-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GQtuBI61D++zIi2JJjMyl4i/7ecB6EsxQv0Js15krudj+ScojQlYHyUQgfx/JZvW IT2Lz3qx9p7e/wyu3IBIJA== 0000950134-96-002735.txt : 19960612 0000950134-96-002735.hdr.sgml : 19960612 ACCESSION NUMBER: 0000950134-96-002735 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 22 FILED AS OF DATE: 19960607 SROS: NYSE GROUP MEMBERS: CLEAR CHANNEL COMMUNICATIONS INC GROUP MEMBERS: CLEAR CHANNEL RADIO, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEFTEL BROADCASTING CORP CENTRAL INDEX KEY: 0000922503 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 990113417 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43975 FILM NUMBER: 96578048 BUSINESS ADDRESS: STREET 1: 6767 WEST TROPICANA AVE CITY: LAS VEGAS STATE: NV ZIP: 89603 BUSINESS PHONE: 7023673322 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEFTEL BROADCASTING CORP CENTRAL INDEX KEY: 0000922503 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 990113417 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-43975 FILM NUMBER: 96578049 BUSINESS ADDRESS: STREET 1: 6767 WEST TROPICANA AVE CITY: LAS VEGAS STATE: NV ZIP: 89603 BUSINESS PHONE: 7023673322 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CLEAR CHANNEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0000739708 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 741787539 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2108222828 MAIL ADDRESS: STREET 2: 200 CONCORD PLAZA SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CLEAR CHANNEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0000739708 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 741787539 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2108222828 MAIL ADDRESS: STREET 2: 200 CONCORD PLAZA SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 SC 14D1 1 COMBINED SCHEDULE 14D1 AND SCHEDULE 13D/A FILING 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- SCHEDULE 14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934 AND SCHEDULE 13D (Amendment No. 1) Under the Securities Exchange Act of 1934 HEFTEL BROADCASTING CORPORATION (Name of Subject Company) CLEAR CHANNEL RADIO, INC. CLEAR CHANNEL COMMUNICATIONS, INC. (Bidders) CLASS A COMMON STOCK, PAR VALUE $.001 PER SHARE (Title of Class of Securities) 422799106 (CUSIP Number of Class of Securities) ----------------------- L. LOWRY MAYS CLEAR CHANNEL COMMUNICATIONS, INC. 200 CONCORD PLAZA, SUITE 600 SAN ANTONIO, TEXAS 78216 (210) 822-2828 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Bidders) Copies to: STEPHEN C. MOUNT AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. 300 CONVENT STREET, SUITE 1500 SAN ANTONIO, TEXAS 78205 (210) 270-0800 ----------------------- JUNE 7, 1996 (Date of Event Which Requires Filing Amendent to Statement of Schedule 13D) CALCULATION OF FILING FEE ================================================================================ Transaction valuation* Amount of Filing Fee - -------------------------------------------------------------------------------- $109,747,950 $21,949.59 ================================================================================ * For purposes of calculating fee only. This amount assumes the purchase of 4,771,650 shares of Class A Common Stock of Heftel Broadcasting Corporation, at $23.00 in cash per share. The amount of the filing fee, 2 calculated in accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50 of one percentum of the value of the shares to be purchased. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: None Form or Registration No.: N/A Filing Party: N/A Date Filed: N/A 3 CUSIP No. 422799-10-6 14D-1 and 13D - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person CLEAR CHANNEL COMMUNICATIONS, INC. 74-1787539 - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions): (a) X -------- (b) -------- - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Sources of Funds (See Instructions) BK - ------------------------------------------------------------------------------- (5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f): [ ] - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Texas - ------------------------------------------------------------------------------- (7) Aggregate Amount Beneficially Owned by EACH REPORTING PERSON. 6,829,345 - ------------------------------------------------------------------------------- (8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) [ ] - ------------------------------------------------------------------------------- (9) Percent of Class Represented by Amount in Row (7) 63.0% - ------------------------------------------------------------------------------- (10) Type of Reporting Person (See Instructions) CO - ------------------------------------------------------------------------------- 3 4 CUSIP No. 422799-10-6 14D-1 and 13D - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person CLEAR CHANNEL RADIO, INC. 74-2722883 - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions): (a) X -------- (b) -------- - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Sources of Funds (See Instructions) AF - ------------------------------------------------------------------------------- (5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f): [ ] - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Nevada - ------------------------------------------------------------------------------- (7) Aggregate Amount Beneficially Owned by EACH REPORTING PERSON. 4,672,546 - ------------------------------------------------------------------------------- (8) Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) [ ] - ------------------------------------------------------------------------------- (9) Percent of Class Represented by Amount in Row (7) 43.1% - ------------------------------------------------------------------------------- (10) Type of Reporting Person (See Instructions) CO - ------------------------------------------------------------------------------- 4 5 Introduction This Tender Offer Statement on Schedule 14D-1 relates to the offer by Clear Channel Radio, Inc., a Nevada corporation (the "Purchaser"), to purchase any and all outstanding shares of Class A Common Stock, par value $.001 per share (the "Shares"), of Heftel Broadcasting Corporation, a Delaware corporation, at a price of $23.00 per Share net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively and which are incorporated herein by reference. Purchaser is an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas corporation ("Parent"). Item 1. Security and Subject Company. (a) The name of the subject company is Heftel Broadcasting Corporation, a Delaware corporation (the "Company"), which has its principal executive offices at 6767 West Tropicana Avenue, Las Vegas, Nevada 89103. (b) This Statement relates to the offer by Purchaser to purchase all outstanding Shares at a price of $23.00 per Share net to the Seller in cash. The information set forth in the INTRODUCTION and Section 1 ("Terms of the Offer") of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Price Range of the Shares; Dividends on the Shares") of the Offer to Purchase is incorporated herein by reference. Item 2. Identity and Background. (a)-(d) and (g) This Statement on Schedule 14D-1 is being filed by the Purchaser, a Nevada corporation and Parent, a Texas corporation. All of the persons listed in Schedule I of the Offer to Purchase are United States Citizens. The Purchaser is an indirect wholly-owned subsidiary of the Parent. The information set forth in the INTRODUCTION, Section 9 ("Certain Information Concerning the Purchaser and Parent") and Schedule I of the Offer to Purchase is incorporated herein by reference. 