTAIN
STOCKHOLDERS
On July 26, 1996 (i) Gabriel Capital, L.P. and Ariel Fund Limited and
(ii) Chilton Investment Partners, L.P. and Richard L. Chilton, Jr., the
beneficial owners of 256,355 and 172,885 shares of Class A Common Stock of the
Company, respectively, agreed to vote the shares they own on the record date
for the special meeting of the stockholders of the Company in favor of the
Merger and against any competing transactions, provided that the Merger
Agreement is amended to increase the value of the shares of stock to be received
by the stockholders of the Company to $12.00.
On July 31, 1996, J. Morton Davis and D.H. Blair Investment Banking
Corp., the owners of 312,706 shares of Class A Common Stock of the Company,
agreed to vote the shares they own on the record date for the Special Meeting
in favor of the Merger, provided that the Merger Agreement is amended to
increase the value of the shares of stock to be received by the stockholders
of the Company to $12.00.
The investors who signed the voting agreements discussed above own an
aggregate of 23.0% of the outstanding shares of Class A Common Stock of the
Company as of July 29, 1996.
In addition, on April 11, 1996, each of Bruce Morrow, the Chairman of
the Board of the Company, Michael G. Ferrel, the President, Chief Operating
Officer and Chief Executive Officer of the Company, and Robert F.X. Sillerman,
a significant stockholder of the Company, executed a letter in which he stated
that it was his intention to vote in favor of the proposed merger between the
Company and SFX Broadcasting, Inc. and against any competing transaction. As
of July 29, 1996, Messrs. Morrow, Ferrel and Sillerman collectively own
237,000 shares of Class A
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Common Stock and 140,000 shares of Class B Common Stock, which represents
approximately 11.2% of the outstanding combined voting power of the shares of
common stock of the Company with respect to the Merger and approximately 28.3%
of the outstanding combined voting power of the shares of common stock of the
Company with respect to most other matters. The numbers and percentages set
forth in the previous sentence do not give effect to the conversion described
below under "Potential Conversion of Stock by Messrs. Sillerman and Ferrel."
POTENTIAL CONVERSION OF STOCK BY MESSRS. SILLERMAN AND FERREL
The Company's Restated Certificate of Incorporation provides that,
subject to the receipt of prior applicable Federal Communications Commission
("FCC") approval, Mr. Sillerman may convert his 360,000 non-voting (except as
required by law) shares of Class C Common Stock into an equal number of shares
of Class A Common Stock, or on or after July 29, 1998, or earlier after May
15, 1996 in the event that the Company is in default under any obligation for
borrowed money, into an equal number of shares of Class B Common Sock, which
generally have ten votes per share. On or after July 29, 1998, or earlier in
the event of such default or failure after May 15, 1996, Messrs. Sillerman and
Ferrel can convert their 200,000 non-voting (except as required by law) shares
of Original Preferred Stock into an equal number of ten-votes-per-share shares
of Class B Common Stock, subject to the receipt of prior FCC approval. Messrs.
Sillerman and Ferrel have filed an application with the FCC to convert their
shares of Class C Common Stock and shares of Original Preferred Stock into
shares of Class B Common Stock and the FCC has approved such application. The
Company's existing loan agreement with respect to its senior debt contains a
covenant which limits the Company's annual corporate overhead expenditures.
The Company has been in default of this covenant in each of the last two
years, in part due to its expansion through acquisitions consummated
subsequent to entering into such agreement, and has received waivers of such
default from its lender. Management of the Company believes that in the third
quarter of 1996 the Company will again exceed the limitation on annual
corporate overhead expenditures. Messrs. Sillerman and Ferrel have notified
the Company that they intend to convert their shares of Class C Common Stock
and shares of Original Preferred Stock into shares of Class B Common Stock
upon the occurrence of such default. Management of the Company believes that
the Company can obtain a waiver of such default from its lender, effective
simultaneously with such conversion. Such default and conversion is expected
to occur prior to the record date for the Special Meeting and will not affect
the number or class of the shares of SFX to be received by Mr. Sillerman in
the Merger. The shares of Original Preferred Stock have been placed in escrow
pursuant to which, in the event that such shares are converted into shares of
Class B Common Stock, Messrs. Sillerman and Ferrel may vote such shares but
are prohibited from transferring such shares prior to July 29, 1998. Upon such
conversion into shares of Class B Common Stock, Mr. Sillerman may be deemed to
beneficially own shares representing 17.3% of the outstanding combined voting
power with respect to the approval of the Merger and 50.1% with respect to
most other matters, giving Mr. Sillerman control over almost all matters to be
voted on by the stockholders of the Company (including, without limitation,
the election of a majority of directors).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
2.1 Amendment No. 2, dated as of July 30, 1996, to the Amended
and Restated Agreement and Plan of Merger, dated as of April
15, 1996, as amended on May 6, 1996, among SFX Broadcasting,
Inc., SFX Merger Company and Multi-Market Radio, Inc.
10.1 Form of Escrow Agreement, dated as of July 31, 1996, by and
among Kraig G. Fox, Multi-Market Radio, Inc., Bruce Morrow,
Myles Schumer and Edward Simon relating to the Series A
Convertible Preferred Stock of Multi-Market Radio, Inc.
10.2 Form of Escrow Agreement, dated as of July 31, 1996, by and
among Kraig G. Fox, Multi-Market Radio, Inc., Robert F.X.
Sillerman and Michael G. Ferrel relating to the Original
Preferred Stock of Multi-Market Radio, Inc.
10.3 Form of Escrow Agreement, dated as of July 31, 1996, by and
among Kraig G. Fox, Multi-Market Radio, Inc., Bruce Morrow,
Myles Schumer and Edward Simon relating to the Series B
Convertible Preferred Stock of Multi-Market Radio, Inc.
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10.4 Form of Escrow Agreement, dated as of July 31, 1996, by and
among Kraig G. Fox, Multi-Market Radio, Inc., Robert F.X.
Sillerman, Sillerman Communications Management Corporation,
Michael Ferrel and Howard Tytel relating to the Series A
Convertible Preferred Stock of Multi-Market Radio, Inc.
10.5 Form of Escrow Agreement, dated as of July 31, 1996, by and
among Kraig G. Fox, Multi-Market Radio, Inc., Robert F.X.
Sillerman, Sillerman Communications Management Corporation,
Michael Ferrel and Howard Tytel relating to the Series B
Convertible Preferred Stock of Multi-Market Radio, Inc.
99.1 Voting agreement, dated July 26, 1996, executed by Chilton
Investment Partners, L.P. and Richard L. Chilton.
99.2 Voting agreement, dated July 26, 1996, executed by Gabriel
Capital, L.P. and Ariel Fund Limited.
99.3 Voting agreement, dated July 31, 1996, executed by J. Morton
Davis and D.H. Blair Investment Banking Corp.
99.4 Form of letter of voting intent executed by certain
stockholders of Multi-Market Radio, Inc.
99.5 Press release, dated August 8, 1996, of Multi-Market Radio,
Inc. announcing its financial results for the three-month
period ended June 30, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
MULTI-MARKET RADIO, INC.
By: /s/ Jerry D. Emlet
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Name: Jerry D. Emlet
Title: Chief Financial Officer
Date: August 8, 1996
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EXHIBIT INDEX
Exhibit Description
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2.1 Amendment No. 2, dated as of July 30, 1996, to the Amended and
Restated Agreement and Plan of Merger, dated as of April 15, 1996, as
amended on May 6, 1996, among SFX Broadcasting, Inc., SFX Merger
Company and Multi-Market Radio, Inc.
10.1 Form of Escrow Agreement, dated as of July 31, 1996, by and among Kraig
G. Fox, Multi-Market Radio, Inc., Bruce Morrow, Myles Schumer and
Edward Simon relating to the Series A Convertible Preferred Stock of
Multi-Market Radio, Inc.
10.2 Form of Escrow Agreement, dated as of July 31, 1996, by and among Kraig
G. Fox, Multi-Market Radio, Inc., Robert F.X. Sillerman and Michael G.
Ferrel relating to the Original Preferred Stock of Multi-Market Radio,
Inc.
10.3 Form of Escrow Agreement, dated as of July 31, 1996, by and among Kraig
G. Fox, Multi-Market Radio, Inc., Bruce Morrow, Myles Schumer and
Edward Simon relating to the Series B Convertible Preferred Stock of
Multi-Market Radio, Inc.
10.4 Form of Escrow Agreement, dated as of July 31, 1996, by and among Kraig
G. Fox, Multi-Market Radio, Inc., Robert F.X. Sillerman, Sillerman
Communications Management Corporation, Michael Ferrel and Howard Tytel
relating to the Series A Convertible Preferred Stock of Multi-Market
Radio, Inc.
10.5 Form of Escrow Agreement, dated as of July 31, 1996, by and among Kraig
G. Fox, Multi-Market Radio, Inc., Robert F.X. Sillerman, Sillerman
Communications Management Corporation, Michael Ferrel and Howard Tytel
relating to the Series B Convertible Preferred Stock of Multi-Market
Radio, Inc.
99.1 Voting agreement, dated July 26, 1996, executed by Chilton Investment
Partners, L.P. and Richard L. Chilton.
99.2 Voting agreement, dated July 26, 1996, executed by Gabriel Capital,
L.P. and Ariel Fund Limited.
99.3 Voting agreement, dated July 31, 1996, executed by J. Morton Davis and
D.H. Blair investment Banking Corp.
99.4 Form of letter of voting intent executed by certain stockholders of
Multi-Market Radio, Inc.
99.5 Press release, dated August 8, 1996, of Multi-Market Radio,
Inc. announcing its financial results for the three-month
period ended June 30, 1996.
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 2, dated as of July 30, 1996 ("Amendment
No. 2") to the Amended and Restated Agreement and Plan of Merger, dated as of
April 15, 1996 (the "Agreement" and, as amended by Amendment No. 1 dated as of
May 6, 1996 and Amendment No. 2, the "Amended Agreement"), by and among SFX
BROADCASTING, INC., a Delaware corporation ("SFX"), SFX MERGER COMPANY, a
Delaware corporation and a direct wholly-owned subsidiary of SFX ("Acquisition
Sub"), and MULTI-MARKET RADIO, INC., a Delaware corporation ("MMR").
W I T N E SS E T H:
WHEREAS, Acquisition Sub, upon the terms and subject to the
conditions of this Agreement and in accordance with the General Corporation
Law of the State of Delaware ("Delaware Law"), intends to merge with and into
MMR (the "Merger");
WHEREAS, the Board of Directors of MMR (a) has determined
that it is in the best interests of MMR and its stockholders to amend the
Agreement and has approved and adopted this Amendment No. 2 and (b) has
recommended the approval and adoption of the Amended Agreement and the
approval of the Merger by, and directed that the Amended Agreement and the
Merger be submitted to a vote of, the stockholders of MMR;
WHEREAS, the Board of Directors of SFX (a) has determined
that it is in the best interests of SFX and its stockholders to amend the
Agreement and has approved and adopted this Amendment No. 2 and (b) has
recommended the approval and adoption of the Amended Agreement and the
approval of the Merger by, and directed that the Amended Agreement and the
Merger be submitted to a vote of, the stockholders of SFX;
WHEREAS, the Board of Directors of Acquisition Sub has
determined that it is in the best interests of Acquisition Sub and its
stockholder, to amend the Agreement and has approved and adopted the Amended
Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, SFX, Acquisition Sub and MMR hereby agree as follows:
ARTICLE I -- AMENDMENTS
SECTION 1.01. EXCHANGE RATIO. Section 2.01(b) of the
Agreement is hereby amended to read, in its entirety, as follows:
"(b) For purposes of this Agreement, subject to adjustments
required by Section 6.16, "Exchange Ratio" shall mean the number of
shares of SFX Class A Common Stock or SFX Class B Common Stock, as
the case may be, equal to the
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quotient obtained by dividing $12.00 by the average of the Reported
Price (as defined hereafter) for the twenty (20) consecutive trading
days ending on the fifth trading day prior to the Effective Time
(such average Reported Price being the "SFX Class A Common Stock
Price") (the fifth trading day prior to the Effective Time being
referred to as the "Determination Date"), on the primary exchange on
which the SFX Class A Common Stock is traded, including the Nasdaq
National Market; provided, however, that (1) in the event that the
SFX Class A Common Stock Price exceeds $42.00 but is equal to or less
than $44.00, then the Exchange Ratio shall be the quotient obtained
by dividing (i) the sum of (A) $12.00, plus (B) the product of (I)
twenty-five percent (25%), multiplied by (II) the difference between
the SFX Class A Common Stock Price and $42.00 by (ii) the SFX Class A
Common Stock Price; (2) in the event that the SFX Class A Common
Stock Price exceeds $44.00, then the Exchange Ratio shall be the
quotient obtained by dividing (i) the sum of (A) $12.50, plus (B) the
product of (I) thirty percent (30%), multiplied by (II) the
difference between the SFX Class A Common Stock Price and $44.00 by
(ii) the SFX Class A Common Stock Price; or (3) in the event that the
SFX Class A Common Stock Price is less than $32.00 then the Exchange
Ratio shall be .3750. All arithmetic calculations pursuant to this
paragraph shall be made through the fourth decimal place (i.e., to
the closest ten-thousandth). For purposes of this Agreement,
"Reported Price" shall mean, with respect to each trading day, the
average of the last reported bid and asked prices of the SFX Class A
Common Stock on such trading day."
SECTION 1.02. WARRANTS. Section 2.05(a) of the Agreement is
hereby amended by deleting the word "whole" in the second sentence thereof and
adding the following sentence at the end of the Section 2.05(a):
"Notwithstanding anything to the contrary, nothing
herein shall prohibit SFX from issuing fractional shares of
SFX Class A Common Stock upon the exercise of any Warrant."
SECTION 1.03. MINIMUM PER SHARE. Section 6.16 of the
Agreement is hereby amended to read, in its entirety, as follows:
SECTION 6.16. WARRANTS; MAKE WHOLE ADJUSTMENT.
"(a) Subject to applicable laws, MMR shall, at the
request of SFX, use all commercially reasonable efforts to
(a) commence an offer to exchange MMR Class A Common Stock
for all outstanding Class B Warrants, which offer shall not
be greater than 0.2 (two-tenths) shares of MMR Class A
Common Stock for each such Class B Warrant and (b) cooperate
with SFX in connection with the solicitation of the purchase
of all of the outstanding Unit Purchase Options and IPO
Warrants. Any documents prepared by MMR to effectuate such
offer to exchange and solicitations shall be in form and
substance reasonably satisfactory to SFX and its counsel.
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In the event that MMR is unsuccessful in obtaining the
exchange of at least 50% of the outstanding Class B Warrants at the
ratio set forth above on or prior to the Determination Date, the
Exchange Ratio set forth in Section 2.01(b) above shall be adjusted
downward to the extent necessary to reduce the total dollar value of
the SFX Class A Common Stock and SFX Class B Common Stock that would
have otherwise been received by MMR security holders on the Effective
Date (in each case calculated with reference to the SFX Class A
Common Stock Price) by a dollar amount equal to the product of $2.50
times the number of Class B Warrants outstanding immediately after
such exchange in excess of such 50% number. In calculating the total
value of SFX Class A Common Stock and SFX Class B Common Stock
received by MMR security holders, each share of SFX Class B Common
Stock shall be deemed to have the same value as a share of SFX Class
A Common Stock.
(b) In the event that SFX delivers the Make Whole Notice (as
defined in and subject to the conditions of Section 8.01(l)) to MMR
and does not deliver a Make Whole Rescission Notice (as defined in
Section 8.01(l)), the Exchange Ratio (x) shall be determined pursuant
to Section 2.01(b) if the SFX Class A Common Stock Price equals or
exceeds $27.33 and (y) if the SFX Class A Common Stock Price is less
than $27.33, shall be increased such that, on the Determination Date,
the product of the (a) Exchange Ratio as so adjusted, multiplied by
(b) SFX Class A Common Stock Price shall be an amount equal to $10.25
(such amount being referred to as the "Minimum Per Share Amount")."