5 6 (e) During the last five years, neither of Parent or Purchaser, and, to the best of their knowledge, none of the persons listed in Schedule I of the Offer to Purchase has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (f) During the last five years, neither of Parent or Purchaser, and, to the best of their knowledge, none of the persons listed in Schedule I of the Offer to Purchase was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violations of such laws. Item 3. Past Contracts, Transactions or Negotiations with the Subject Company. (a) and (b) The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") and Section 11 ("Contacts with the Company; Background of the Offer") of the Offer to Purchase is herein incorporated by reference. Item 4. Source and Amount of Funds or Other Consideration. (a) and (b) The information set forth in Section 10 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder. (a)-(e) The information set forth in Section 12 ("Purpose of the Offer; The Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete") of the Offer to Purchase is incorporated herein by reference. (f) and (g) The information set forth in Section 7 ("Effect of the Offer on the Market for the Class A Common Stock, Stock Quotation and Exchange Act Registration") of the Offer to Purchase is incorporated herein by reference. Item 6. Interest in Securities of the Subject Company. (a)-(b) The information set forth in the INTRODUCTION, Section 9 ("Certain Information Concerning the Purchaser and Parent") and Section 12 ("Purpose of the Offer, The Tender Offer Agreement, 6 7 Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete") of the Offer to Purchase is incorporated herein by reference. Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to the Subject Company's Securities. The information set forth in the INTRODUCTION, Section 9 ("Certain Information Concerning the Purchaser and Parent"), Section 11 ("Contacts with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete") of the Offer to Purchase is incorporated herein by reference. Item 8. Persons Retained, Employed or to be Compensated. The information set forth in the INTRODUCTION and Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. Item 9. Financial Statements of Certain Bidders. The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated herein by reference. Item 10. Additional Information. (a) The information set forth in Section 11 ("Contacts with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete") of the Offer to Purchase is incorporated herein by reference. (b) and (c) The information set forth in Section 15 ("Certain Regulatory and Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 7 ("Effect of the Offer on the Market for the Class A Common Stock, Stock Quotation and Exchange Act Registration") of the Offer to Purchase is incorporated herein by reference. (e) None. (f) The information set forth in the Offer to Purchase, a copy of which is attached as Exhibit (a)(1) hereto, the Letter of Transmittal, a copy of which is attached as Exhibit (a)(2) hereto, the 7 8 Tender Offer Agreement between the Purchaser and the Company, a copy of which is attached as Exhibit (c)(1) hereto, the Stockholder Purchase Agreement, a copy of which is attached as Exhibit (c)(2) hereto, the Settlement Agreements, copies of which are attached as Exhibits (c)(5) and (c)(6) hereto and the Agreements Not to Compete, copies of which are attached as Exhibits (c)(3) and (c)(4) hereto, is incorporated in its entirety herein by reference. Item 11. Material to be Filed as Exhibits. 99(a)(1) . . . . . Offer to Purchase dated June 7, 1996. 99(a)(2) . . . . . Letter of Transmittal. 99(a)(3) . . . . . Notice of Guaranteed Delivery. 99(a)(4) . . . . . Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99(a)(5) . . . . . Letter to Clients from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99(a)(6) . . . . . Text of Press Release dated June 2, 1996. 99(a)(7) . . . . . Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 99(a)(8) . . . . . Summary Advertisement dated June 7, 1996. 99(b) . . . . . . Amended and Restated Credit Agreement dated as of October 19, 1995, among Parent, the Lenders from time to time party thereto, and NationsBank of Texas, N.A. 99(c)(1) . . . . . Tender Offer Agreement dated as of June 1, 1996 between the Purchaser and the Company. 99(c)(2) . . . . . Stockholder Purchase Agreement dated as of June 1, 1996 by and among the Purchaser and the stockholders of the Company listed on Exhibit A thereto. 99(c)(3) . . . . . Agreement Not to Compete dated as of June 1, 1996 by and between Cecil Heftel and the Company. 99(c)(4) . . . . . Agreement Not to Compete dated as of June 1, 1996 by and between the Company and Carl Parmer. 99(c)(5) . . . . . Settlement Agreement dated as of June 1, 1996 by and between the Company and Cecil Heftel. 99(c)(6) . . . . . Settlement Agreement dated as of June 1, 1996 by and between the Company and Carl Parmer. 99(c)(7) . . . . . Letter Agreement dated May 23, 1995 among the Company, Parent and Cecil Heftel. 99(c)(8) . . . . . Voting Rights Agreement dated May 23, 1995 of Cecil Heftel. 99(c)(9) . . . . . Amendment No. 1 to Tender Offer Agreement dated June 6, 1996. 99(c)(10) . . . . Letter Agreements of certain Selling Stockholders dated June 6, 1996 99(c)(11). . . . . Agreement to File Joint Statement on Schedule 13D 99(c)(12). . . . . Confidentiality Letter Agreement dated May 31, 1996 between the Purchaser and the Company 99(d)-(f) . . . . Not applicable. 8 9 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATED: June 7, 1996 CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ MARK P. MAYS ---------------------------------------- Name: Mark P. Mays ------------------------------------- Title: Senior Vice President/Operations ------------------------------------- CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------------------- Name: Mark P. Mays -------------------------------------- Title: Senior Vice President/Operations ------------------------------------- 9 10 EXHIBIT INDEX
Exhibit No. Seq. ----------- Page No. -------- 99(a)(1) Offer to Purchase dated June 7, 1996. 99(a)(2) Letter of Transmittal. 99(a)(3) Notice of Guaranteed Delivery. 99(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99(a)(5) Letter to Clients from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99(a)(6) Text of Press Release dated June 2, 1996. 99(a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 99(a)(8) Summary Advertisement dated June 7, 1996. 99(b) Amended and Restated Credit Agreement dated as of October 19, 1995, among Parent, the Lenders from time to time party thereto and NationsBank of Texas, N.A. 99(c)(1) Tender Offer Agreement dated as of June 1, 1996 between the Purchaser and the Company. 99(c)(2) Stockholder Purchase Agreement dated as of June 1, 1996 by and among the Purchaser and the stockholders of the Company listed on Exhibit A thereto. 99(c)(3) Agreement Not to Compete dated as of June 1, 1996 by and between Cecil Heftel and the Company. 99(c)(4) Agreement Not to Compete dated as of June 1, 1996 by and between the Company and Carl Parmer. 99(c)(5) Settlement Agreement dated as of June 1, 1996 by and between the Company and Cecil Heftel. 99(c)(6) Settlement Agreement dated as of June 1, 1996 by and between the Company and Carl Parmer. 99(c)(7) Letter Agreement dated May 23, 1995 among the Company, Parent and Cecil Heftel. 99(c)(8) Voting Rights Agreement dated May 23, 1995 of Cecil Heftel. 99(c)(9) Amendment No. 1 to Tender Offer Agreement dated June 6, 1996. 99(c)(10) Letter Agreements of certain selling stockholders dated June 6, 1996. 99(c)(11) Agreement to File Joint Statement on Schedule 13D dated June 6, 1996. 99(c)(12) Confidentiality Letter Agreement dated May 31, 1996 between the Purchaser and the Company. 99(d)-(f) Not applicable.
10 EX-99.(A)(1) 2 OFFER TO PURCHASE DATED JUNE 7, 1996 1 Offer to Purchase for Cash All Outstanding Shares of Class A and Class B Common Stock of HEFTEL BROADCASTING CORPORATION at $23.00 NET PER SHARE by CLEAR CHANNEL RADIO, INC. an indirect wholly-owned subsidiary of CLEAR CHANNEL COMMUNICATIONS, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED. ------------------------ THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING RECEIPT OF CERTAIN CONSENTS FROM THE FEDERAL COMMUNICATIONS COMMISSION (THE "FCC CONSENT") AND THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD APPLICABLE TO THE PURCHASER'S ACQUISITION OF SHARES UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"). SEE SECTION 14 OF THIS OFFER TO PURCHASE. ------------------------ THE OFFER IS BEING MADE PURSUANT TO A TENDER OFFER AGREEMENT BETWEEN THE PURCHASER AND HEFTEL BROADCASTING CORPORATION. ------------------------ IMPORTANT Any stockholder desiring to tender Shares should either (i) complete and sign the Letter of Transmittal or a facsimile thereof in accordance with the instructions in the Letter of Transmittal and deliver the Letter of Transmittal with the Shares and all other required documents to the Depositary or follow the procedure for book-entry transfer set forth in Section 3 of this Offer to Purchase or (ii) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. A stockholder having Shares registered in the name of a broker, commercial bank, trust company or other nominee must contact such person if the stockholder desires to tender those Shares. Any stockholder who desires to tender Shares and cannot deliver such Shares and all other required documents to the Depositary by the expiration of the Offer must tender such Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of this Offer to Purchase. Questions and requests for assistance or additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. ------------------------ The Dealer Manager for the Offer is: CS First Boston June 7, 1996. 2 TABLE OF CONTENTS
PAGE ---- INTRODUCTION.......................................................................... 1 1. Terms of the Offer............................................................... 2 2. Acceptance for Payment and Payment for Shares.................................... 4 3. Procedure for Tendering Shares................................................... 5 4. Withdrawal Rights................................................................ 7 5. Certain Federal Income Tax Consequences.......................................... 8 6. Price Range of the Class A Stock; Dividends on the Shares........................ 9 7. Effect of the Offer on the Market for the Class A Common Stock, Stock Quotation and Exchange Act Registration.................................................... 9 8. Certain Information Concerning the Company....................................... 10 9. Certain Information Concerning the Purchaser and Parent.......................... 11 10. Source and Amount of Funds....................................................... 13 11. Contacts with the Company; Background of the Offer............................... 14 12. Purpose of the Offer; The Tender Offer Agreement, Stock Purchase Agreement, Settlement Agreements and Agreements Not to Compete........................... 15 13. Dividends and Distributions...................................................... 25 14. Certain Conditions of the Offer.................................................. 25 15. Certain Regulatory and Legal Matters............................................. 26 16. Fees and Expenses................................................................ 28 17. Miscellaneous.................................................................... 29 Schedule I Directors and Executive Officers of Parent and the Purchaser.