SECTION 1.04. ADVANCE. The Agreement is hereby amended to add
the following at the end of Section 6.17:
"If requested by MMR, SFX shall negotiate in good faith to
enter into an agreement to advance up to $18 million to MMR to enable
MMR to acquire WKSS-FM, Hartford, Connecticut and up to $5 million to
MMR for working capital and other general operating purposes."
SECTION 1.05. CONSULTING ARRANGEMENT. The Agreement is hereby
amended to add a new SECTION 6.20 which shall read, in its entirety, as follows:
"SECTION 6.20. CONSULTING ARRANGEMENT. Commencing July 30,
1996 and continuing until the earlier of (x) the termination of this
Agreement and (y) the Effective Time, MMR will make available to SFX
the services of Michael G. Ferrel, the President and Chief Executive
Officer of MMR, on a consulting basis to the extent that such services
do not conflict with Mr. Ferrel's obligations to MMR. Neither Mr.
Ferrel nor MMR shall receive any compensation for such services."
SECTION 1.06. TERMINATION. The first sentence of Section
8.01(l)(A) of the Agreement is hereby amended by substituting "$27.33" for
"$28.52" in the two (2) places in which such figure appears in such sentence.
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ARTICLE II -- GENERAL PROVISIONS
SECTION 2.01. CERTAIN DEFINITIONS. Capitalized terms used in
this Amendment No. 2 but not defined herein shall have the meanings set forth in
the Agreement.
SECTION 2.02. SEVERABILITY. If any term or other provision
of this Amendment No. 2 is invalid, illegal or incapable of being enforced by
any rule of Law, or public policy, all other conditions and provisions of this
Amendment No. 2 and the Amended Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the
Transactions is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify the Amended Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order
that the Transactions be consummated as originally contemplated to the fullest
extent possible.
SECTION 2.03. GOVERNING LAW. EXCEPT TO THE EXTENT THAT
DELAWARE LAW IS MANDATORILY APPLICABLE TO THE MERGER AND THE RIGHTS OF THE
STOCKHOLDERS OF MMR AND ACQUISITION SUB, THIS AMENDMENT NO. 2 SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE RULES OF CONFLICTS OF LAW THEREOF. ALL ACTIONS AND
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AMENDMENT NO. 2 SHALL BE HEARD
AND DETERMINED IN ANY COURT SITTING IN THE CITY OF NEW YORK, STATE OF NEW
YORK.
SECTION 2.04. NO OTHER CHANGE/HEADINGS. All other terms and
conditions of the Agreement shall remain unchanged. The descriptive headings
contained in this Amendment No. 2 are included for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Amendment No. 2.
SECTION 2.05. COUNTERPARTS. This Amendment No. 2 may be
executed and delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, SFX, Acquisition Sub and MMR have caused
this Amendment No. 2 to be executed as of the date first written above by
their respective officers thereunto duly authorized.
SFX BROADCASTING, INC.
By \s\ Robert F.X. Sillerman
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Robert F.X. Sillerman, Chief Executive Officer
SFX MERGER COMPANY
By \s\ Robert F.X. Sillerman
----------------------------------------------
Robert F.X. Sillerman, President
MULTI-MARKET RADIO, INC.
By \s\ Michael G. Ferrel
----------------------------------------------
Michael G. Ferrel, Chief Executive Officer
5
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ESCROW AGREEMENT
AGREEMENT, dated as of the 31st day of July, 1996, by and
among Kraig G. Fox (hereinafter referred to as the "Escrow Agent"),
Multi-Market Radio, Inc., a Delaware corporation (the "Company"), and the
individuals and entities listed on Exhibit A who have executed this agreement
(hereinafter collectively called the "Stockholders").
WHEREAS, the Board of Directors of the Company has approved
the issuance of shares of Series A Convertible Preferred Stock, par value $.01
per share (the "Series A Stock") to the Stockholders pursuant to a
compensation plan approved by the stockholders of the Company at the 1995
Annual Stockholders Meeting;
WHEREAS, pursuant to the terms of the Certificate of
Designations in respect of the Series A Stock, each share of Series A Stock is
convertible into one share of the Company's Class A Common Stock, par value
$.01 per share ("Class A Common Stock") in the event that the Company
generates broadcast cash flow (as defined in the certificate of designations)
of at least $5 million for the fiscal year ending December 31, 1995 and the
closing sales price of Class A Common Stock for the thirty (30) trading days
immediately preceding the conversion exceeds $7.50 per share;
WHEREAS, the Board of Directors of the Company has
determined that the conditions to the conversion of Series A Stock into Class
A Common Stock have been satisfied; and
<PAGE>
WHEREAS, the Stockholders and the Company have agreed to
deposit in escrow the shares of Series A Stock and shares of Class A Common
Stock issuable upon the conversion of such Series A Stock and any other
securities or property that such securities are or otherwise become
convertible into or otherwise receive or are entitled to receive (the "Escrow
Shares").
In consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. The Stockholders and the Company hereby appoint Kraig G.
Fox, as Escrow Agent, and Kraig G. Fox, by his execution of this Agreement
hereby acknowledges and accepts his appointment as Escrow Agent to hold the
Escrow Shares in escrow, upon the terms, provisions and conditions hereof.
This Agreement shall become effective on the date hereof (the "Effective
Date") and shall continue in effect until the distribution by the Escrow Agent
of all of the Escrow Shares in accordance with the terms hereof (the
"Termination Date"). The period of time form the Effective Date until the
Termination Date is referred to herein as the "Escrow Period."
2. The Company shall cause stock certificates representing
the Series A Stock for each of the Stockholders in the amount set forth on
Exhibit A hereto to be issued registered in the name of Kraig G. Fox, as
Escrow Agent, and shall cause such certificates to be delivered to the Escrow
Agent within five (5) business days of the Effective Date. Said certificates
shall contain the legend set forth in Paragraph 9(a) hereof. Within five (5)
business days of receipt of the stock certificates representing the Series A
Stock, the Escrow Agent shall
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deliver such stock certificates to the Company's transfer agent with
irrevocable instructions to issue and deliver to the Escrow Agent stock
certificates representing shares of Class A Common Stock for each of the
Stockholders registered in the name of the Escrow Agent, in exchange for the
Series A Stock. Said certificates shall have the legend set forth in Paragraph
9(a) hereof.
3. During the Escrow Period, any and all of the money,
securities, rights or property distributed in respect of the Escrow Shares
then held in escrow, including any such property distributed as dividends or
pursuant to any stock split, merger, recapitalization, dissolution, or total
or partial liquidation of the Company shall be delivered to the Escrow Agent,
such property to be held and distributed as herein provided and is hereinafter
referred to collectively as the "Escrow Property."
4. The Escrow Shares of each Stockholder shall vest in five
equal annual installments beginning on April 30, 1997 (the "Initial
Disbursement Date") provided that each such Stockholder is available to
provide substantial services for and serve as a director of the Company during
each fiscal year ended December 31 immediately preceding such April 30. After
each fiscal year, the Company shall deliver to the Escrow Agent a certificate
stating whether such Stockholder was available to perform substantial services
for (as defined in Treasury Regulation 1-83-3(c)) and to serve as a director
of the Company during the most recent fiscal year-end. If the Company
certifies to the Escrow Agent, the Escrow Agent shall take such necessary
action, within thirty (30) days of receipt of said certificate, to cause the
Company's transfer agent to (i) reissue a stock certificate in the name of the
Stockholder for 20% of the total shares set forth on Exhibit A or such other
Escrow Property ("Vested Amount") which stock
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<PAGE>
certificate shall not contain the legend set forth in Paragraph 9(a) hereof
and, (ii) issue and deliver to the Escrow Agent a stock certificate in the
name of the Escrow Agent for the remaining shares of Class A Common Stock
which certificate shall contain the legend set forth in Paragraph 9(a) hereof.
If the Company fails to deliver said certificate, the Escrow Agent shall take
such action to cause the Company's transfer agent to cancel shares of Class A
Common Stock equal to the Vested Amount and reissue a certificate in the name
of the Escrow Agent for the remaining shares of Class A Common Stock which
certificate shall contain the legend set forth in Paragraph 9(a) hereof. After
any such cancellation of stock, the Stockholders shall have no further rights
as a stockholder of the Company with respect to any of the canceled Escrow
Shares. Upon receipt of any unlegended stock certificates for shares of Class
A Common Stock in the name of a Stockholder, the Escrow Agent shall cause such
certificate to be delivered to such Stockholder.
5. The Company shall present such documentation as is
reasonably required by the Escrow Agent to evidence the satisfaction of the
condition set forth in Paragraph 4 hereof and shall take such other action as
the Escrow Agent shall reasonably request. The Escrow Agent and the Company
shall prepare any documentation necessary to effectuate the terms of this
Agreement.
6. It is understood and agreed by the parties to this
Agreement as follows:
- 4 -
<PAGE>
(a) The Escrow Agent is not and shall not be deemed to be a
trustee for any party for any purpose and is merely acting as a depositary and
in a ministerial capacity hereunder with the limited duties herein prescribed.
(b) The Escrow Agent does not have and shall not be deemed to
have any responsibility in respect of any instruction, certificate or notice
delivered to it or of the Escrow Shares or any related Escrow Property other
than to (i) take all action necessary to effectuate the conversion of the Series
A Stock into Class A Common and (ii) faithfully carry out the obligations
undertaken in this Agreement and to follow the directions in such instruction or
notice provided in accordance with the terms hereof. The Escrow Agent shall take
any action necessary to convert shares of Class A Common Stock into shares of
SFX stock pursuant to that certain Amended and Restated Agreement and Plan of
Merger among SFX Broadcasting, Inc., SFX Merger Company and the Company. The
Escrow Agent shall not be entitled to sell and shall not sell the Escrow Shares
or the Escrow Property.
(c) The Escrow Agent is not and shall not be deemed to be
liable for any action taken or omitted by it in good faith and may rely upon,
and act in accordance with, the advice of its counsel without liability on its
part for any action taken or omitted in accordance with such advice. In any
event, its liability hereunder shall be limited to liability for gross
negligence or willful misconduct on its part.
- 5 -
<PAGE>
(d) The Escrow Agent may conclusively rely upon and act in
accordance with any certificate, instruction, notice, letter, telegram,
cablegram or other written instrument believed by it to be genuine and to have
been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent, as
consideration for services rendered hereunder, the sum of Five Hundred Dollars
($500.00) per annum during the term of this Agreement, (ii) to pay the Escrow
Agent's reasonable fees and to reimburse it for its reasonable expenses
including attorney's fees incurred in connection with duties hereunder and (iii)
to save harmless, indemnify and defend the Escrow Agent for, from and against
any loss, damage, liability, judgment, cost and expense whatsoever, including
counsel fees, suffered or incurred by it by reason of, or on account of, any
misrepresentation made to it or its status or activities as Escrow Agent under
this Agreement except for any loss, damage, liability, judgment, cost or expense
resulting from gross negligence or willful misconduct on the part of the Escrow
Agent. The obligation of the Escrow Agent to deliver the Escrow Shares to either
the Stockholders or the Company shall be subject to the prior satisfaction upon
demand from the Escrow Agent, of the Company's obligations to so save harmless,
indemnify and defend the Escrow Agent and to reimburse the Escrow Agent or
otherwise pay its fees and expenses hereunder.
(f) The Escrow Agent shall not be required to defend any
legal proceeding which may be instituted against it in respect of the subject
matter of this Agreement unless requested to do so by the Stockholders and, to
the Escrow Agent's satisfaction, indemnified against, and provided advances with
respect to, the cost and expense of such defense
- 6 -
<PAGE>
by the party requesting such defense. If any such legal proceeding is
instituted against it, the Escrow Agent agrees promptly to give notice of such
proceeding to the Stockholders and the Company. The Escrow Agent shall not be
required to institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay, omission or
otherwise, be deemed to have waived any right or remedy it may have either under
this Agreement or generally, unless such waiver be in writing, and no waiver
shall be valid unless it is in writing signed by the Escrow Agent, and only to
the extent expressly therein set forth. A waiver by the Escrow Agent under the
terms of this Agreement shall not be construed as a bar to, or waiver of, the
same or any other such right or remedy which it would otherwise have on any
other occasion.
(h) The Escrow Agent may resign as such hereunder by giving
30 days' written notice thereof to the Stockholders and the Company. Within 20
days after receipt of such notice, the Stockholders and the Company shall
furnish to the Escrow Agent written instructions for the release of the Escrow
Shares and any related Escrow Property (if such shares and property, if any,
have not yet been released pursuant to Paragraph 4 hereof) to a substitute
Escrow Agent which (whether designated by written instructions from the
Stockholders and the Company jointly or in the absence thereof by instructions
from a court of competent jurisdiction to the Escrow Agent) may be a bank or
trust company organized and doing business under the laws of the United States
or any state thereof; provided that, nothing contained in this Agreement shall
restrict the Escrow Agent's right to resign as provided in the first sentence of
this paragraph. Such substitute Escrow Agent shall thereafter hold any Escrow
Shares and any related Escrow Property received by it pursuant to the terms of
this Agreement and otherwise act
- 7 -
<PAGE>
hereunder as if it were the Escrow Agent originally named herein. The Escrow
Agent's duties and responsibilities hereunder shall terminate upon the release
of all shares then held in escrow according to such written instruction or
upon such delivery as herein provided. This Agreement shall not otherwise be
assignable by the Escrow Agent without the prior written consent of the
Company.
7. During the Escrow Period, the Stockholders shall have the
sole power to vote the Class A Common Stock issued or issuable upon the
conversion of the Series A Stock and any securities deposited in escrow under
this Agreement (including, without limitation, any shares issued in connection
with the Company's proposed merger with SFX Broadcasting, Inc. or any other
Escrow Property) while such shares are being held pursuant to this Agreement.
Upon receipt of instructions from any Stockholder, the Escrow Agent shall take
any and all necessary action to cause the Escrow Shares to be voted in
accordance with such instructions.
8. (a) During the term of this Agreement no Stockholder
shall sell, transfer, hypothecate, negotiate, pledge, assign, encumber or
otherwise dispose of any or all of the shares of Class A Common Stock held in
escrow pursuant to this Agreement. This restriction shall not be applicable to
transfers upon death, upon which all remaining shares shall be released from
escrow, or upon transfers to members of the Stockholders' family or to any trust
for the benefit of the Stockholders, provided that such transferees agree to be
bound by the provisions of this Agreement, and subject to the Stockholder set
forth on Exhibit A providing the services necessary to vest such shares in
accordance with Paragraph 4 hereof.
- 8 -
<PAGE>
(b) The Stockholders will take any action necessary or
appropriate, including the execution of any further documents or agreements, in
order to effectuate the terms of this Agreement.
9. (a) Each of the certificates representing the Series A
Stock will bear legends to the following effect, as well as any other legends
required by applicable law:
"The sale, transfer, hypothecation, negotiation,
pledge, assignment, encumbrance or other
disposition of the shares evidenced by this
certificate are restricted by and are subject to
all of the terms, conditions and provisions of a
certain Escrow Agreement entered into among Multi-
Market Radio, Inc., Kraig G. Fox, as Escrow Agent
and the Stockholders, dated as of July 31, 1996, a
copy of which may be obtained from the Secretary
of Multi-Market Radio, Inc. No transfer, sale or
other disposition of these shares may be made
unless specific conditions of such agreement are
satisfied."
(b) "The shares evidenced by this certificate
have not been registered under the
Securities Act of 1933, as amended. No
transfer, sale or other disposition of
these shares may be made unless a
registration statement with respect to
these shares has become effective under
said act, or the Company is furnished with
an opinion of counsel satisfactory in form
and substance to it that such registration
is not required."
The Company and the Escrow Agent shall direct the transfer
agent for the Company to place stop transfer orders with respect to the Escrow
Shares and to maintain such orders in effect until the transfer agent shall
have received written notice from the Company as contemplated in Paragraph 4
hereof.
- 9 -
<PAGE>
10. Each notice, instruction or other certificate required
or permitted by the terms hereof shall be in writing and shall be communicated
by personal delivery, facsimile or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
(i) If to the Company, to:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, MA 01144
Attn: Michael G. Ferrel
Fax: 412-732-7851
(ii) If to the Stockholders, to their respective
addresses as set forth on Exhibit A hereto.
(iii) If to the Escrow Agent, to:
Kraig G. Fox, Escrow Agent
150 East 58th Street, 19th Floor
New York, NY 10155
Fax: 212-743-3188
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given
hereunder by the Escrow Agent shall be effective and deemed received upon
personal delivery or transmission by facsimile or, if mailed, five (5)
calendar days after mailing by the Escrow Agent.
A copy of all communications sent to the Company, the
Stockholders or the Escrow Agent shall be sent by ordinary mail to Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, Attention: Howard
Berkower, Esq.
- 10 -
<PAGE>
11. This Agreement may not be modified, altered or amended
in any material respect or canceled or terminated except with the prior consent
of the parties hereto.
12. This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to the
benefits of all parties hereto and their respective successors in interest and
assigns.
13. This Agreement may be executed in several counterparts,
which taken together shall constitute a single instrument.
- 11 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the day and year
first above written.
MULTI-MARKET RADIO, INC.
By:________________________________
ESCROW AGENT
------------------------------------
Kraig G. Fox
STOCKHOLDERS:
------------------------------------
Bruce Morrow
------------------------------------
Myles Schumer
-----------------------------------
Edward Simon
- 12 -
<PAGE>
EXHIBIT A
STOCKHOLDERS' LIST
NAME AND ADDRESS
OF STOCKHOLDER NUMBER OF ESCROW SHARES
---------------- -----------------------
Bruce Morrow 10,000
200 Mercer Street
Apt. 1A
New York, New York 10012
Myles Schumer 5,000
Cornick, Garber & Sandler
630 Third Avenue
New York, New York 10017
Fax: (212) 557-3936
Edward Simon 5,000
55 Central Park West, #11E
New York, New York 10023
Fax: (212) 877-0987
- 13 -
ESCROW AGREEMENT
AGREEMENT, dated as of the 31st day of July, 1996, by and
among Kraig G. Fox (hereinafter referred to as the "Escrow Agent"),
Multi-Market Radio, Inc., a Delaware corporation (the "Company"), and the
individuals and entities listed on Exhibit A who have executed this agreement
(hereinafter collectively called the "Stockholders").
WHEREAS, the Stockholders own of record the Company's
Preferred Stock, par value $.01 per share (the "Original Preferred Stock") in
the amounts set forth on Exhibit A hereto; and
WHEREAS, each share of Original Preferred Stock is
convertible into a share of Class B Common Stock, par value $.01 per share
(the "Class B Common Stock") or a share of Class A Common Stock, par value
(the "Class A Common Stock") under certain circumstances; and
WHEREAS, the Stockholders and the Company have agreed to
deposit in escrow the shares of Original Preferred Stock and shares of Class B
Common Stock issued upon the conversion of such Original Preferred Stock, if
any, as well as and any other securities or property that such securities are
or otherwise become convertible into or otherwise receive or are entitled to
receive (the "Escrow Shares").
<PAGE>
In consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. The Stockholders and the Company hereby appoint Kraig G.
Fox, as Escrow Agent, and Kraig G. Fox, by his execution of this Agreement
hereby acknowledges and accepts his appointment as Escrow Agent to hold the
Escrow Shares in escrow, upon the terms, provisions and conditions hereof.
This Agreement shall become effective on the date hereof (the "Effective
Date") and shall continue in effect until the close of business on July 29,
1998 (the "Termination Date"). The period of time form the Effective Date
until the Termination Date is referred to herein as the "Escrow Period."
2. The Company shall cause stock certificates representing
the Original Preferred Stock for each of the Stockholders in the amount set
forth on Exhibit A hereto to be issued registered in the name of Kraig G. Fox,
as Escrow Agent, and shall cause such certificates to be delivered to the
Escrow Agent within five (5) business days of the Effective Date. Said
certificates shall contain the legend set forth in Paragraph 9(a) hereof.
Within one (1) business day of receipt of joint instructions from the Company
and a Stockholder to convert shares of Original Preferred Stock into shares of
Class B Common Stock in the form of Exhibit B hereto, the Escrow Agent shall
deliver such stock certificates to the Company or the Company's transfer agent
with irrevocable instructions to issue and deliver to the Escrow Agent stock
certificates representing shares of Class B Common Stock for such Stockholder
registered in the name of the Escrow Agent, in exchange for the Original
Preferred Stock. Said certificates shall have the legend set forth in
Paragraph 9(a) hereof.
- 2 -
<PAGE>
3. During the Escrow Period, any and all of the money,
securities, rights or property distributed in respect of the Escrow Shares
then held in escrow, including any such property distributed as dividends or
pursuant to any stock split, merger, recapitalization, dissolution, or total
or partial liquidation of the Company shall be delivered to the Escrow Agent,
such property to be held and distributed as herein provided and is hereinafter
referred to collectively as the "Escrow Property."
4. Except as otherwise provided in Paragraph 8 hereof, the
Escrow Shares shall not be sold, transferred, hypothecated, negotiated,
pledged, assigned, encumbered or otherwise disposed of (a "Transfer") during
the Escrow Period. Provided that each such Stockholder provides substantial
services (as defined in Treasury Regulation 1-83-8(c)) for the Company during
the Escrow Period the Escrow Shares and Escrow Property shall be released from
escrow. If the Company certifies to the Escrow Agent that such services have
been rendered, the Escrow Agent shall take such necessary action, within
thirty (30) days of receipt of said certificate, to cause the Company's
transfer agent to (i) reissue a stock certificate in the name of the
Stockholder for the total shares set forth on Exhibit A or such other Escrow
Property ("Vested Amount") which stock certificate shall not contain the
legend set forth in Paragraph 9(a) hereof. If the Company fails to deliver
said certificate, the Escrow Agent shall take such action to cause the
Company's transfer agent to cancel the Escrow Shares and remit to the Company
any other Escrow Property. After any such cancellation of stock, the
Stockholders shall have no further rights as a stockholder of the Company with
respect to any of the canceled Escrow Shares. Upon receipt of any unledgended
stock certificates for shares of Company Stock
- 3 -
<PAGE>
in the name of a Stockholder, the Escrow Agent shall cause such certificate to
be delivered to such Stockholder.
5. (a) The Company shall present such documentation as is
reasonably required by the Escrow Agent to evidence the satisfaction of the
condition set forth in Paragraph 4 hereof and shall take such other action as
the Escrow Agent shall reasonably request. The Escrow Agent and the Company
shall prepare any documentation necessary to effectuate the terms of this
Agreement.
(b) The Escrow Agent hereby agrees to be bound by the terms
and conditions of that certain Stockholders Agreement dated as of March 27, 1995
among the Company, The Huff Alternative Income Fund, L.P. and Robert F.X.
Sillerman, Michael G. Ferrel and Bruce Morrow (the "Stockholders Agreement")
to the extent applicable and shall if requested issue proxies in the form of
proxy contained therein, with respect to the Escrow Shares held on behalf of
such Stockholders.
6. It is understood and agreed by the parties to this
Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed to be
a trustee for any party for any purpose and is merely acting as a depositary
and in a ministerial capacity hereunder with the limited duties herein
prescribed.
- 4 -
<PAGE>
(b) The Escrow Agent does not have and shall not be
deemed to have any responsibility in respect of any instruction, certificate
or notice delivered to it or of the Escrow Shares or any related Escrow
Property other than to (i) take all action necessary to effectuate the
conversion of the Original Preferred Stock into Class B Common Stock and (ii)
faithfully carry out the obligations undertaken in this Agreement and to
follow the directions in such instruction or notice provided in accordance
with the terms hereof. The Escrow Agent shall take any action necessary to
convert shares of Company Stock into shares of SFX stock pursuant to that
certain Amended and Restated Agreement and Plan of Merger among SFX
Broadcasting, Inc., SFX Merger Company and the Company. The Escrow Agent shall
not be entitled to sell and shall not sell the Escrow Shares or the Escrow
Property.
(c) The Escrow Agent is not and shall not be deemed to be
liable for any action taken or omitted by it in good faith and may rely upon,
and act in accordance with, the advice of its counsel without liability on its
part for any action taken or omitted in accordance with such advice. In any
event, its liability hereunder shall be limited to liability for gross
negligence or willful misconduct on its part.
(d) The Escrow Agent may conclusively rely upon and act
in accordance with any certificate, instruction, notice, letter, telegram,
cablegram or other written instrument believed by it to be genuine and to have
been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent, as
consideration for services rendered hereunder, the sum of Five Hundred Dollars
($500.00) per annum during
- 5 -
<PAGE>
the term of this Agreement, (ii) to pay the Escrow Agent's reasonable fees and
to reimburse it for its reasonable expenses including attorney's fees incurred
in connection with duties hereunder and (iii) to save harmless, indemnify and
defend the Escrow Agent for, from and against any loss, damage, liability,
judgment, cost and expense whatsoever, including counsel fees, suffered or
incurred by it by reason of, or on account of, any misrepresentation made to
it or its status or activities as Escrow Agent under this Agreement except for
any loss, damage, liability, judgment, cost or expense resulting from gross
negligence or willful misconduct on the part of the Escrow Agent. The
obligation of the Escrow Agent to deliver the Escrow Shares to either the
Stockholders or the Company shall be subject to the prior satisfaction upon
demand from the Escrow Agent, of the Company's obligations to so save
harmless, indemnify and defend the Escrow Agent and to reimburse the Escrow
Agent or otherwise pay its fees and expenses hereunder.
(f) The Escrow Agent shall not be required to defend any
legal proceeding which may be instituted against it in respect of the subject
matter of this Agreement unless requested to do so by the Stockholder and, to
the Escrow Agent's satisfaction, indemnified against, and provided advances
with respect to, the cost and expense of such defense by the party requesting
such defense. If any such legal proceeding is instituted against it, the
Escrow Agent agrees promptly to give notice of such proceeding to the
Stockholders and the Company. The Escrow Agent shall not be required to
institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay, omission
or otherwise, be deemed to have waived any right or remedy it may have either
under this Agreement or
- 6 -
<PAGE>
generally, unless such waiver be in writing, and no waiver shall be valid
unless it is in writing signed by the Escrow Agent, and only to the extent
expressly therein set forth. A waiver by the Escrow Agent under the terms of
this Agreement shall not be construed as a bar to, or waiver of, the same or
any other such right or remedy which it would otherwise have on any other
occasion.
(h) The Escrow Agent may resign as such hereunder by
giving 30 days' written notice thereof to the Stockholders and the Company.
Within 20 days after receipt of such notice, the Stockholders and the Company
shall furnish to the Escrow Agent written instructions for the release of the
Escrow Shares and any related Escrow Property (if such shares and property, if
any, have not yet been released pursuant to Paragraph 4 hereof) to a
substitute Escrow Agent which (whether designated by written instructions from
the Stockholders and the Company jointly or in the absence thereof by
instructions from a court of competent jurisdiction to the Escrow Agent) may
be a bank or trust company organized and doing business under the laws of the
United States or any state thereof; provided that, nothing contained in this
Agreement shall restrict the Escrow Agent's right to resign as provided in the
first sentence of this paragraph. Such substitute Escrow Agent shall
thereafter hold any Escrow Shares and any related Escrow Property received by
it pursuant to the terms of this Agreement and otherwise act hereunder as if
it were the Escrow Agent originally named herein. The Escrow Agent's duties
and responsibilities hereunder shall terminate upon the release of all shares
then held in escrow according to such written instruction or upon such
delivery as herein provided. This Agreement shall not otherwise be assignable
by the Escrow Agent without the prior written consent of the Company.
- 7 -
<PAGE>
7. During the Escrow Period, each Stockholder shall have the
sole power to vote his Escrow Shares and any securities deposited in escrow
under this Agreement (including, without limitation, any shares issued in
connection with the Company's proposed merger with SFX Broadcasting, Inc. or
any other Escrow Property) while such shares are being held pursuant to this
Agreement. Upon receipt of instructions from any Stockholder, the Escrow Agent
shall take any and all necessary action to cause the Escrow Shares to be voted
in accordance with such instructions.
8. (a) During the term of this Agreement no Stockholder
shall sell, transfer, hypothecate, negotiate, pledge, assign, encumber or
otherwise dispose of any or all of the Escrow Shares held in escrow pursuant
to this Agreement. This restriction shall not be applicable to transfers upon
death, upon which all remaining shares shall be released from escrow, or upon
transfers to members of the Stockholders' family or to any trust for the
benefit of the Stockholders, provided that such transferees agree to be bound
by the provisions of this Agreement, and subject to the Stockholder set forth
on Exhibit A providing the services necessary to vest such shares in
accordance with Paragraph 4 hereof.
(b) The Stockholders will take any action necessary or
appropriate, including the execution of any further documents or agreements,
in order to effectuate the terms of this Agreement.
9. (a) Each of the certificates representing the Series A
Stock will bear legends to the following effect, as well as any other legends
required by applicable law:
- 8 -
<PAGE>
"The sale, transfer, hypothecation,
negotiation, pledge, assignment,
encumbrance or other disposition of the
shares evidenced by this certificate are
restricted by and are subject to all of
the terms, conditions and provisions of a
certain Escrow Agreement entered into
among Multi- Market Radio, Inc., Kraig G.
Fox, as Escrow Agent and the Stockholders,
dated as of July 31, 1996, a copy of which
may be obtained from the Secretary of
Multi-Market Radio, Inc. No transfer, sale
or other disposition of these shares may
be made unless specific conditions of such
agreement are satisfied."
(b) "The shares evidenced by this certificate
have not been registered under the
Securities Act of 1933, as amended. No
transfer, sale or other disposition of
these shares may be made unless a
registration statement with respect to
these shares has become effective under
said act, or the Company is furnished with
an opinion of counsel satisfactory in form
and substance to it that such registration
is not required."
The Company and the Escrow Agent shall direct the transfer
agent for the Company to place stop transfer orders with respect to the Escrow
Shares and to maintain such orders in effect until the transfer agent shall
have received written notice from the Company as contemplated in Paragraph 4
hereof.
10. Each notice, instruction or other certificate required
or permitted by the terms hereof shall be in writing and shall be communicated
by personal delivery, facsimile or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
- 9 -
<PAGE>
(i) If to the Company, to:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, MA 01144
Attn: Chief Executive Officer
Fax: 412-732-7851
(ii) If to the Stockholders, to their respective
addresses as set forth on Exhibit A hereto.
(iii) If to the Escrow Agent, to:
Kraig G. Fox, Escrow Agent
150 East 58th Street, 19th Floor
New York, NY 10155
Fax: 212-743-3188
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given
hereunder by the Escrow Agent shall be effective and deemed received upon
personal delivery or transmission by facsimile or, if mailed, five (5)
calendar days after mailing by the Escrow Agent.
A copy of all communications sent to the Company, the
Stockholders or the Escrow Agent shall be sent by ordinary mail to Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, Attention: Howard
Berkower, Esq.
11. This Agreement may not be modified, altered or
amended in any material respect or canceled or terminated except with the prior
consent of the parties hereto.
- 10 -
<PAGE>
12. This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to
the benefits of all parties hereto and their respective successors in interest
and assigns.
13. This Agreement may be executed in several
counterparts, which taken together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the day and year
first above written.
MULTI-MARKET RADIO, INC.
By:________________________________
ESCROW AGENT
-----------------------------------
Kraig G. Fox
STOCKHOLDERS:
------------------------------------
Robert F.X. Sillerman
-------------------------------------
Michael G. Ferrel
- 11 -
<PAGE>
EXHIBIT A
STOCKHOLDERS' LIST
NAME AND ADDRESS
OF STOCKHOLDER NUMBER OF ESCROW SHARES
-------------- -----------------------
Robert F.X. Sillerman 133,334
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
Michael Ferrel 66,666
One Monarch Place, Suite 220
Springfield, Massachusetts 01144
Fax: (413) 732-7851
- 12 -
ESCROW AGREEMENT
AGREEMENT, dated as of the 31st day of July, 1996, by and
among Kraig G. Fox (hereinafter referred to as the "Escrow Agent"),
Multi-Market Radio, Inc., a Delaware corporation (the "Company"), and the
individuals and entities listed on Exhibit A who have executed this agreement
(hereinafter collectively called the "Stockholders").