3 TO THE HOLDERS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF HEFTEL BROADCASTING CORPORATION INTRODUCTION Clear Channel Radio, Inc., a Nevada corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas corporation ("Parent"), hereby offers to purchase all shares (the "Shares") of Class A Common Stock, par value $.001 per share (the "Class A Common Stock"), and Class B Common Stock, par value $.001 per share (the "Class B Common Stock" and together with the Class A Common Stock, the "Common Stock"), of Heftel Broadcasting Corporation, a Delaware corporation (the "Company"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). Tendering holders of Shares will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. The Purchaser will pay all charges and expenses of CS First Boston Corporation (the "Dealer Manager"), The Bank of New York (the "Depositary") and Morrow & Co., Inc. (the "Information Agent") in connection with the Offer. See Section 16. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING RECEIPT OF THE FCC CONSENT AND THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD APPLICABLE TO PURCHASER'S ACQUISITION OF SHARES UNDER THE HSR ACT. SEE SECTION 14. THE OFFER IS BEING MADE PURSUANT TO A TENDER OFFER AGREEMENT BETWEEN THE PURCHASER AND THE COMPANY. The Company has informed the Purchaser that, as of June 1, 1996, there were (a) 6,336,610 shares of Class A Common Stock issued and outstanding and 591,839 shares of Class A Common Stock reserved for issuance upon exercise of outstanding stock options, and (b) 3,769,176 shares of Class B Common Stock issued and outstanding and 850,106 shares of Class B Common Stock reserved for issuance upon exercise of outstanding warrants. The rights of the holders of Class A Common Stock and Class B Common Stock are identical, except that each share of Class B Common Stock generally entitles its holders to ten votes, whereas each share of Class A Common Stock entitles its holder to one vote. Each share of Class B Common Stock will convert automatically into one share of Class A Common Stock upon its purchase by the Purchaser. Parent presently owns 2,156,799 shares of Class A Common Stock, representing approximately 21.3% of the outstanding Shares (18.7% on a fully diluted basis). The Offer is being made pursuant to a Tender Offer Agreement dated June 1, 1996 between the Purchaser and the Company, as amended (the "Tender Offer Agreement"). Concurrently with the execution of the Tender Offer Agreement, the Purchaser also entered into a Stockholder Purchase Agreement dated June 1, 1996 (the "Stockholder Purchase Agreement") with certain stockholders of the Company (collectively, the "Selling Stockholders"), pursuant to which each of the Selling Stockholders agreed to sell, and the Purchaser agreed to purchase, all Shares owned by such Selling Stockholders at a price per Share equal to the Offer Price. The Selling Stockholders collectively own 160,000 shares of Class A Common Stock and 3,356,529 shares of Class B Common Stock, or a total of 3,516,529 shares of Common Stock, representing approximately 34.8% of the outstanding Shares. The Selling Stockholders also own options to acquire 349,339 Shares of Class A Common Stock and warrants to acquire 806,678 Shares of Class B Common Stock, and have agreed to tender the Shares issuable upon exercise of such options and warrants pursuant to the Offer. If the Purchaser is deemed the beneficial owner of all Shares subject to the Stockholder Agreement (including those issuable upon exercise of options and warrants), the Purchaser would beneficially own 6,829,345 Shares or 59.1% of the outstanding Shares on a fully diluted basis. 4 In December 1993, the Company entered into ten-year Employment Agreements with Cecil Heftel, the Chairman of the Board and Co-Chief Executive Officer of the Company, and Carl Parmer, the President and Co-Chief Executive Officer of the Company, under which each of them is entitled to receive a base annual salary of $500,000 and bonuses based on the performance of the Company. Under those Employment Agreements, if the Company terminates the employment of Mr. Heftel or Mr. Parmer without cause, he will be entitled to receive a lump sum payment equal to the present value of all amounts remaining to be paid by the Company to him under his Employment Agreement. For purposes of calculating future bonuses, the Company will be deemed to have achieved the performance level necessary to pay the maximum bonus. The Purchaser has informed Mr. Heftel and Mr. Parmer that it intends to cause the Company to terminate their employment, without cause, immediately following the purchase of Shares pursuant to the Stockholder Purchase Agreement. Concurrently with the execution of the Stockholder Purchase Agreement, Mr. Heftel and Mr. Parmer each entered into an Agreement Not to Compete (each, an "Agreement Not to Compete") and a Settlement Agreement (each, a "Settlement Agreement") with the Company. Pursuant to the respective Settlement Agreements, the employment by the Company of Mr. Heftel and Mr. Parmer will terminate immediately following the purchase of Shares pursuant to the Stockholder Purchase Agreement and the Company will pay Mr. Heftel $11,861,069 and Mr. Parmer $6,941,960 in exchange for releases by Mr. Heftel and Mr. Parmer from any claims resulting from termination of their respective Employment Agreements with the Company. Pursuant to the Agreements Not to Compete, the Company will pay Mr. Heftel $2,500,000 and Mr. Parmer $4,500,000 upon closing of the Stockholder Purchase Agreement in exchange for their respective agreements not to compete with the Company in certain specified markets for a period of five years from the date of closing of the Stockholder Purchase Agreement. The Purchaser has guaranteed the obligations of the Company under the Settlement Agreements and the Agreements Not to Compete. The total amount to be paid to each of Mr. Heftel and Mr. Parmer under his respective Settlement Agreement and Agreement Not to Compete does not exceed the present value of all amounts remaining to be paid to him by the Company under his respective Employment Agreement. The Tender Offer Agreement, Stockholder Purchase Agreement, Settlement Agreements and Agreements Not to Compete are described more fully in Section 12. All information contained herein concerning Parent and the Purchaser has been supplied by Parent or the Purchaser. All information contained herein respecting the Company has been supplied by the Company. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and thereby purchase any and all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 4. All Shares purchased pursuant to the Offer will be purchased at the Offer Price, net to the seller in cash. The term "Expiration Date" means 12:00 Midnight, New York City time, on Tuesday, July 16, 1996, unless the Purchaser shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING THE RECEIPT OF THE FCC CONSENT AND THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD APPLICABLE TO THE PURCHASER'S ACQUISITION OF SHARES UNDER THE HSR ACT. SEE SECTION 14. Pursuant to the Tender Offer Agreement, if prior to 12:00 Midnight, New York City time, on July 16, 1996, the number of Shares tendered in the Offer, when combined with the Shares of Class A Common Stock 2 5 owned by affiliates of the Purchaser, total 80% of the outstanding Shares of Common Stock, Purchaser shall publish notice of such fact and shall extend the Expiration Date by ten days. Pursuant to the Tender Offer Agreement, without the consent of the Company, the Purchaser may not (a) reduce the Offer Price, (b) amend or add to the conditions to the obligations of the Purchaser to purchase Shares pursuant to the Tender Offer Agreement, (c) change the number of shares of Common Stock subject to the Offer, (d) change the form of consideration payable in the Offer, (e) extend the Expiration Date for the Offer, except as provided in the immediately preceding sentence, or (f) terminate the Offer, except as provided in the