WHEREAS, the Board of Directors of the Company has approved
the issuance of shares of Series B Convertible Preferred Stock, par value $.01
per share (the "Series B Stock") to the Stockholders pursuant to a
compensation plan approved by the stockholders of the Company at the 1995
Annual Stockholders Meeting;
WHEREAS, pursuant to the terms of the Certificate of
Designations in respect of the Series B Stock, each share of Series B Stock is
convertible into one share of the Company's Class A Common Stock, par value
$.01 per share ("Class A Common Stock") in the event that the Company
generates broadcast cash flow (as defined in the certificate of designations)
of at least $10 million for the fiscal year ending December 31, 1997 and the
closing sales price of Class A Common Stock for the thirty (30) trading days
immediately preceding the conversion exceeds $7.50 per share (the "Conversion
Conditions");
WHEREAS, the Stockholders and the Company have agreed to
deposit in escrow the shares of Series B Stock and shares of Class A Common
Stock issuable upon the conversion
<PAGE>
of such Series B Stock and any other securities or property that such
securities are or otherwise become convertible into or otherwise receive or
are entitled to receive (the "Escrow Shares").
In consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. The Stockholders and the Company hereby appoint Kraig G.
Fox, as Escrow Agent, and Kraig G. Fox, by his execution of this Agreement
hereby acknowledges and accepts his appointment as Escrow Agent to hold the
Escrow Shares in escrow, upon the terms, provisions and conditions hereof.
This Agreement shall become effective on the date hereof (the "Effective
Date") and shall continue in effect until the distribution by the Escrow Agent
of all of the Escrow Shares in accordance with the terms hereof (the
"Termination Date"). The period of time form the Effective Date until the
Termination Date is referred to herein as the "Escrow Period."
2. The Company shall cause stock certificates representing
the Series B Stock for each of the Stockholders in the amount set forth on
Exhibit A hereto to be issued registered in the name of Kraig G. Fox, as
Escrow Agent, and shall cause such certificates to be delivered to the Escrow
Agent within five (5) business days of the Effective Date. Said certificates
shall contain the legend set forth in Paragraph 9(a) hereof. Within five (5)
business days of receipt of notice from the Company that the Conversion
Conditions have been satisfied, the Escrow Agent shall deliver the stock
certificates representing the Series B Stock to the Company's transfer agent
with irrevocable instructions to issue and deliver to the Escrow Agent
- 2 -
<PAGE>
stock certificates representing shares of Class A Common Stock for each of the
Stockholders registered in the name of the Escrow Agent, in exchange for the
Series B Stock. Said certificates shall have the legend set forth in Paragraph
9(a) hereof.
3. During the Escrow Period, any and all of the money,
securities, rights or property distributed in respect of the Escrow Shares
then held in escrow, including any such property distributed as dividends or
pursuant to any stock split, merger, recapitalization, dissolution, or total
or partial liquidation of the Company shall be delivered to the Escrow Agent,
such property to be held and distributed as herein provided and is hereinafter
referred to collectively as the "Escrow Property."
4. The Escrow Shares of each Stockholder shall vest in five
equal annual installments beginning on April 30, 1997 (the "Initial
Disbursement Date") provided that each such Stockholder is available to
provide substantial services for and serve as a director of the Company during
each fiscal year ended December 31 immediately preceding such April 30. After
each fiscal year, the Company shall deliver to the Escrow Agent a certificate
stating whether such Stockholder was available to perform substantial services
for (as defined in Treasury Regulation 1-83-3(c)) and to serve as a director
of the Company during the most recent fiscal year-end. If the Company
certifies to the Escrow Agent, the Escrow Agent shall take such necessary
action, within thirty (30) days of receipt of said certificate, to cause the
Company's transfer agent to (i) reissue a stock certificate in the name of the
Stockholder for 20% of the total shares set forth on Exhibit A or such other
Escrow Property ("Vested Amount") which stock certificate shall not contain
the legend set forth in Paragraph 9(a) hereof and, (ii) issue and
- 3 -
<PAGE>
deliver to the Escrow Agent a stock certificate in the name of the Escrow
Agent for the remaining shares of Class A Common Stock which certificate shall
contain the legend set forth in Paragraph 9(a) hereof. If the Company fails to
deliver said certificate, the Escrow Agent shall take such action to cause the
Company's transfer agent to cancel shares of Class A Common Stock equal to the
Vested Amount and reissue a certificate in the name of the Escrow Agent for
the remaining shares of Class A Common Stock which certificate shall contain
the legend set forth in Paragraph 9(a) hereof. After any such cancellation of
stock, the Stockholders shall have no further rights as a stockholder of the
Company with respect to any of the canceled Escrow Shares. Upon receipt of any
unlegended stock certificates for shares of Class A Common Stock in the name
of a Stockholder, the Escrow Agent shall cause such certificate to be
delivered to such Stockholder.
5. The Company shall (i) promptly provide the Escrow Agent
with notice of the satisfaction of the Conversion Conditions, (ii) present
such documentation as is reasonably required by the Escrow Agent to evidence
the satisfaction of the condition set forth in Paragraph 4 hereof and (iii)
take such other action as the Escrow Agent shall reasonably request. The
Escrow Agent and the Company shall prepare any documentation necessary to
effectuate the terms of this Agreement.
6. It is understood and agreed by the parties to this
Agreement as follows:
- 4 -
<PAGE>
(a) The Escrow Agent is not and shall not be deemed
to be a trustee for any party for any purpose and is merely acting as a
depositary and in a ministerial capacity hereunder with the limited duties
herein prescribed.
(b) The Escrow Agent does not have and shall not be
deemed to have any responsibility in respect of any instruction, certificate
or notice delivered to it or of the Escrow Shares or any related Escrow
Property other than to (i) take all action necessary to effectuate the
conversion of the Series B Stock into Class A Common upon the satisfaction of
the Conversion Conditions and (ii) faithfully carry out the obligations
undertaken in this Agreement and to follow the directions in such instruction
or notice provided in accordance with the terms hereof. The Escrow Agent shall
take any action necessary to convert shares of Class A Common Stock into
shares of SFX stock pursuant to that certain Amended and Restated Agreement
and Plan of Merger among SFX Broadcasting, Inc., SFX Merger Company and the
Company. The Escrow Agent shall not be entitled to sell and shall not sell the
Escrow Shares or the Escrow Property.
(c) The Escrow Agent is not and shall not be deemed
to be liable for any action taken or omitted by it in good faith and may rely
upon, and act in accordance with, the advice of its counsel without liability
on its part for any action taken or omitted in accordance with such advice. In
any event, its liability hereunder shall be limited to liability for gross
negligence or willful misconduct on its part.
- 5 -
<PAGE>
(d) The Escrow Agent may conclusively rely upon and
act in accordance with any certificate, instruction, notice, letter, telegram,
cablegram or other written instrument believed by it to be genuine and to have
been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent,
as consideration for services rendered hereunder, the sum of Five Hundred
Dollars ($500.00) per annum during the term of this Agreement, (ii) to pay the
Escrow Agent's reasonable fees and to reimburse it for its reasonable expenses
including attorney's fees incurred in connection with duties hereunder and
(iii) to save harmless, indemnify and defend the Escrow Agent for, from and
against any loss, damage, liability, judgment, cost and expense whatsoever,
including counsel fees, suffered or incurred by it by reason of, or on account
of, any misrepresentation made to it or its status or activities as Escrow
Agent under this Agreement except for any loss, damage, liability, judgment,
cost or expense resulting from gross negligence or willful misconduct on the
part of the Escrow Agent. The obligation of the Escrow Agent to deliver the
Escrow Shares to either the Stockholders or the Company shall be subject to
the prior satisfaction upon demand from the Escrow Agent, of the Company's
obligations to so save harmless, indemnify and defend the Escrow Agent and to
reimburse the Escrow Agent or otherwise pay its fees and expenses hereunder.
(f) The Escrow Agent shall not be required to
defend any legal proceeding which may be instituted against it in respect of
the subject matter of this Agreement unless requested to do so by the
Stockholders and, to the Escrow Agent's satisfaction, indemnified against, and
provided advances with respect to, the cost and expense of such defense
- 6 -
<PAGE>
by the party requesting such defense. If any such legal proceeding is
instituted against it, the Escrow Agent agrees promptly to give notice of such
proceeding to the Stockholders and the Company. The Escrow Agent shall not be
required to institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay,
omission or otherwise, be deemed to have waived any right or remedy it may
have either under this Agreement or generally, unless such waiver be in
writing, and no waiver shall be valid unless it is in writing signed by the
Escrow Agent, and only to the extent expressly therein set forth. A waiver by
the Escrow Agent under the terms of this Agreement shall not be construed as a
bar to, or waiver of, the same or any other such right or remedy which it
would otherwise have on any other occasion.
(h) The Escrow Agent may resign as such hereunder
by giving 30 days' written notice thereof to the Stockholders and the Company.
Within 20 days after receipt of such notice, the Stockholders and the Company
shall furnish to the Escrow Agent written instructions for the release of the
Escrow Shares and any related Escrow Property (if such shares and property, if
any, have not yet been released pursuant to Paragraph 4 hereof) to a
substitute Escrow Agent which (whether designated by written instructions from
the Stockholders and the Company jointly or in the absence thereof by
instructions from a court of competent jurisdiction to the Escrow Agent) may
be a bank or trust company organized and doing business under the laws of the
United States or any state thereof; provided that, nothing contained in this
Agreement shall restrict the Escrow Agent's right to resign as provided in the
first sentence of this paragraph. Such substitute Escrow Agent shall
thereafter hold any Escrow Shares and any related Escrow Property received by
it pursuant to the terms of this Agreement and otherwise act
- 7 -
<PAGE>
hereunder as if it were the Escrow Agent originally named herein. The Escrow
Agent's duties and responsibilities hereunder shall terminate upon the release
of all shares then held in escrow according to such written instruction or
upon such delivery as herein provided. This Agreement shall not otherwise be
assignable by the Escrow Agent without the prior written consent of the
Company.
7. During the Escrow Period, the Stockholders shall have the
sole power to vote the Class A Common Stock issued or issuable upon the
conversion of the Series B Stock and any securities deposited in escrow under
this Agreement (including, without limitation, any shares issued in connection
with the Company's proposed merger with SFX Broadcasting, Inc. or any other
Escrow Property) while such shares are being held pursuant to this Agreement.
Upon receipt of instructions from any Stockholder, the Escrow Agent shall take
any and all necessary action to cause the Escrow Shares to be voted in
accordance with such instructions.
8. (a) During the term of this Agreement no Stockholder
shall sell, transfer, hypothecate, negotiate, pledge, assign, encumber or
otherwise dispose of any or all of the shares of Class A Common Stock held in
escrow pursuant to this Agreement. This restriction shall not be applicable to
transfers upon death, upon which all remaining shares shall be released from
escrow, or upon transfers to members of the Stockholders' family or to any
trust for the benefit of the Stockholders, provided that such transferees
agree to be bound by the provisions of this Agreement, and subject to the
Stockholder set forth on Exhibit A providing the services necessary to vest
such shares in accordance with Paragraph 4 hereof.
- 8 -
<PAGE>
(b) The Stockholders will take any action necessary
or appropriate, including the execution of any further documents or
agreements, in order to effectuate the terms of this Agreement.
9. (a) Each of the certificates representing the
Series B Stock will bear legends to the following effect, as well as any other
legends required by applicable law:
"The sale, transfer, hypothecation,
negotiation, pledge, assignment,
encumbrance or other disposition of the
shares evidenced by this certificate are
restricted by and are subject to all of
the terms, conditions and provisions of a
certain Escrow Agreement entered into
among Multi-Market Radio, Inc., Kraig G.
Fox, as Escrow Agent and the Stockholders,
dated as of July 31, 1996, a copy of which
may be obtained from the Secretary of
Multi-Market Radio, Inc. No transfer, sale
or other disposition of these shares may
be made unless specific conditions of such
agreement are satisfied."
(b) "The shares evidenced by this certificate
have not been registered under the
Securities Act of 1933, as amended. No
transfer, sale or other disposition of
these shares may be made unless a
registration statement with respect to
these shares has become effective under
said act, or the Company is furnished with
an opinion of counsel satisfactory in form
and substance to it that such registration
is not required."
The Company and the Escrow Agent shall direct the transfer
agent for the Company to place stop transfer orders with respect to the Escrow
Shares and to maintain such orders in effect until the transfer agent shall
have received written notice from the Company as contemplated in Paragraph 4
hereof.
- 9 -
<PAGE>
10. Each notice, instruction or other certificate required
or permitted by the terms hereof shall be in writing and shall be communicated
by personal delivery, facsimile or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
(i) If to the Company, to:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, MA 01144
Attn: Michael G. Ferrel
Fax: 412-732-7851
(ii) If to the Stockholders, to their respective
addresses as set forth on Exhibit A hereto.
(iii) If to the Escrow Agent, to:
Kraig G. Fox, Escrow Agent
150 East 58th Street, 19th Floor
New York, NY 10155
Fax: 212-743-3188
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given
hereunder by the Escrow Agent shall be effective and deemed received upon
personal delivery or transmission by facsimile or, if mailed, five (5)
calendar days after mailing by the Escrow Agent.
A copy of all communications sent to the Company, the
Stockholders or the Escrow Agent shall be sent by ordinary mail to Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, Attention: Howard
Berkower, Esq.
- 10 -
<PAGE>
11. This Agreement may not be modified, altered or
amended in any material respect or canceled or terminated except with the prior
consent of the parties hereto.
12. This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to
the benefits of all parties hereto and their respective successors in interest
and assigns.
13. This Agreement may be executed in several
counterparts, which taken together shall constitute a single instrument.
- 11 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the day and year
first above written.
MULTI-MARKET RADIO, INC.
By:________________________________
ESCROW AGENT
----------------------------------
Kraig G. Fox
STOCKHOLDERS:
------------------------------------
Bruce Morrow
------------------------------------
Myles Schumer
-----------------------------------
Edward Simon
- 12 -
<PAGE>
EXHIBIT A
STOCKHOLDERS' LIST
NAME AND ADDRESS
OF STOCKHOLDER NUMBER OF ESCROW SHARES
-------------- -----------------------
Bruce Morrow 10,000
200 Mercer Street
Apt. 1A
New York, New York 10012
Myles Schumer 5,000
Cornick, Garber & Sandler
630 Third Avenue
New York, New York 10017
Fax: (212) 557-3936
Edward Simon 5,000
55 Central Park West, #11E
New York, New York 10023
Fax: (212) 877-0987
- 13 -
<PAGE>
ESCROW AGREEMENT
AGREEMENT, dated as of the 31st day of July, 1996, by and
among Kraig G. Fox (hereinafter referred to as the "Escrow Agent"),
Multi-Market Radio, Inc., a Delaware corporation (the "Company"), and the
individuals and entities listed on Exhibit A who have executed this agreement
(hereinafter collectively called the "Stockholders").
WHEREAS, the Board of Directors of the Company has approved
the issuance of shares of Series A Convertible Preferred Stock, par value $.01
per share (the "Series A Stock") to the Stockholders pursuant to a
compensation plan approved by the stockholders of the Company at the 1995
Annual Stockholders Meeting;
WHEREAS, pursuant to the terms of the Certificate of
Designations in respect of the Series A Stock, each share of Series A Stock is
convertible into one share of the Company's Class A Common Stock, par value
$.01 per share ("Class A Common Stock") in the event that the Company
generates broadcast cash flow (as defined in the certificate of designations)
of at least $5 million for the fiscal year ending December 31, 1995 and the
closing sales price of Class A Common Stock for the thirty (30) trading days
immediately preceding the conversion exceeds $7.50 per share;
WHEREAS, the Board of Directors of the Company has
determined that the conditions to the conversion of Series A Stock into Class
A Common Stock have been satisfied; and
<PAGE>
WHEREAS, the Stockholders and the Company have agreed to
deposit in escrow the shares of Series A Stock and shares of Class A Common
Stock issuable upon the conversion of such Series A Stock and any other
securities or property that such securities are or otherwise become
convertible into or otherwise receive or are entitled to receive (the "Escrow
Shares").
In consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. The Stockholders and the Company hereby appoint Kraig G.
Fox, as Escrow Agent, and Kraig G. Fox, by his execution of this Agreement
hereby acknowledges and accepts his appointment as Escrow Agent to hold the
Escrow Shares in escrow, upon the terms, provisions and conditions hereof.
This Agreement shall become effective on the date hereof (the "Effective
Date") and shall continue in effect until the distribution by the Escrow Agent
of all of the Escrow Shares in accordance with the terms hereof (the
"Termination Date"). The period of time form the Effective Date until the
Termination Date is referred to herein as the "Escrow Period."
2. The Company shall cause stock certificates representing
the Series A Stock for each of the Stockholders in the amount set forth on
Exhibit A hereto to be issued registered in the name of Kraig G. Fox, as
Escrow Agent, and shall cause such certificates to be delivered to the Escrow
Agent within five (5) business days of the Effective Date. Said certificates
shall contain the legend set forth in Paragraph 9(a) hereof. Within five (5)
business days of receipt of the stock certificates representing the Series A
Stock, the Escrow Agent shall
- 2 -
<PAGE>
deliver such stock certificates to the Company's transfer agent with
irrevocable instructions to issue and deliver to the Escrow Agent stock
certificates representing shares of Class A Common Stock for each of the
Stockholders registered in the name of the Escrow Agent, in exchange for the
Series A Stock. Said certificates shall have the legend set forth in Paragraph
9(a) hereof.
3. During the Escrow Period, any and all of the money,
securities, rights or property distributed in respect of the Escrow Shares
then held in escrow, including any such property distributed as dividends or
pursuant to any stock split, merger, recapitalization, dissolution, or total
or partial liquidation of the Company shall be delivered to the Escrow Agent,
such property to be held and distributed as herein provided and is hereinafter
referred to collectively as the "Escrow Property."
4. The Escrow Shares of each Stockholder shall vest in five
equal annual installments beginning on April 30, 1997 (the "Initial
Disbursement Date") provided that each such Stockholder provides substantial
services for the Company during each fiscal year ended December 31 immediately
preceding such April 30. After each fiscal year the Company shall deliver to
the Escrow Agent a certificate stating whether such Stockholder has performed
substantial services (as defined in Treasury Regulation 1-83-3(c)) during the
most recent fiscal year-end. If the Company certifies to the Escrow Agent that
such services have been rendered, the Escrow Agent shall take such necessary
action, within thirty (30) days of receipt of said certificate, to cause the
Company's transfer agent to (i) reissue a stock certificate in the name of the
Stockholder for 20% of the total shares set forth on Exhibit A or such other
Escrow Property ("Vested Amount") which stock certificate shall not contain
the legend set forth in Paragraph
- 3 -
<PAGE>
9(a) hereof and, (ii) issue and deliver to the Escrow Agent a stock
certificate in the name of the Escrow Agent for the remaining shares of Class
A Common Stock which certificate shall contain the legend set forth in
Paragraph 9(a) hereof. If the Company fails to deliver said certificate, the
Escrow Agent shall take such action to cause the Company's transfer agent to
cancel shares of Class A Common Stock equal to the Vested Amount and reissue a
certificate in the name of the Escrow Agent for the remaining shares of Class
A Common Stock which certificate shall contain the legend set forth in
Paragraph 9(a) hereof. After any such cancellation of stock, the Stockholders
shall have no further rights as a stockholder of the Company with respect to
any of the canceled Escrow Shares. Upon receipt of any unlegended stock
certificates for shares of Class A Common Stock in the name of a Stockholder,
the Escrow Agent shall cause such certificate to be delivered to such
Stockholder.
5. (a) The Company shall present such documentation as is
reasonably required by the Escrow Agent to evidence the satisfaction of the
condition set forth in Paragraph 4 hereof and shall take such other action as
the Escrow Agent shall reasonably request. The Escrow Agent and the Company
shall prepare any documentation necessary to effectuate the terms of this
Agreement.
(b) The Escrow Agent hereby agrees to be bound by the
terms and conditions of that certain Stockholders Agreement dated as of March
27, 1995 among the Company, The Huff Alternative Income Fund, L.P. and Robert
F.X. Sillerman, Michael G. Ferrel and Bruce Morrow (the "Stockholders
Agreement") to the extent applicable and shall if requested
- 4 -
<PAGE>
issue proxies in the form of proxy contained therein, with respect to the
Escrow Shares held on behalf of such Stockholders.
6. It is understood and agreed by the parties to this
Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed to be
a trustee for any party for any purpose and is merely acting as a depositary
and in a ministerial capacity hereunder with the limited duties herein
prescribed.
(b) The Escrow Agent does not have and shall not be
deemed to have any responsibility in respect of any instruction, certificate
or notice delivered to it or of the Escrow Shares or any related Escrow
Property other than to (i) take all action necessary to effectuate the
conversion of the Series A Stock into Class A Common Stock and (ii) faithfully
carry out the obligations undertaken in this Agreement and to follow the
directions in such instruction or notice provided in accordance with the terms
hereof. The Escrow Agent shall take any action necessary to convert shares of
Class A Common Stock into shares of SFX stock pursuant to that certain Amended
and Restated Agreement and Plan of Merger among SFX Broadcasting, Inc., SFX
Merger Company and the Company. The Escrow Agent shall not be entitled to sell
the Escrow Shares or the Escrow Property.
(c) The Escrow Agent is not and shall not be deemed to be
liable for any action taken or omitted by it in good faith and may rely upon,
and act in accordance with, the advice of its counsel without liability on its
part for any action taken or omitted in accordance
- 5 -
<PAGE>
with such advice. In any event, its liability hereunder shall be limited to
liability for gross negligence or willful misconduct on its part.
(d) The Escrow Agent may conclusively rely upon and act
in accordance with any certificate, instruction, notice, letter, telegram,
cablegram or other written instrument believed by it to be genuine and to have
been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent, as
consideration for services rendered hereunder, the sum of Five Hundred Dollars
($500.00) per annum during the term of this Agreement, (ii) to pay the Escrow
Agent's reasonable fees and to reimburse it for its reasonable expenses
including attorney's fees incurred in connection with duties hereunder and
(iii) to save harmless, indemnify and defend the Escrow Agent for, from and
against any loss, damage, liability, judgment, cost and expense whatsoever,
including counsel fees, suffered or incurred by it by reason of, or on account
of, any misrepresentation made to it or its status or activities as Escrow
Agent under this Agreement except for any loss, damage, liability, judgment,
cost or expense resulting from gross negligence or willful misconduct on the
part of the Escrow Agent. The obligation of the Escrow Agent to deliver the
Escrow Shares to either the Stockholders or the Company shall be subject to
the prior satisfaction upon demand from the Escrow Agent, of the Company's
obligations to so save harmless, indemnify and defend the Escrow Agent and to
reimburse the Escrow Agent or otherwise pay its fees and expenses hereunder.
- 6 -
<PAGE>
(f) The Escrow Agent shall not be required to defend any
legal proceeding which may be instituted against it in respect of the subject
matter of this Agreement unless requested to do so by the Stockholders and, to
the Escrow Agent's satisfaction, indemnified against, and provided advances
with respect to, the cost and expense of such defense by the party requesting
such defense. If any such legal proceeding is instituted against it, the
Escrow Agent agrees promptly to give notice of such proceeding to the
Stockholders and the Company. The Escrow Agent shall not be required to
institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay, omission
or otherwise, be deemed to have waived any right or remedy it may have either
under this Agreement or generally, unless such waiver be in writing, and no
waiver shall be valid unless it is in writing signed by the Escrow Agent, and
only to the extent expressly therein set forth. A waiver by the Escrow Agent
under the terms of this Agreement shall not be construed as a bar to, or
waiver of, the same or any other such right or remedy which it would otherwise
have on any other occasion.
(h) The Escrow Agent may resign as such hereunder by
giving 30 days' written notice thereof to the Stockholders and the Company.
Within 20 days after receipt of such notice, the Stockholders and the Company
shall furnish to the Escrow Agent written instructions for the release of the
Escrow Shares and any related Escrow Property (if such shares and property, if
any, have not yet been released pursuant to Paragraph 4 hereof) to a
substitute Escrow Agent which (whether designated by written instructions from
the Stockholders and the Company jointly or in the absence thereof by
instructions from a court of competent jurisdiction to the Escrow Agent) may
be a bank or trust company organized and doing business under the
- 7 -
<PAGE>
laws of the United States or any state thereof; provided that, nothing
contained in this Agreement shall restrict the Escrow Agent's right to resign
as provided in the first sentence of this paragraph. Such substitute Escrow
Agent shall thereafter hold any Escrow Shares and any related Escrow Property
received by it pursuant to the terms of this Agreement and otherwise act
hereunder as if it were the Escrow Agent originally named herein. The Escrow
Agent's duties and responsibilities hereunder shall terminate upon the release
of all shares then held in escrow according to such written instruction or
upon such delivery as herein provided. This Agreement shall not otherwise be
assignable by the Escrow Agent without the prior written consent of the
Company.
7. During the Escrow Period, the Stockholders shall have the
sole power to vote the Class A Common Stock issued or issuable upon the
conversion of the Series A Stock and any securities deposited in escrow under
this Agreement (including, without limitation, any shares issued in connection
with the Company's proposed merger with SFX Broadcasting, Inc. or any other
Escrow Property) while such shares are being held pursuant to this Agreement.
Upon receipt of instructions from any Stockholder, the Escrow Agent shall take
any and all necessary action to cause the Escrow Shares to be voted in
accordance with such instructions.
8. (a) During the term of this Agreement no Stockholder
shall sell, transfer, hypothecate, negotiate, pledge, assign, encumber or
otherwise dispose of any or all of the shares of Class A Common Stock held in
escrow pursuant to this Agreement. This restriction shall not be applicable to
transfers upon death, upon which all remaining shares shall be released from
escrow, or upon transfers to members of the Stockholders' family or to any
trust for the
- 8 -
<PAGE>
benefit of the Stockholders, provided that such transferees agree to be bound
by the provisions of this Agreement, and subject to the Stockholder set forth
on Exhibit A providing the services necessary to vest such shares in
accordance with Paragraph 4 hereof.
(b) The Stockholders will take any action necessary or
appropriate, including the execution of any further documents or agreements,
in order to effectuate the terms of this Agreement.
9. (a) Each of the certificates representing the
Series A Stock will bear legends to the following effect, as well as any other
legends required by applicable law:
"The sale, transfer, hypothecation,
negotiation, pledge, assignment,
encumbrance or other disposition of the
shares evidenced by this certificate are
restricted by and are subject to all of
the terms, conditions and provisions of a
certain Escrow Agreement entered into
among Multi- Market Radio, Inc., Kraig G.
Fox, as Escrow Agent and the Stockholders,
dated as of July 31, 1996, a copy of which
may be obtained from the Secretary of
Multi-Market Radio, Inc. No transfer, sale
or other disposition of these shares may
be made unless specific conditions of such
agreement are satisfied."
(b) "The shares evidenced by this certificate
have not been registered under the
Securities Act of 1933, as amended. No
transfer, sale or other disposition of
these shares may be made unless a
registration statement with respect to
these shares has become effective under
said act, or the Company is furnished with
an opinion of counsel satisfactory in form
and substance to it that such registration
is not required."
The Company and the Escrow Agent shall direct the transfer
agent for the Company to place stop transfer orders with respect to the Escrow
Shares and to maintain such
- 9 -
<PAGE>
orders in effect until the transfer agent shall have received written notice
from the Company as contemplated in Paragraph 4 hereof.
10. Each notice, instruction or other certificate required
or permitted by the terms hereof shall be in writing and shall be communicated
by personal delivery, facsimile or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
(i) If to the Company, to:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, MA 01144
Attn: Michael G. Ferrel
Fax: 412-732-7851
(ii) If to the Stockholders, to their
respective addresses as set forth on
Exhibit A hereto.
(iii) If to the Escrow Agent, to:
Kraig G. Fox, Escrow Agent
150 East 58th Street, 19th Floor
New York, NY 10155
Fax: 212-743-3188
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given
hereunder by the Escrow Agent shall be effective and deemed received upon
personal delivery or transmission by facsimile or, if mailed, five (5)
calendar days after mailing by the Escrow Agent.
- 10 -
<PAGE>
A copy of all communications sent to the Company, the
Stockholders or the Escrow Agent shall be sent by ordinary mail to Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, Attention: Howard
Berkower, Esq.
11. This Agreement may not be modified, altered or
amended in any material respect or canceled or terminated except with the prior
consent of the parties hereto.
12. This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to
the benefits of all parties hereto and their respective successors in interest
and assigns.
13. This Agreement may be executed in several
counterparts, which taken together shall constitute a single instrument.
- 11 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the day and year
first above written.
MULTI-MARKET RADIO, INC.
By:________________________________
ESCROW AGENT
------------------------------------
Kraig G. Fox
STOCKHOLDERS:
------------------------------------
Robert F.X. Sillerman
SILLERMAN COMMUNICATIONS
MANAGEMENT CORPORATION
By:_________________________________
------------------------------------
Michael Ferrel
-----------------------------------
Howard Tytel
- 12 -
<PAGE>
EXHIBIT A
STOCKHOLDERS' LIST
NAME AND ADDRESS
OF STOCKHOLDER NUMBER OF ESCROW SHARES
-------------- -----------------------
Robert F.X. Sillerman 80,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
Sillerman Communications Management Corporation 40,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
Michael Ferrel 40,000
One Monarch Place, Suite 220
Springfield, Massachusetts 01144
Fax: (413) 732-7851
Howard Tytel 20,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
- 13 -
<PAGE>
ESCROW AGREEMENT
AGREEMENT, dated as of the 31st day of July, 1996, by and
among Kraig G. Fox (hereinafter referred to as the "Escrow Agent"),
Multi-Market Radio, Inc., a Delaware corporation (the "Company"), and the
individuals and entities listed on Exhibit A who have executed this agreement
(hereinafter collectively called the "Stockholders").
WHEREAS, the Board of Directors of the Company has approved
the issuance of shares of Series B Convertible Preferred Stock, par value $.01
per share (the "Series B Stock") to the Stockholders pursuant to a
compensation plan approved by the stockholders of the Company at the 1995
Annual Stockholders Meeting;
WHEREAS, pursuant to the terms of the Certificate of
Designations in respect of the Series B Stock, each share of Series B Stock is
convertible into one share of the Company's Class A Common Stock, par value
$.01 per share ("Class A Common Stock") in the event that the Company
generates broadcast cash flow (as defined in the certificate of designations)
of at least $10 million for the fiscal year ending December 31, 1997 and the
closing sales price of Class A Common Stock for the thirty (30) trading days
immediately preceding the conversion exceeds $7.50 per share (the "Conversion
Conditions");
WHEREAS, the Stockholders and the Company have agreed to
deposit in escrow the shares of Series B Stock and shares of Class A Common
Stock issuable upon the conversion
<PAGE>
of such Series B Stock and any other securities or property that such
securities are or otherwise become convertible into or otherwise receive or
are entitled to receive (the "Escrow Shares").
In consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:
1. The Stockholders and the Company hereby appoint Kraig G.
Fox, as Escrow Agent, and Kraig G. Fox, by his execution of this Agreement
hereby acknowledges and accepts his appointment as Escrow Agent to hold the
Escrow Shares in escrow, upon the terms, provisions and conditions hereof.
This Agreement shall become effective on the date hereof (the "Effective
Date") and shall continue in effect until the distribution by the Escrow Agent
of all of the Escrow Shares in accordance with the terms hereof (the
"Termination Date"). The period of time form the Effective Date until the
Termination Date is referred to herein as the "Escrow Period."
2. The Company shall cause stock certificates representing
the Series B Stock for each of the Stockholders in the amount set forth on
Exhibit A hereto to be issued registered in the name of Kraig G. Fox, as
Escrow Agent, and shall cause such certificates to be delivered to the Escrow
Agent within five (5) business days of the Effective Date. Said certificates
shall contain the legend set forth in Paragraph 9(a) hereof. Within five (5)
business days of receipt of notice from the Company that the Conversion
Conditions have been satisfied, the Escrow Agent shall deliver the stock
certificates representing the Series B Stock to the Company's transfer agent
with irrevocable instructions to issue and deliver to the Escrow Agent
- 2 -
<PAGE>
stock certificates representing shares of Class A Common Stock for each of the
Stockholders registered in the name of the Escrow Agent, in exchange for the
Series B Stock. Said certificates shall have the legend set forth in Paragraph
9(a) hereof.