Tender Offer Agreement. Subject to the terms of the Tender Offer Agreement and complying with any applicable rules and regulations of the Securities and Exchange Commission (the "Commission"), including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating to the obligation of the Purchaser to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer, the Purchaser expressly reserves the right, at any time and from time to time, upon the failure of any of the conditions specified in Section 14, to delay acceptance for payment of or payment for any Shares, regardless of whether the Shares were theretofore accepted for payment, or to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for, by giving oral or written notice of such delay in payment or termination to the Depositary. In addition, if by the Expiration Date any or all conditions of the Offer are not satisfied, the Purchaser reserves the right (i) subject to complying with any applicable rules and regulations of the Commission, including Rule 14e-1(c), to delay acceptance for payment of or payment for any Shares until satisfaction or waiver of the conditions to the Offer; (ii) with the consent of the Company, to extend the period during which the Offer is to remain open (but not beyond 12:00 midnight, New York City time, on October 30, 1996) and, subject to the rights of tendering stockholders to withdraw their Shares, retain all tendered Shares until the Expiration Date, or (iii) to waive any or all conditions of the Offer and, subject to complying with applicable rules and regulations of the Commission, accept for payment and purchase all validly tendered Shares and not extend the Offer. Any extension, waiver, amendment or termination of the Offer will be followed as promptly as practicable by public announcement. In the case of an extension, Rule 14e-1(d) under the Exchange Act requires that the announcement be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14d-4(d) under the Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the Offer be promptly disseminated to stockholders in a manner reasonably designed to inform stockholders of such change), and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will not have any obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 4. However, the ability of the Purchaser to delay the acceptance for payment of Shares or the payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-1 under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of such bidder's offer. The Purchaser shall not have any obligation to pay interest on the Offer Price for tendered Shares regardless of any extension of the Offer or any delay in making such payment. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the 3 6 Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, a minimum period of 10 business days is generally required to allow for adequate dissemination to stockholders. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of the Shares. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed by the Purchaser to record holders of Shares and will be furnished by the Purchaser to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment (and thereby purchase) and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 4 as promptly as practicable after the later of (1) the Expiration Date, (2) the satisfaction or waiver of the conditions set forth in Section 14, and (3) any date on or prior to October 30, 1996 until which the Purchaser has extended the Offer with the consent of the Company pursuant to the Tender Offer Agreement. For a description of the Purchaser's right to terminate the Offer and not accept for payment or pay for Shares or to delay acceptance for payment or payment for Shares, see Sections 12 and 14. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section 3, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined below), and (iii) any other documents required by the Letter of Transmittal. The per Share consideration paid to any stockholder pursuant to the Offer will be the highest per Share consideration paid to any other stockholder pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of such Shares for payment. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting such payment to tendering stockholders. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, then, without prejudice to the Purchaser's rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act, which requires that a tender offeror pay the consideration offered or return the tendered securities promptly after the termination or withdrawal of a tender offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 4 below. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR TENDERED SHARES BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. 4 7 If any tendered Shares are not purchased for any reason or if certificates are submitted for more Shares than are tendered, certificates for such Shares not purchased or tendered will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility, such Shares will be credited to an account maintained at the appropriate Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. 3. PROCEDURE FOR TENDERING SHARES Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure set forth below. In addition, either (i) certificates representing such Shares must be received by the Depositary or such Shares must be tendered pursuant to the procedure for book-entry transfer set forth below, and a Book-Entry Confirmation (as defined below) must be received by the Depositary, in each case prior to the Expiration Date, or (ii) the guaranteed delivery procedure set forth below must be complied with. No alternative, conditional or contingent tenders will be accepted. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Book-Entry Transfer. The Depositary will make a request to establish an account with respect to the Shares at each Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in a Book-Entry Transfer Facility's system may make book-entry delivery of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at a Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. Although delivery of Shares may be effected through book-entry at a Book-Entry Transfer Facility, prior to the Expiration Date, (i) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back of this Offer to Purchase or (ii) the guaranteed delivery procedures described below must be complied with. The confirmation of a book-entry transfer of Shares into the Depositary's account at a Book-Entry Transfer Facility as described above is referred to herein as a "Book-Entry Confirmation". The term "Agent's Message" means a message transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgement from the participant in such Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. Guarantee of Signatures. Signatures on the Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member or participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each of the foregoing constituting an "Eligible Institution"), unless the Shares tendered thereby are tendered (i) by a registered holder of Shares who has not completed either the box labeled "Special Delivery Instructions" or the box labeled "Special Payment Instructions" on the Letter of Transmittal or (ii) for the account of any Eligible Institution. If the certificates evidencing Shares are registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made, or delivered to, or certificates for unpurchased Shares are to be issued or returned to, a person other than the registered owner or owners, then the tendered certificates must be endorsed or accompanied by duly executed stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates or stock powers, with the signatures on the certificates or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 to the Letter of Transmittal. 