3. During the Escrow Period, any and all of the money,
securities, rights or property distributed in respect of the Escrow Shares
then held in escrow, including any such property distributed as dividends or
pursuant to any stock split, merger, recapitalization, dissolution, or total
or partial liquidation of the Company shall be delivered to the Escrow Agent,
such property to be held and distributed as herein provided and is hereinafter
referred to collectively as the "Escrow Property."
4. The Escrow Shares of each Stockholder shall vest in five
equal annual installments beginning on April 30, 1997 (the "Initial
Disbursement Date") provided that each such Stockholder provides substantial
services for the Company during each fiscal year ended December 31 immediately
preceding such April 30. After each fiscal year, the Company shall deliver to
the Escrow Agent a certificate stating whether such Stockholder has performed
substantial services (as defined in Treasury Regulation 1-83-3(c)) during the
most recent fiscal year-end. If the Company certifies to the Escrow Agent, the
Escrow Agent shall take such necessary action, within thirty (30) days of
receipt of said certificate, to cause the Company's transfer agent to (i)
reissue a stock certificate in the name of the Stockholder for 20% of the
total shares set forth on Exhibit A or such other Escrow Property ("Vested
Amount") which stock certificate shall not contain the legend set forth in
Paragraph 9(a) hereof and, (ii) issue and deliver to the Escrow Agent a stock
certificate in the name of the Escrow Agent for the
- 3 -
<PAGE>
remaining shares of Class A Common Stock which certificate shall contain the
legend set forth in Paragraph 9(a) hereof. If the Company fails to deliver
said certificate, the Escrow Agent shall take such action to cause the
Company's transfer agent to cancel shares of Class A Common Stock equal to the
Vested Amount and reissue a certificate in the name of the Escrow Agent for
the remaining shares of Class A Common Stock which certificate shall contain
the legend set forth in Paragraph 9(a) hereof. After any such cancellation of
stock, the Stockholders shall have no further rights as a stockholder of the
Company with respect to any of the canceled Escrow Shares. Upon receipt of any
unlegended stock certificates for shares of Class A Common Stock in the name
of a Stockholder, the Escrow Agent shall cause such certificate to be
delivered to such Stockholder.
5. The Company shall (i) promptly provide the Escrow Agent
with notice of the satisfaction of the Conversion Conditions, (ii) present
such documentation as is reasonably required by the Escrow Agent to evidence
the satisfaction of the condition set forth in Paragraph 4 hereof and (iii)
take such other action as the Escrow Agent shall reasonably request. The
Escrow Agent and the Company shall prepare any documentation necessary to
effectuate the terms of this Agreement.
6. It is understood and agreed by the parties to this
Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed
to be a trustee for any party for any purpose and is merely acting as a
depositary and in a ministerial capacity hereunder with the limited duties
herein prescribed.
- 4 -
<PAGE>
(b) The Escrow Agent does not have and shall not be
deemed to have any responsibility in respect of any instruction, certificate
or notice delivered to it or of the Escrow Shares or any related Escrow
Property other than to (i) take all action necessary to effectuate the
conversion of the Series B Stock into Class A Common upon the satisfaction of
the Conversion Conditions and (ii) faithfully carry out the obligations
undertaken in this Agreement and to follow the directions in such instruction
or notice provided in accordance with the terms hereof. The Escrow Agent shall
take any action necessary to convert shares of Class A Common Stock into
shares of SFX stock pursuant to that certain Amended and Restated Agreement
and Plan of Merger among SFX Broadcasting, Inc., SFX Merger Company and the
Company. The Escrow Agent shall not be entitled to sell and shall not sell the
Escrow Shares or the Escrow Property.
(c) The Escrow Agent is not and shall not be deemed
to be liable for any action taken or omitted by it in good faith and may rely
upon, and act in accordance with, the advice of its counsel without liability
on its part for any action taken or omitted in accordance with such advice. In
any event, its liability hereunder shall be limited to liability for gross
negligence or willful misconduct on its part.
(d) The Escrow Agent may conclusively rely upon and
act in accordance with any certificate, instruction, notice, letter, telegram,
cablegram or other written instrument believed by it to be genuine and to have
been signed by the proper party or parties.
- 5 -
<PAGE>
(e) The Company agrees (i) to pay the Escrow Agent,
as consideration for services rendered hereunder, the sum of Five Hundred
Dollars ($500.00) per annum during the term of this Agreement, (ii) to pay the
Escrow Agent's reasonable fees and to reimburse it for its reasonable expenses
including attorney's fees incurred in connection with duties hereunder and
(iii) to save harmless, indemnify and defend the Escrow Agent for, from and
against any loss, damage, liability, judgment, cost and expense whatsoever,
including counsel fees, suffered or incurred by it by reason of, or on account
of, any misrepresentation made to it or its status or activities as Escrow
Agent under this Agreement except for any loss, damage, liability, judgment,
cost or expense resulting from gross negligence or willful misconduct on the
part of the Escrow Agent. The obligation of the Escrow Agent to deliver the
Escrow Shares to either the Stockholders or the Company shall be subject to
the prior satisfaction upon demand from the Escrow Agent, of the Company's
obligations to so save harmless, indemnify and defend the Escrow Agent and to
reimburse the Escrow Agent or otherwise pay its fees and expenses hereunder.
(f) The Escrow Agent shall not be required to
defend any legal proceeding which may be instituted against it in respect of
the subject matter of this Agreement unless requested to do so by the
Stockholders and, to the Escrow Agent's satisfaction, indemnified against, and
provided advances with respect to, the cost and expense of such defense by the
party requesting such defense. If any such legal proceeding is instituted
against it, the Escrow Agent agrees promptly to give notice of such proceeding
to the Stockholders and the Company. The Escrow Agent shall not be required to
institute legal proceedings of any kind.
- 6 -
<PAGE>
(g) The Escrow Agent shall not, by act, delay,
omission or otherwise, be deemed to have waived any right or remedy it may
have either under this Agreement or generally, unless such waiver be in
writing, and no waiver shall be valid unless it is in writing signed by the
Escrow Agent, and only to the extent expressly therein set forth. A waiver by
the Escrow Agent under the terms of this Agreement shall not be construed as a
bar to, or waiver of, the same or any other such right or remedy which it
would otherwise have on any other occasion.
(h) The Escrow Agent may resign as such hereunder
by giving 30 days' written notice thereof to the Stockholders and the Company.
Within 20 days after receipt of such notice, the Stockholders and the Company
shall furnish to the Escrow Agent written instructions for the release of the
Escrow Shares and any related Escrow Property (if such shares and property, if
any, have not yet been released pursuant to Paragraph 4 hereof) to a
substitute Escrow Agent which (whether designated by written instructions from
the Stockholders and the Company jointly or in the absence thereof by
instructions from a court of competent jurisdiction to the Escrow Agent) may
be a bank or trust company organized and doing business under the laws of the
United States or any state thereof; provided that, nothing contained in this
Agreement shall restrict the Escrow Agent's right to resign as provided in the
first sentence of this paragraph. Such substitute Escrow Agent shall
thereafter hold any Escrow Shares and any related Escrow Property received by
it pursuant to the terms of this Agreement and otherwise act hereunder as if
it were the Escrow Agent originally named herein. The Escrow Agent's duties
and responsibilities hereunder shall terminate upon the release of all shares
then held in escrow according to such written instruction or upon such
delivery as herein provided. This Agreement
- 7 -
<PAGE>
shall not otherwise be assignable by the Escrow Agent without the prior
written consent of the Company.
7. During the Escrow Period, the Stockholders shall have the
sole power to vote the Class A Common Stock issued or issuable upon the
conversion of the Series B Stock and any securities deposited in escrow under
this Agreement (including, without limitation, any shares issued in connection
with the Company's proposed merger with SFX Broadcasting, Inc. or any other
Escrow Property) while such shares are being held pursuant to this Agreement.
Upon receipt of instructions from any Stockholder, the Escrow Agent shall take
any and all necessary action to cause the Escrow Shares to be voted in
accordance with such instructions.
8. (a) During the term of this Agreement no Stockholder
shall sell, transfer, hypothecate, negotiate, pledge, assign, encumber or
otherwise dispose of any or all of the shares of Class A Common Stock held in
escrow pursuant to this Agreement. This restriction shall not be applicable to
transfers upon death, upon which all remaining shares shall be released from
escrow, or upon transfers to members of the Stockholders' family or to any
trust for the benefit of the Stockholders, provided that such transferees
agree to be bound by the provisions of this Agreement, and subject to the
Stockholder set forth on Exhibit A providing the services necessary to vest
such shares in accordance with Paragraph 4 hereof.
(b) The Stockholders will take any action necessary
or appropriate, including the execution of any further documents or
agreements, in order to effectuate the terms of this Agreement.
- 8 -
<PAGE>
9. (a) Each of the certificates representing the
Series B Stock will bear legends to the following effect, as well as any other
legends required by applicable law:
"The sale, transfer, hypothecation,
negotiation, pledge, assignment,
encumbrance or other disposition of the
shares evidenced by this certificate are
restricted by and are subject to all of
the terms, conditions and provisions of a
certain Escrow Agreement entered into
among Multi-Market Radio, Inc., Kraig G.
Fox, as Escrow Agent and the Stockholders,
dated as of July 31, 1996, a copy of which
may be obtained from the Secretary of
Multi-Market Radio, Inc. No transfer, sale
or other disposition of these shares may
be made unless specific conditions of such
agreement are satisfied."
(b) "The shares evidenced by this certificate
have not been registered under the
Securities Act of 1933, as amended. No
transfer, sale or other disposition of
these shares may be made unless a
registration statement with respect to
these shares has become effective under
said act, or the Company is furnished with
an opinion of counsel satisfactory in form
and substance to it that such registration
is not required."
The Company and the Escrow Agent shall direct the transfer
agent for the Company to place stop transfer orders with respect to the Escrow
Shares and to maintain such orders in effect until the transfer agent shall
have received written notice from the Company as contemplated in Paragraph 4
hereof.
10. Each notice, instruction or other certificate required
or permitted by the terms hereof shall be in writing and shall be communicated
by personal delivery, facsimile or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
- 9 -
<PAGE>
(i) If to the Company, to:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, MA 01144
Attn: Michael G. Ferrel
Fax: 412-732-7851
(ii) If to the Stockholders, to their respective
addresses as set forth on Exhibit A hereto.
(iii) If to the Escrow Agent, to:
Kraig G. Fox, Escrow Agent
150 East 58th Street, 19th Floor
New York, NY 10155
Fax: 212-743-3188
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given
hereunder by the Escrow Agent shall be effective and deemed received upon
personal delivery or transmission by facsimile or, if mailed, five (5)
calendar days after mailing by the Escrow Agent.
A copy of all communications sent to the Company, the
Stockholders or the Escrow Agent shall be sent by ordinary mail to Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, Attention: Howard
Berkower, Esq.
11. This Agreement may not be modified, altered or
amended in any material respect or canceled or terminated except with the prior
consent of the parties hereto.
- 10 -
<PAGE>
12. This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to
the benefits of all parties hereto and their respective successors in interest
and assigns.
13. This Agreement may be executed in several
counterparts, which taken together shall constitute a single instrument.
- 11 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers on the day and year
first above written.
MULTI-MARKET RADIO, INC.
By:________________________________
ESCROW AGENT
----------------------------------
Kraig G. Fox
STOCKHOLDERS:
------------------------------------
Robert F.X. Sillerman
SILLERMAN COMMUNICATIONS
MANAGEMENT CORPORATION
By:_________________________________
------------------------------------
Michael Ferrel
-----------------------------------
Howard Tytel
- 12 -
<PAGE>
EXHIBIT A
STOCKHOLDERS' LIST
NAME AND ADDRESS
OF STOCKHOLDER NUMBER OF ESCROW SHARES
-------------- -----------------------
Robert F.X. Sillerman 80,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
Sillerman Communications Management Corporation 40,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
Michael Ferrel 40,000
One Monarch Place, Suite 220
Springfield, Massachusetts 01144
Fax: (413) 732-7851
Howard Tytel 20,000
150 East 58th Street
New York, New York 10155
Fax: (212) 753-3188
- 13 -
<PAGE>
AGREEMENT
THIS AGREEMENT, dated as of July 26, 1996, is between SFX
BROADCASTING, INC., a Delaware corporation ("SFX"), and CHILTON INVESTMENT
PARTNERS, L.P. and RICHARD L. CHILTON, Jr. (collectively, the "Stockholders").
WHEREAS, concurrently herewith, SFX, SFX Merger Company, a
Delaware corporation and a wholly-owned subsidiary of SFX ("Acquiror Sub"),
and Multi-Market Radio, Inc., a Delaware corporation (the "Company"), are
entering into an amendment to the Amended and Restated Agreement and Plan of
Merger (as amended, the "Merger Agreement"; capitalized terms used without
definition herein having the meanings ascribed thereto in the Merger
Agreement);
WHEREAS, the Stockholders are collectively the record and/or
beneficial owners on the date hereof of an aggregate of 172,885 shares of
Class A Common Stock, $.01 of par value, of the Company (the "Shares")
(excluding any holdings of Class A Warrants and Class B Warrants);
WHEREAS, approval of the Merger Agreement and the Merger by
the Company's stockholders is a condition to the consummation of the Merger;
and
WHEREAS, as a condition to its entering into the amendment
to the Merger Agreement, SFX has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
SECTION 1. VOTING AGREEMENT. From the date of this Agreement
until December 31, 1996, the Stockholders hereby agree that at any meeting of
the stockholders of the Company, however called, and any action by consent of
the stockholders of the Company, the Stockholders shall vote the Shares, and
any other voting securities of the Company, whether issued heretofore or
hereafter, which are held of record or beneficially by the Stockholders on the
record date for such meeting or consent, (i) in favor of the Merger and the
Merger Agreement, as such Merger Agreement may be amended from time to time in
accordance with Section 2(b) hereof, (ii) in favor of adoption and approval of
an amendment to the Company's Restated Certificate of Incorporation and any
other transaction contemplated by the Merger Agreement, as such Merger
Agreement may be amended from time to time in accordance with Section 2(b)
hereof, and (iii) against any proposal for any recapitalization, merger (other
than the Merger), sale of assets or other business combination between the
Company and any person or entity (other than SFX or Acquiror Sub or any
affiliate thereof) or any other action or agreement that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the transactions contemplated by the Merger
Agreement.
SECTION 2. EFFECTIVENESS; TERMINATION AND AMENDMENT TO
MERGER AGREEMENT. (a) It is a condition precedent to the effectiveness of this
Agreement that the amendment to the Merger Agreement shall have been executed
and delivered as contemplated. In the event that (i) the Merger Agreement is
terminated in accordance with its terms or (ii) the consideration to be paid
in the Merger to the holders of the Class A Common Stock of the Company is
less than $12.00 (subject to adjustment as set forth in the Merger Agreement)
in value per share as calculated pursuant to the Merger Agreement, this
<PAGE>
Agreement shall automatically terminate and be of no further force or effect.
Upon such termination, except for any rights any party may have in respect of
any breach by any other party of its obligations hereunder, none of the
parties hereto shall have any further obligation or liability hereunder.
(b) An amendment to the Merger Agreement shall be deemed to be made
in accordance with this Agreement if (i) approved by the Independent Committee
of MMR, (ii) an opinion is obtained from Oppenheimer & Co., Inc. substantially
to the effect that the consideration to be paid to the holders of MMR Class A
Common Stock (other than Messrs. Morrow, Ferrel and Sillerman) is fair from a
financial point of view, and (iii) the consideration to be paid in the Merger
to the holders of the Class A Common Stock of the Company is not less than
$12.00 (subject to adjustment as set forth in the Merger Agreement) in value
per share, as calculated pursuant to the Merger Agreement, and the transaction
is structured as a tax-free reorganization.