5 8 Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or time will not permit all required documents to reach the Depositary prior to the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all of the following guaranteed delivery procedures are duly complied with: (i) the tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser herewith, is received by the Depositary, as provided below, prior to the Expiration Date; and (iii) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect thereto), together with a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), and any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other documents required by the Letter of Transmittal, are received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after (i) timely receipt by the Depositary of certificates for such Shares or a Book-Entry Confirmation with respect thereto, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with all required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Appointment. By executing a Letter of Transmittal as set forth above, the tendering stockholder will irrevocably appoint designees of the Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after June 1, 1996. All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon such acceptance for payment, all prior powers of attorney and proxies given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney and proxies may be given (and, if given, will not be deemed effective). The designees of the Purchaser will thereby be empowered to exercise voting and other rights with respect to such Shares or other securities or rights in respect of any annual, special or adjourned meeting of the Company's stockholders, or otherwise, as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise voting and other rights with respect to such Shares and other securities or rights, including voting at any meeting of stockholders then scheduled. BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE 6 9 FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. If a stockholder does not provide its correct TIN or fails to provide the certifications described above, the Internal Revenue Service ("IRS") may impose a penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 31%. All stockholders surrendering Shares pursuant to the Offer should complete and sign the main signature box and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary). Foreign stockholders should complete and sign the main signature box and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See Instruction 8 to the Letter of Transmittal. Determination of Validity. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, and its determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any or all tenders of any Shares that are determined by it not to be in proper form or the acceptance of or payment for which may, in the opinion of the Purchaser, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any Shares. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Instructions to the Letter of Transmittal) will be final and binding on all parties. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Purchaser shall determine. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Tender Constitutes an Agreement. The tender of Shares pursuant to any one of the procedures described above will constitute an agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer. 4. WITHDRAWAL RIGHTS Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn at any time after August 5, 1996 unless theretofore accepted for payment as provided in this Offer to Purchase. If the Purchaser is delayed in accepting for payment or paying for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may, on behalf of the Purchaser retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 4, subject to Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of security holders promptly after the termination or withdrawal of such bidder's offer. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name in which the certificates representing such Shares are registered, if different from that of the person who tendered the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 3, any notice of withdrawal must also specify the name and number of the account at the applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's procedures. All questions as to the form and 7 10 validity (including time of receipt) of notices of withdrawal will be determined by the Company, in its sole discretion, and its determination will be final and binding on all parties. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer, but may be retendered at any subsequent time prior to the Expiration Date by following any of the procedures described in Section 3. 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion briefly summarizes certain of the principal Federal income tax consequences associated with the Offer. The discussion is applicable only to a stockholder of the Company who (i) is a citizen or resident of the United States or a corporation, partnership or other entity created or organized in or under the laws of the United States and (ii) holds such Shares as capital assets. In particular, the following discussion does not address the potential tax consequences applicable to stockholders (i) who have received Shares pursuant to the exercise of employee stock options or otherwise as compensation, (ii) who are dealers in securities, or (iii) who are subject to special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code") (including non-U.S. persons, life insurance companies, tax-exempt organizations and financial institutions). Furthermore, the following discussion does not consider any state, local or foreign tax consequences of the Offer. Sales of Shares pursuant to the Offer will be taxable transactions for Federal income tax purposes under the Code, and may also be taxable transactions under applicable state, local, foreign and other tax laws. For Federal income tax purposes, a tendering stockholder will generally recognize gain or loss equal to the difference between the amount of cash received by the stockholder pursuant to the Offer and the aggregate tax basis in the Shares tendered by the stockholder and purchased pursuant to the Offer. Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer. If tendered Shares are held by a tendering stockholder as capital assets, gain or loss recognized by the tendering stockholder will be capital gain or loss, which will be long-term capital gain or loss if the tendering stockholder's holding period for the Shares exceeds one year. Under present law, long-term capital gains recognized by a tendering individual stockholder will generally be taxed at a maximum Federal marginal tax rate of 28%. A stockholder (other than certain exempt stockholders including, among others, all corporations and certain foreign individuals) that tenders Shares may be subject to 31% backup withholding unless the stockholder provides its TIN and certifies that such number is correct or properly certifies that it is awaiting a TIN. A stockholder that does not furnish its TIN may be subject to a penalty imposed by the IRS. Each stockholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding. If backup withholding applies to a stockholder, the Depositary is required to withhold 31% from payments to such stockholder. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER. 8 11 6. PRICE RANGE OF THE CLASS A STOCK; DIVIDENDS ON THE SHARES The Company's Class A Common Stock is traded in the over-the-counter market, and prices for the Shares of Class A Common Stock are quoted on The Nasdaq National Market under the symbol "HBCCA." The following table sets forth for each of the fiscal quarters since July 27, 1994 (the date on which the Company completed its initial public offering) the high and low closing sale prices per share as reported on The Nasdaq National Market.
HIGH LOW ---- ---- FISCAL YEAR 1994: Fourth Quarter...................................................... $14 1/8 $ 9 3/4 FISCAL YEAR 1995: First Quarter....................................................... 16 9 1/2 Second Quarter...................................................... 13 7/8 10 Third Quarter....................................................... 15 3/4 10 1/8 Fourth Quarter...................................................... 21 3/4 15 1/4 FISCAL YEAR 1996: First Quarter....................................................... 20 14 3/4 Second Quarter...................................................... 21 15 1/4 Third Quarter (through June 6, 1996)................................ 27 3/8 19 1/4
On May 31, 1996, the last full day of trading prior to the announcement of the execution of the Tender Offer Agreement, the closing price per Share of Class A Common Stock as reported on The Nasdaq National Market was $22.50. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES OF CLASS A COMMON STOCK. The Company's Class B Common Stock is not publicly traded. The Company has not paid any dividends on the Class A or Class B Common Stock since October 1, 1993, and the Tender Offer Agreement prohibits the Company from paying any dividends. 7. EFFECT OF THE OFFER ON THE MARKET FOR THE CLASS A COMMON STOCK, STOCK QUOTATION AND EXCHANGE ACT REGISTRATION The purchase of Shares of Class A Common Stock pursuant to the Offer will reduce the number of Shares of Class A Common Stock that might otherwise trade publicly and the number of holders of Shares of Class A Common Stock and could adversely affect the liquidity and market value of the remaining Shares of Class A Common Stock held by stockholders. Depending upon the number of Shares of Class A Common Stock purchased pursuant to the Offer, the Shares of Class A Common Stock may no longer meet the requirements of the National Association of Securities Dealers, Inc. ("NASD") for continued quotation on The Nasdaq National Market System. In general, in order for an issue to be quoted on The Nasdaq National Market System such issue must have at least 200,000 publicly held shares held by at least 400 stockholders or 300 stockholders of round lots, with a market value of at least $1 million. If these standards were not met, quotations might continue to be published through Nasdaq other than on the National Market System, but if the number of holders of the Shares were to fall below 300, or if the number of publicly held Shares of Class A Common Stock were to fall below 100,000, or if the bid price per Share of Class A Common Stock were to fall below $1.00 and certain other conditions were not met, or if there were not at least two market makers for the Shares of Class A Common Stock, such Shares would no longer be "qualified" for Nasdaq reporting. Nasdaq qualification rules provide that Shares of Class A Common Stock held directly or indirectly by officers, directors or beneficial owners of more than 10% of the Shares of Class A Common Stock will not be considered as being publicly held. If, as a result of the purchase of Shares of Class A Common Stock, pursuant to the Offer, such Shares no longer meet the requirements of the NASD for continued quotation through Nasdaq and such Shares are no longer included in Nasdaq, the market for the Shares could be adversely affected. 9 12 If, as a result of the purchase of Shares pursuant to the Offer, the Shares of Class A Common Stock no longer meet the requirements of the NASD for quotation through Nasdaq and the Shares of Class A Common Stock are no longer included in Nasdaq, it is possible that the Shares of Class A Common Stock would continue to trade in the local over-the-counter market and that price quotations would be reported by other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of stockholders remaining at the time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act, as described below, and other factors. The Shares of Class A Common Stock are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System, which has the effect, among other things, of allowing brokers to extend credit on the collateral of such securities. Depending upon factors similar to those described above with respect to market quotations, it is possible that the Shares of Class A Common Stock would no longer constitute "margin securities" for the purposes of the margin regulations of the Board of Governors of the Federal Reserve System and, therefore, could no longer be used as collateral for loans made by brokers. Registration of the Shares of Class A Common Stock under the Exchange Act may be terminated upon application of the Company to the Commission if there are fewer than 300 record holders of the Shares of Class A Common Stock. According to the Company's transfer agent, as of June 1, 1996, there were 53 holders of record of Shares of Class A Common Stock. This number does not include beneficial owners who own Shares through a deposit agreement or similar arrangement and who are included under the rules of the Commission in determining record holders for purposes of the Exchange Act registration requirements. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) and the requirement of furnishing a proxy statement in connection with stockholders' meetings pursuant to Section 14(a), no longer applicable to the Company. If registration of the Shares under the Exchange Act were terminated, the Shares of Class A Common Stock would no longer be "margin securities" or be eligible for reporting on The Nasdaq National Market. Pursuant to the Tender Offer Agreement, the Purchaser has agreed for a period of one year from and after the closing of the Tender Offer Agreement to use its best efforts to cause the Shares of Class A Common Stock to remain listed or quoted on a recognized national exchange or NASD quotation system. The Purchaser cannot predict the number of Shares of Class A Common Stock that may be tendered in the Offer. If few Shares of Class A Common Stock are tendered, the public float will not be materially adversely affected. However, if a substantial portion of the Shares of Class A Common Stock is tendered in the Offer and purchased by the Purchaser, there may be no viable public market for the Shares and the Class A Common Stock may cease to be quoted on Nasdaq notwithstanding the Purchaser's agreement to use its best efforts to continue such quotation. 8. CERTAIN INFORMATION CONCERNING THE COMPANY The Company is a Delaware corporation with its principal offices at 6767 West Tropicana Avenue, Las Vegas, Nevada 89103. The Company is the largest Spanish language radio broadcasting company in the United States. The Company currently owns 17 radio stations in six markets, 15 of which are located in Los Angeles, New York, Miami, Chicago, and Dallas/Ft. Worth, which are five of the ten largest Hispanic markets in the United States. The Company's two Los Angeles stations, four Miami stations and six Dallas/Ft. Worth stations are the number one ranked billing Spanish language radio station combinations in their respective markets. The Company also owns Cadena Radio Centro ("CRC"), the largest Spanish radio network in the United States, with approximately 75 radio station affiliates in 50 cities. CRC enables the Company to extend its reach into additional Hispanic markets where the Company does not presently own stations. Set forth below is certain selected consolidated financial information with respect to the Company and its subsidiaries excerpted from the information contained in the Company's Annual Report on Form 10-K for the 10 13 year ended September 30, 1995 and its Quarterly Report on Form 10-Q for the three months ended March 31, 1996. The following summary is qualified in its entirety by reference to the Form 10-K and 10-Q and all the financial information (including related notes) contained therein. HEFTEL BROADCASTING CORPORATION AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) STATEMENT OF OPERATIONS DATA:
YEAR ENDED SIX MONTHS ENDED SEPTEMBER 30, MARCH 31, ------------------- ------------------- 1994(1) 1995 1995 1996 ------- ------- ------- ------- Total net revenues.......................... $27,729 $68,218 $31,021 $34,614 Total operating expenses.................... 21,286 56,271 26,790 29,721 Operating income............................ 6,443 11,947 4,232 4,892 Net income (loss)........................... 466 3,693 520 (113) Net income (loss) per common and common equivalent share.......................... .05 .34 .04 (.01)