SECTION 3. REPRESENTATIONS AND WARRANTIES. SFX represents
and warrants (i) that this Agreement has been duly executed and delivered by
SFX and constitutes the valid and binding agreement of SFX, enforceable
against SFX in accordance with its terms and (ii) that it will notify the
Company of this Agreement. The Stockholders represent and warrant to SFX as
follows: This Agreement has been duly executed and delivered by each of the
Stockholders and constitutes the valid and binding agreement of the
Stockholders, enforceable against the Stockholders in accordance with its
terms. The Shares (i) are the only voting securities of the Company owned
(beneficially or of record) by the Stockholders on the date hereof (except for
any Class A Warrants and Class B Warrants), and, (ii) either are owned of
record by the Chilton Investment Partners, L.P. or are owned of record by
other entities; and (iii) in all cases, Richard L. Chilton, Jr. has the sole
investing and voting power over the Shares. Except as provided in this
Agreement, the Shares are not subject to any voting trust, voting agreement or
similar arrangement whatsoever. The Stockholders have not negotiated or
discussed the contents of this Agreement with any officer or director of the
Company, or representative of the Company acting in such capacity.
SECTION 4. INDEMNITY. SFX agrees to indemnify and hold
harmless Stockholders, and all directors, officers, agents and other persons,
if any, who control such Stockholders within the meaning of Section 15 of the
Securities Act of 1933, from and against any and all liabilities, damages,
costs and expenses (including the fees of one counsel) which may arise or be
asserted against or may be incurred by stockholders, from any claims, actions
or proceedings arising out of this Agreement or any of the transactions
contemplated hereby asserted by parties not signatory hereto or asserted in
derivative actions brought other than by Stockholders.
SECTION 5. MISCELLANEOUS. (a) Amendments, Waivers, Etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified or terminated except by an instrument in writing signed by SFX and
the Stockholders.
(b) Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement.
(c) No Waiver. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by any other party hereto with its obligations hereunder, and any custom or
practice
-2-
<PAGE>
of the parties at variance with the terms hereof, shall not constitute a
waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
(d) Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any person
or entity which is not a party hereto.
(e) Governing Law. This Agreement is governed by and
construed in accordance with the laws of the State of Delaware (without regard
to conflict of laws principles).
(f) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together constitute an instrument. Each counterpart may consist
of a number of copies each signed by less that all, but together signed by
all, the parties hereto.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SFX BROADCASTING, INC.
By: /s/ Richard A. Liese
------------------------------------
Name: Richard A. Liese
------------------------------------
Title: Vice President
------------------------------------
CHILTON INVESTMENT PARTNERS, L.P.
By: /s/ Richard L. Chilton
-------------------------------------
Name: Richard L. Chilton
Title: General Partner
RICHARD L. CHILTON
By: /s/ Richard L. Chilton
--------------------------------------
Name: Richard L. Chilton
-3-
<PAGE>
AGREEMENT
THIS AGREEMENT, dated as of July 26, 1996, is between SFX
BROADCASTING, INC., a Delaware corporation ("SFX"), and GABRIEL CAPITAL, L.P.
and ARIEL FUND LIMITED (collectively, the "Stockholders").
WHEREAS, concurrently herewith, SFX, SFX Merger Company, a
Delaware corporation and a wholly-owned subsidiary of SFX ("Acquiror Sub"),
and Multi-Market Radio, Inc., a Delaware corporation (the "Company"), are
entering into an amendment to the Amended and Restated Agreement and Plan of
Merger (as amended, the "Merger Agreement"; capitalized terms used without
definition herein having the meanings ascribed thereto in the Merger
Agreement);
WHEREAS, the Stockholders are collectively the record and
beneficial owners on the date hereof of 256,355 shares of Class A Common
Stock, $.01 of par value, of the Company (the "Shares") (excluding any
holdings of Class A Warrants and Class B Warrants);
WHEREAS, approval of the Merger Agreement and the Merger by
the Company's stockholders is a condition to the consummation of the Merger;
and
WHEREAS, as a condition to its entering into the amendment
to the Merger Agreement, SFX has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
SECTION 1. VOTING AGREEMENT. From the date of this Agreement
until December 31, 1996, the Stockholders hereby agree that at any meeting of
the stockholders of the Company, however called, and any action by consent of
the stockholders of the Company, the Stockholders shall vote the Shares, and
any other voting securities of the Company, whether issued heretofore or
hereafter, which are held of record or beneficially by the Stockholders on the
record date for such meeting or consent, (i) in favor of the Merger and the
Merger Agreement, as such Merger Agreement may be amended from time to time in
accordance with Section 2(b) hereof, (ii) in favor of adoption and approval of
an amendment to the Company's Restated Certificate of Incorporation and any
other transaction contemplated by the Merger Agreement, as such Merger
Agreement may be amended from time to time in accordance with Section 2(b)
hereof, and (iii) against any proposal for any recapitalization, merger (other
than the Merger), sale of assets or other business combination between the
Company and any person or entity (other than SFX or Acquiror Sub or any
affiliate thereof) or any other action or agreement that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the transactions contemplated by the Merger
Agreement.
SECTION 2. EFFECTIVENESS; TERMINATION AND AMENDMENT TO
MERGER AGREEMENT. (a) It is a condition precedent to the effectiveness of this
Agreement that the amendment to the Merger Agreement shall have been executed
and delivered as contemplated. In the event that (i) the Merger Agreement is
terminated in accordance with its terms or (ii) the consideration to be paid
in the Merger to the holders of the Class A Common Stock of the Company is
less than $12.00 (subject to adjustment as set forth in the Merger Agreement)
in value per share as calculated pursuant to the Merger Agreement, this
<PAGE>
Agreement shall automatically terminate and be of no further force or effect.
Upon such termination, except for any rights any party may have in respect of
any breach by any other party of its obligations hereunder, none of the
parties hereto shall have any further obligation or liability hereunder.
(b) An amendment to the Merger Agreement shall be deemed to be made
in accordance with this Agreement if (i) approved by the Independent Committee
of MMR, (ii) an opinion is obtained from Oppenheimer & Co., Inc. substantially
to the effect that the consideration to be paid to the holders of MMR Class A
Common Stock (other than Messrs. Morrow, Ferrel and Sillerman) is fair from a
financial point of view, and (iii) the consideration to be paid in the Merger
to the holders of the Class A Common Stock of the Company is not less than
$12.00 (subject to adjustment as set forth in the Merger Agreement) in value
per share, as calculated pursuant to the Merger Agreement, and the transaction
is structured as a tax-free reorganization.
SECTION 3. REPRESENTATIONS AND WARRANTIES. SFX represents
and warrants (i) that this Agreement has been duly executed and delivered by
SFX and constitutes the valid and binding agreement of SFX, enforceable
against SFX in accordance with its terms and (ii) that it will notify the
Company of this Agreement. The Stockholders represent and warrant to SFX as
follows: This Agreement has been duly executed and delivered by each of the
Stockholders and constitutes the valid and binding agreement of the
Stockholders, enforceable against the Stockholders in accordance with its
terms. The Shares are the only voting securities of the Company owned
(beneficially or of record) by the Stockholders on the date hereof (except for
any Class A Warrants and Class B Warrants), and, except as provided in this
Agreement, the Shares are not subject to any voting trust, voting agreement or
similar arrangement whatsoever. The Stockholders have not negotiated or
discussed the contents of this Agreement with any officer or director of the
Company, or representative of the Company acting in such capacity.
SECTION 4. INDEMNITY. SFX agrees to indemnify and hold
harmless Stockholders, and all directors, officers, agents and other persons,
if any, who control such Stockholders within the meaning of Section 15 of the
Securities Act of 1933, from and against any and all liabilities, damages,
costs and expenses (including the fees of one counsel) which may arise or be
asserted against or may be incurred by stockholders, from any claims, actions
or proceedings arising out of this Agreement or any of the transactions
contemplated hereby asserted by parties not signatory hereto or asserted in
derivative actions brought other than by Stockholders.
SECTION 5. MISCELLANEOUS. (a) Amendments, Waivers, Etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified or terminated except by an instrument in writing signed by SFX and
the Stockholders.
(b) Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement.
(c) No Waiver. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
-2-
<PAGE>
(d) Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any person
or entity which is not a party hereto.
(e) Governing Law. This Agreement is governed by and
construed in accordance with the laws of the State of Delaware (without regard
to conflict of laws principles).
(f) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together constitute an instrument. Each counterpart may consist
of a number of copies each signed by less that all, but together signed by
all, the parties hereto.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SFX BROADCASTING, INC.
By: /s/ Richard A. Liese
______________________________________
Name: Richard A. Liese
______________________________________
Title: Vice President
______________________________________
GABRIEL CAPITAL, L.P.
By: /s/ J. Ezra Merkin
____________________________________
Name: J. Ezra Merkin
Title: General Partner
ARIEL FUND LIMITED
By: Meespierson Management (Cayman) Limited
By: /s/ Peter A. DeRuijter
_________________________________________
Name: Peter A. DeRuijter
Title: Director
By: /s/ Martin Byrne
_________________________________________
Name: Martin Byrne
Title: Assistant Secretary
-3-
<PAGE>
AGREEMENT
THIS AGREEMENT, dated as of July 31, 1996, is between SFX
BROADCASTING, INC., a Delaware corporation ("SFX"), and J. MORTON DAVIS and
D.H. BLAIR INVESTMENT BANKING CORP. (collectively, the "Stockholders").
WHEREAS, concurrently herewith, SFX, SFX Merger Company, a
Delaware corporation and a wholly-owned subsidiary of SFX ("Acquiror Sub"),
and Multi-Market Radio, Inc., a Delaware corporation (the "Company"), are
entering into an amendment to the Amended and Restated Agreement and Plan of
Merger (as amended, the "Merger Agreement"; capitalized terms used without
definition herein having the meanings ascribed thereto in the Merger
Agreement);
WHEREAS, excluding 141,496 Class A Warrants, 141,496 Class B
Warrants and 10,448 Unit Purchase Options the Stockholders are collectively
the record and beneficial owners on the date hereof of 312,706 shares (the
"Shares") of Class A Common Stock, $.01 of par value, of the Company (the
"Common Stock");
WHEREAS, approval of the Merger Agreement and the Merger by
the Company's stockholders is a condition to the consummation of the Merger;
and
WHEREAS, as a condition to its entering into the amendment
to the Merger Agreement, SFX has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
SECTION 1. VOTING AGREEMENT. From the date of this Agreement
until the earliest of (i) the effective date of the Merger, (ii) the
termination of the Merger Agreement or (iii) June 30, 1997: Subject to the
representations of the Company, the Stockholders hereby agree that at any
meeting of the stockholders of the Company, however called, and any action by
consent of the stockholders of the Company, the Stockholders shall vote the
Shares, and any other voting securities of the Company, whether issued
heretofore or hereafter, which are held of record or beneficially by the
Stockholders, on the applicable record date, but which shall not include any
shares of Common Stock held in discretionary brokerage accounts of clients of
the Stockholders in favor of (1) adoption and approval of an amendment to the
Company's Restated Certificate of Incorporation, and (2) the Merger and the
Merger Agreement, as such Merger Agreement may be amended from time to time in
accordance with Section 4(b) hereof; provided that the Stockholders'
obligation to vote the Shares is conditioned on there being no tender offer or
other proposal for any recapitalization, merger (other than the Merger), sale
of assets or other business combination between the Company and any person or
entity or any other action or agreement that is intended, or could reasonably
be expected, to provide a higher value for the Shares than that provided by
the Merger Agreement.
SECTION 2. SECURITIES ACT COVENANTS AND REPRESENTATIONS.
Subject to SFX's obligations under Section 3(a), the Stockholders hereby agree
and represents to SFX as follows:
<PAGE>
(a) The Stockholders have been advised that the offer, sale
and delivery of the SFX Common Stock to the Stockholders pursuant to
the Merger may not be registered under the Securities Act, despite
SFX's obligations to use best efforts to effect such registration.
The Stockholders have been advised that if the offer, sale and
delivery of the SFX Common Stock to the Stockholders pursuant to the
Merger has not been registered under the Securities Act, then such
shares (the "Merger Shares") may not be offered, sold, pledged,
hypothecated or otherwise transferred unless subsequently registered
under the Securities Act or an exemption from such registration is
available. The Stockholders have also been advised that even if the
sale and delivery to the stockholder of the Merger Shares is
registered under the Securities Act, to the extent the Stockholders
are considered an "affiliate" of the Company at the time the Merger
Agreement is submitted for a vote of the stockholders of the Company,
any public offering or sale by the Stockholders of the Merger Shares
will, under current law, require either (i) the further registration
under the Securities Act of the Merger Shares, which SFX is obligated
under Section 3(a) to use best efforts to effect, (ii) compliance
with Rule 145 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act or (iii) the availability
of another exemption from such registration under the Securities Act.
(b) The Stockholders have read this Agreement and the Merger
Agreement and have discussed their requirements and other applicable
limitations upon their ability to sell, transfer or otherwise dispose
of the Merger Shares, to the extent the Stockholders believed
necessary, with their counsel.
SECTION 3. REGISTRATION OF MERGER SHARES. (a) SFX shall, as
soon as practicable but no later than the date of filing its final amendment
to its Registration Statement on Form S-4 relating to the Merger, file with
the Commission a registration statement under the Securities Act covering the
sale of the Merger Shares, and shall use best efforts on or before the
Effective Time to effect the registration under the Securities Act, on an
appropriate form, of the resale of the Merger Shares by the Stockholders. SFX
shall keep such registration continuously effective until such time as the
Merger Shares have been disposed of by the Stockholders but in no event for a
period longer than the period ending the date on which the Merger Shares are
eligible for sale under Rule 144 (including but not limited to Rule 144(k))
during any one three month period. For purposes of this Section 3,
"Registration Statement" means the registration statement covering the Merger
Shares filed pursuant hereto, including, to the extent applicable, the
prospectus (the "Prospectus") included in any such registration statement, all
amendments and supplements to any such registration statement (including
post-effective amendments), all exhibits to any such registration statement
and all material incorporated by reference in any such registration statement.
SFX shall assume the obligations of the Company under that certain Unit
Purchase Option dated March 30, 1994, and, if requested, shall include the
shares of Common Stock issuable under the exercise of the Unit Purchase Option
in the Registration Statement upon the terms and conditions set forth therein.
(b) In connection with SFX's registration obligations
pursuant to Section 3(a) and, except as provided in Section 3(b)(i), SFX shall
keep continuously effective the Registration Statement for the period of time
provided in Section 3(a), to permit the sale of the Merger Shares pursuant to
the Registration Statement, and shall:
(i) notify the Stockholders, as promptly as
practicable (A) when a new Registration Statement,
Prospectus or supplement thereto or post-effective amendment
has been filed, and, with respect to a new Registration
Statement or post-effective amendment when it has become
effective, (B) of any request by the Commission for
amendments or
-2-
<PAGE>
supplements to any Registration Statement or Prospectus or
for additional information, (C) of the issuance by the
Commission of any comments with respect to any filing and of
any stop order suspending the effectiveness of any
Registration Statement or the initiation of any proceedings
for that purpose, (D) of the receipt by SFX of any
notification with respect to the suspension of the
qualification of the Merger Shares for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose, (E) of the happening of any
event that makes any statement made in any Registration
Statement, Prospectus or any document incorporated therein
by reference untrue or that requires the making of any
changes in any Registration Statement, Prospectus or any
document incorporated therein by reference in order to make
the statements therein not misleading, and (F) of SFX's
determination that a post-effective amendment to a
Registration Statement would be appropriate; and
(ii) use best efforts to (A) take all action
necessary or advisable to effect such registration in the
manner contemplated by this Agreement, including but not
limited to furnishing copies of the Prospectus as the
Stockholders shall request, and registering the Merger
Shares for sale under the securities or "blue sky" laws of
such jurisdictions as the Stockholders may designate, and
will make such applications and furnish such information as
may be required for that purpose and to comply with such
laws, provided that SFX shall not be required to qualify as
a foreign corporation or a dealer in securities or to
execute a general consent or service of process in any
jurisdiction in any action other than one arising out of the
sale of the Merger Shares, (B) as promptly as practicable,
prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep
the Registration Statement effective at all times until such
date as is provided above, and, during such period, comply
with the provisions of the Securities Act applicable to SFX
with respect to the disposition of all Merger Shares of the
Company covered by the Registration Statement; (C) cause all
the Merger Shares covered by the Registration Statement to
be listed on a national securities exchange and on each
additional national securities exchange on which similar
securities issued by SFX are then listed, or secure
designation of all the Merger Shares on the Nasdaq National
Market or for trading in The Nasdaq SmallCap Market
(whichever is at the time the principal trading market for
the Common stock); and (D) take all other reasonable actions
necessary to expedite and facilitate disposition by the
Stockholders of the Merger Shares pursuant to the
Registration Statement.
(c) The Stockholders shall furnish to SFX such information
regarding the Stockholders and the plan of distribution of the Merger Shares
as SFX may from time to time reasonably request.
(d) The Stockholders agree that upon receipt of any notice
from SFX of the happening of any event of the kind described in Sections
3(b)(i)(B), 3(b)(i)(C), 3(b)(i)(D), 3(b)(i)(E) or 3(b)(i)(F), they shall
forthwith discontinue disposition of the Merger Shares pursuant to the
Prospectus until (A) they are advised in writing by SFX that a new
Registration Statement covering the offer of the Merger Shares has become
effective under the Securities Act or (B) they receive copies of a
supplemented or amended Prospectus, or (C) until they are advised in writing
by SFX that the use of the Prospectus may be resumed. SFX shall promptly take
all such action as may be necessary or appropriate, including, without
limitation, the filing of a new Registration Statement or an amendment to the
then current Registration Statement
-3-
<PAGE>
and/or the filing of an amended Prospectus, to limit the duration of any
discontinuance with respect to the disposition of the Merger Shares pursuant
to this Section 3(d).
(e) All expenses incident to SFX's performance of or
compliance with this Agreement and Stockholders' execution of this Agreement,
including without limitation all registration and filing fees, fees and
expenses for compliance with securities or blue sky laws (including fees and
disbursements of SFX's counsel in connection with blue sky qualifications or
registrations (or the obtaining of exemptions therefrom) of the Merger
Shares), printing expenses (including expenses of printing Prospectuses),
messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), fees and disbursements of counsel (including
counsel to the Stockholders) and SFX's independent certified public
accountants, fees and expenses of any special experts retained by SFX in
connection with any registration hereunder, and fees and expenses of other
persons retained by SFX, but excluding fees and disbursements of counsel
retained by the Stockholders, any fees and expenses of any underwriters and
transfer taxes, if any, relating to the Merger Shares, shall be borne by SFX.
(f) SFX shall indemnify and hold harmless, to the full
extent permitted by law, (i) the Stockholders and the officers, directors and
controlling persons of such Stockholders against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
legal expenses (collectively "Damages") resulting from any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
any Prospectus, or any amendment or supplement thereto, or 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 in
each case insofar, but only insofar, as the same arises out of or is based
upon an untrue statement or alleged untrue statement of a material fact or an
omission or alleged omission to state a material fact in such Registration
Statement, Prospectus, amendment or supplement, as the case may be, made or
omitted, as the case may be, in reliance upon and in conformity with written
information furnished to SFX by a Stockholder expressly for use therein and
(ii) the Stockholders against all Damages resulting from either the failure to
have the Registration Statement declared effective at or prior to the
Effective Time or the inability of the Stockholders to use the Prospectus to
sell Merger Shares.
(g) The Stockholders with respect only to written
information furnished by them to SFX expressly for use in any Registration
Statement, any Prospectus, or any amendment or supplement thereto shall
indemnify and hold harmless, to the full extent permitted by law, SFX, its
officers, directors, employees, representatives and agents, and each Person
who controls (within the meaning of the Securities Act) SFX, against all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation and legal expenses) resulting from any untrue or alleged
untrue statement of a material fact contained in such Registration Statement,
any Prospectus, or any amendment or supplement thereto, or any omission or
alleged omission to state in any thereof a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent the same arises out of or is based upon an
untrue statement or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact in such Registration Statement,
Prospectus, amendment or supplement, as the case may be, made or omitted, as
the case may be, in reliance upon and in conformity with such written
information; provided that in no event shall either Stockholder be liable for
an amount in excess of the sale proceeds received by such Stockholder.
SECTION 4. EFFECTIVENESS AND TERMINATION. (a) It is a
condition precedent to the effectiveness of this Agreement that an amendment
to the Merger Agreement shall have been executed and delivered. In the event
that (i) the Merger Agreement is terminated in accordance with its terms or
(ii) the
-4-
<PAGE>
consideration to be paid in the Merger to the holders of the Class A Common
Stock of the Company is less than $12.00 (or any higher price publicly
announced by SFX) in value per share, subject to adjustment as set forth in
the Merger Agreement, as calculated pursuant to the Merger Agreement, this
Agreement shall automatically terminate and be of no further force or effect.
Upon such termination, except for any rights any party may have in respect of
any breach by any other party of its obligations hereunder, none of the
parties hereto shall have any further obligation or liability hereunder.
(b) An amendment to the Merger Agreement shall be deemed to
be made in accordance with this Agreement if (i) approved by the Independent
Committee of MMR (ii) a fairness opinion is obtained from Oppenheimer & Co.,
Inc. and (iii) the consideration to be paid in the Merger to the holders of
the Class A Common Stock of the Company is not less than $12.00 (subject to
adjustment as set forth in the Merger Agreement) in value per share, as
calculated pursuant to the Merger Agreement, and the transaction is structured
as a tax-free reorganization.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SFX. SFX
represents and warrants to the Stockholders as follows: Each of this Agreement
and the Merger Agreement has been approved by the Board of Directors of SFX,
and the Merger Agreement has been approved by the Board of Directors of
Acquiror Sub and by SFX as the sole stockholder of Acquiror Sub, in each case
representing all necessary corporate action on the part of SFX and Acquiror
Sub (no action by the stockholders of SFX being required); except with respect
to the Merger Agreement, for the contemplated stockholder approvals described
therein. Each of this Agreement and the Merger Agreement has been duly
executed and delivered by a duly authorized officer of SFX and, in the case of
the Merger Agreement, Acquiror Sub. Each of this Agreement and the Merger
Agreement constitutes a valid and binding agreement of SFX and, in the case of
the Merger Agreement, Acquiror Sub, enforceable against SFX and, in the case
of the Merger Agreement, Acquiror Sub in accordance with its terms.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS. The Stockholders represent and warrant to SFX as follows: This
Agreement has been duly executed and delivered by each of the Stockholders and
constitutes the valid and binding agreement of the Stockholders, enforceable
against the Stockholders in accordance with its terms. The Shares are the only
voting securities of the Company owned (beneficially or of record) by the
Stockholders, and, except as provided in this Agreement, the Shares are not
subject to any voting trust, voting agreement or similar arrangement
whatsoever. The Shares are not held in discretionary accounts of clients of
the Stockholders. In addition to the Shares, the Stockholders currently own
(beneficially or of record) 141,496 Class A Warrants and 141,496 Class B
Warrants of MMR and 10,448 Unit Purchase Options. The Stockholders have no
present plan or intention to sell, exchange, transfer by gift, or otherwise
dispose of the Merger Shares. This Agreement was not solicited by any officer
or director of the Company or representative of the Company, acting in such
capacity.
SECTION 7. INDEMNITY. SFX agrees to indemnify and hold
harmless Stockholders, and all directors, officers, agents and other persons,
if any, who control such Stockholders within the meaning of Section 15 of the
Securities Act of 1933, from and against any and all liabilities, damages,
costs and expenses (including the fees of one counsel) which may arise or be
asserted against or may be incurred by such persons in their capacities as
stockholders of the Company, or other persons, if any, who control such
stockholders, from any claims, actions or proceedings arising out of this
Agreement or any of the transactions contemplated hereby.
-5-
<PAGE>
SECTION 8. MISCELLANEOUS. (a) Amendments, Waivers, Etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified or terminated except by an instrument in writing signed by SFX and
the Stockholders.
(b) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the parties and
their respective successors and assigns, including without limitation in the
case of any corporate party hereto any corporate successor by merger or
otherwise.
(c) Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement.
(d) Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such term to the other parties or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
applicable law, provided that in such event the parties shall negotiate in
good faith in an attempt to agree to another provision (in lieu of the term or
application held to be invalid or unenforceable) that will be valid and
enforceable and will carry out the parties' intentions hereunder.
(e) No Waiver. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
(f) Third Party Beneficiaries. Except for those persons for
whom indemnification is provided, this Agreement is not intended to be for the
benefit of and shall not be enforceable by any person or entity which is not a
party hereto.
(g) Governing Law. This Agreement is governed by and
construed in accordance with the laws of the State of Delaware (without regard
to conflict of laws principles).
(h) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together constitute an instrument. Each counterpart may consist
of a number of copies each signed by less that all, but together signed by
all, the parties hereto.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SFX BROADCASTING, INC.
By:\s\ Richard A. Liese
----------------------------------
Name: Richard A. Liese
--------------------------------
Title: Vice President
-------------------------------
J. MORTON DAVIS
\s\ J. Morton Davis
-------------------------------------
D.H. BLAIR INVESTMENT BANKING CORP.
By:\s\ Martin A. Bell
----------------------------------
Name: Martin A. Bell
--------------------------------
Title: Vice Chairman
-------------------------------
-7-
The undersigned hereby confirms that he intends to vote for the merger
transaction between Multi-Market Radio, Inc. and SFX Broadcasting, Inc. approved
by the Independent Committee and to vote against any competing transaction.
---------------------------------
Dated: April 11, 1996
--------------------------
FOR IMMEDIATE RELEASE FROM: MULTI-MARKET RADIO, INC.
150 East 58th Street
New York, NY 10155
212-407-9126
Contact: Cynthia A. Bond
MULTI-MARKET RADIO REPORTS SECOND QUARTER RESULTS
Broadcast Cash Flow up 37% Year-to-Date
NEW YORK, August 8, 1996 -- Multi-Market Radio, Inc. (NASDAQ: RDIOA) today
announced results for the second quarter ended June 30, 1996.
Net revenues for the second quarter decreased 3% to $5,317,326 from $5,453,708
in the second quarter of 1995. Broadcast cash flow (defined as net revenues
less station operating expenses) decreased 6% to $2,156,248 from $2,294,138.
Operating income for the second quarter of 1996 increased 11% reaching
$1,052,419 compared to $950,945 in the second quarter of 1995. Net (loss) in
the second quarter was ($3,832,194), or ($1.10) per share, resulting
principally from the non-recurring charges of ($3,612,939) primarily related
to the pending merger with SFX Broadcasting, compared to ($655,542), or
($0.19) per share for the comparable 1995 period. The weighted average
equivalent number of shares outstanding was 3,490,500 in 1996 and 3,490,000 in
1995.
Net revenues for the first six months of 1996 increased 40% reaching
$10,143,466 from $7,250,135 in the first six months of 1995, and broadcast
cash flow increased 37% to $3,889,752 from $2,835,829. In the first six months
of 1996, the Company reported operating income of $1,675,070 compared with
operating income of $893,087 in the first six months of 1995. Net (loss) for
the first six months before the loss on the extraordinary item which occurred
only in the 1995 period was ($6,591,091) or ($1.89) per common share,
resulting principally from non-recurring charges of ($5,653,511) primarily
related to the pending merger with SFX Broadcasting, compared to ($1,030,312)
or ($0.30) per common share for the 1995 period. The 1995 extraordinary item
relates to a loss from the early extinguishment of debt. The weighted average
equivalent number of common shares outstanding for the six months was
3,490,500 compared to 3,490,000 for the comparable period of 1995.
On a pro forma basis, excluding the results of all stations which the Company
has agreed to sell, the Company's net revenues for the second quarter 1996,
would have increased 8% reaching $4,860,314 and broadcast cash flow would have
increased 11% to $2,315,066 from second quarter 1995.
Commenting on the quarter's results, Michael G. Ferrel, President and Chief
Executive Officer said, "We are extremely gratified with this quarter's
station-to-station results. This is an excellent and
- more -
<PAGE>
well-managed group of stations in strong markets which will be a great
complement to SFX Broadcasting with whom we are merging. In anticipation of this
merger, which is scheduled to close within sixty days, we have disposed of
certain properties which no longer matched our high standards for upside
potential. As the summer progresses we continue to improve our station
performance while looking forward with great excitement to the approaching
merger."
In April 1996, SFX Broadcasting, Inc. (NASDAQ: SFXBA) announced that it would
acquire Multi-Market Radio for the stock equivalent of $11.50 per common
share, subject to adjustment. On July 30, this consideration was increased to
$12.00 per share. It is anticipated that this transaction will close within
the next two months subject to shareholder approval and the approval of the
Federal Communications Commission and certain other conditions. There can be
no assurance that the transaction will be consummated.
Multi-Market Radio, headquartered in New York City, currently owns, provides
programming for, sells advertising on behalf of or has agreed to acquire the
following thirteen stations in seven markets:
WKSS(FM) Hartford, CT***
WHMP(FM) Springfield/Northampton, MA
WPKX(FM) Springfield/Northampton, MA
WHMP-AM Springfield/Northampton, MA
WPLR(FM) New Haven, CT
WYBC(FM) New Haven, CT*
WGNE(FM) Daytona Beach, FL
WCHZ(FM) Augusta, GA*
WKNN(FM) Biloxi, MS
WMJY(FM) Biloxi, MS
WMYB(FM) Myrtle Beach, SC**
WVCO(FM) Myrtle Beach, SC**
WYAK(FM) Myrtle Beach, SC
* Joint Selling Agreement
** Local Marketing Agreement
*** Under contract to be acquired
In addition, the Company owns KOLL(FM) in Little Rock, AR, which is under
contract to be sold.
MULTI-MARKET RADIO, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
6/30/96 6/30/95 % CHANGE 6/30/96 6/30/95 % CHANGE
------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues .................................. $ 5,317,326 $ 5,453,708 -3% $10,143,466 $ 7,250,135 40%
Station operating expenses .................... 3,161,078 3,159,570 0% 6,253,714 4,414,306 42%
----------- ----------- ----------- -----------
Broadcast cash flow ........................... 2,156,248 2,294,138 -6% 3,889,752 2,835,829 37%
Depreciation & amortization expense ........... 386,162 667,345 -42% 809,679 966,087 -16%
Corporate general & administrative expenses ... 652,666 402,448 62% 1,275,003 623,255 105%
Other corporate expenses-non cash charge ...... 65,001 273,400 -76% 130,000 353,400 -63%
----------- ----------- ----------- -----------
Operating income .............................. 1,052,419 950,945 11% 1,675,070 893,087 88%
Interest expense .............................. (1,270,669) (1,538,192) -17% (2,609,084) (1,850,506) 41%
Loss on dispositions of radio stations, net ... (125,000) -- (1,595,996) --
Write-off of acquisition and financing costs .. (139,261) -- (708,837) --
Costs related to pending merger with
SFX Broadcasting ............................ (3,348,678) -- (3,348,678) --
Other expenses ................................ (1,005) (1,295) -22% (3,566) 107 -3,433%
----------- ----------- ----------- -----------
Loss before income taxes and extraordinary item (3,832,194) (588,542) 551% (6,591,091) (957,312) 588%
Provision for income taxes .................... -- 67,000 -100% -- 73,000 -100%
----------- ----------- ----------- -----------
Loss before extraordinary item ................ (3,832,194) (655,542) 485% (6,591,091) (1,030,312) 540%
Extraordinary loss-early extinguishment of debt -- -- -- (328,571) -100%
----------- ----------- ----------- -----------
Net loss ...................................... $(3,832,194) $ (655,542) 485% $(6,591,091) $(1,358,883) 385%
=========== =========== ==== =========== =========== ====
PER SHARE:
Loss before extraordinary item ................ $ (1.10) $ (0.19) $ (1.89) $ (0.30)
Extraordinary item ............................ -- -- -- (0.09)
----------- ----------- ----------- -----------
Net Loss ...................................... $ (1.10) $ (0.19) $ (1.89) $ (0.39)
=========== =========== =========== ===========
Weighted average shares outstanding ........... 3,490,500 3,490,000 3,490,500 3,490,000
</TABLE>