BALANCE SHEET DATA:
AT SEPTEMBER 30, --------------------- AT MARCH 31, 1994 1995 1996 -------- -------- --------------- Working capital.............................. $ 18,366 $ 14,967 $ 10,920 Total assets................................. 113,353 151,637 188,766 Long-term debt, less current portion......... 58,472 95,937 121,867 Stockholders' equity......................... 44,436 43,581 44,133
- --------------- (1) During August 1994, the Company completed three separate business acquisitions and began consolidating a previously unconsolidated investment in a joint venture. Total net revenues and net income (loss), adjusted for interest expense on retired debt, relating to these acquisitions and transaction from the respective dates of these transactions to September 30, 1994 was approximately $5,488,000 and $(80,000), respectively. The Company is subject to the information requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options and other matters, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such information should be obtainable, by mail, upon payment of the Commission's customary charges, by writing to the Commission's principal office at 450 Fifth Street, N.W., Washington, DC 20549. Such material should also be available for inspection at the offices of the NASD, 1735 K Street, N.W., Washington, D.C. 20006. 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT Parent, which is a Texas corporation, is a diversified broadcasting company that currently owns or operates 72 radio stations and 16 television stations in 27 domestic markets. In addition, Parent owns a 50% 11 14 equity interest in the Australian Radio Network Pty. Ltd., which operates eight radio stations in Australia. Parent currently has acquisitions pending for 33 radio stations, including nine stations the Parent currently operates under Local Marketing Agreements or Joint Sales Agreements, and one television station in 14 domestic markets, in addition to the proposed acquisition of the stations owned by the Company. If the proposed acquisitions are completed, including the consummation of the Offer and the Stockholder Purchase Agreement, Parent would own and operate 44 AM and 68 FM radio stations and 17 television stations in 37 domestic markets. The Purchaser, which is an indirect wholly-owned subsidiary of Parent, is a Nevada corporation that was incorporated in 1993 and holds certain broadcast assets of the majority of the Parent's domestic radio stations. The principal offices of Parent and the Purchaser are located at 200 Concord Plaza, Suite 600, San Antonio, Texas 78216-6940. Set forth below is certain selected consolidated financial information with respect to Parent and its subsidiaries excerpted or derived from the information contained in Parent's Annual Report on Form 10-K for the year ended December 31, 1995 and Parent's Quarterly Report on Form 10-Q for the three months ended March 31, 1996. More comprehensive financial information is included in such reports and other documents filed by Parent with the Commission, and the following summary is qualified in its entirety by reference to such reports and other documents and all the financial information (including any related notes) contained therein. Such reports and documents should be available for inspection and copying in the manner described below. CLEAR CHANNEL COMMUNICATIONS, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, MARCH 31, --------------------------------------------------- ------------------- 1991 1992 1993 1994 1995 1995 1996 ------- -------- -------- -------- -------- --------- ------- STATEMENT OF OPERATIONS DATA(1): Net broadcasting revenue............................... $64,384 $ 82,205 $118,183 $173,109 $243,813 $ 51,858 $62,209 Station operating expenses............................. 44,981 53,532 75,990 100,437 131,258 33,182 38,230 Depreciation and amortization.......................... 7,641 12,253 17,447 24,668 33,770 8,399 8,755 ------- -------- -------- -------- -------- -------- ------- Station operating income.............................. 11,762 16,420 24,746 48,004 78,785 10,277 15,224 Corporate expenses..................................... 2,403 2,890 3,464 5,100 7,414 1,531 1,674 ------- -------- -------- -------- -------- -------- ------- Operating income...................................... 9,359 13,530 21,282 42,904 71,371 8,746 13,550 Interest expense....................................... (5,371) (4,739) (5,390) (7,669) (20,751) (4,448) (5,424) Other income (expense)................................. (1,483) (1,217) (196) 1,161 (803) 259 205 Equity in net income of, and other income from, nonconsolidated affiliates............................ -- -- -- -- 2,927 -- 875 ------- -------- -------- -------- -------- -------- ------- Income before income taxes............................. 2,505 7,574 15,696 36,396 52,744 4,557 9,206 Income taxes.......................................... 1,379 3,281 6,573 14,387 20,730 1,878 2,968 ------- -------- -------- -------- -------- -------- ------- Net income............................................ $ 1,126 $ 4,293 $ 9,123 $ 22,009 $ 32,014 $ 2,679 $ 6,238 ======= ======== ======== ======== ======== ======== ======= Net income per common share........................... $ .04 $ .14 $ .29 $ .63 $ .91 $ .08 $ .18 ======= ======== ======== ======== ======== ======== =======
AT DECEMBER 31, --------------------------------------------------- MARCH 31, 1991 1992 1993 1994 1995 1996 ------- -------- -------- -------- -------- --------- BALANCE SHEET DATA: Cash and cash equivalents.............................. $ 3,765 $ 2,790 $ 5,517 $ 6,818 $ 5,391 $ 12,006 Total assets........................................... 92,450 146,993 227,577 411,594 563,011 594,979 Long-term debt, net of current maturities.............. 48,110 97,000 87,815 238,204 334,164 366,569 Shareholders' equity................................... 24,787 31,055 98,343 130,533 163,713 170,272
- --------------- (1) The comparability of results of operations is affected by acquisitions consummated in certain of the periods presented. 12 15 On May 24, 1995, Parent purchased 2,156,799 shares of the Class A Common Stock from Grupo Radio Centro, S.A. de C.V. in a private transaction for $20,489,590.50 in cash, or $9.50 per share. In connection with the purchase of such shares, Parent entered into certain agreements with the Company and Cecil Heftel (the "May 1995 Agreements") pursuant to which Cecil Heftel has agreed to vote shares of the Common Stock covering 16% of the voting power of the Company in accordance with the written instructions of Parent as long as Parent holds 19.5% of the economic interest in the Company. In addition, pursuant to the May 1995 Agreements, the Company granted Parent certain demand and piggyback registration rights with respect to the 2,156,799 shares of Class A Common Stock purchased by Parent in May 1995. Parent has exercised such demand rights and the Company has registered of such shares under the Securities Act of 1933, as amended. The May 1995 Agreements also included a "standstill" agreement under which Parent agreed with the Company not to acquire additional Shares of the Company which, combined with Parent's other holdings, would exceed 35% of the economic interest in the Company or an interest in debt issued by the Company without the written consent of the Company, which consent may be withheld at the sole discretion of the Company. In connection with the Tender Offer Agreement and the Stockholder Purchase Agreement, the Company waived the provisions of the standstill agreement. The name, citizenship, business address, present principal occupation and five-year employment history of each of the directors and executive officers of Parent and the Purchaser are set forth in Schedule I. Except as set forth in this Offer to Purchase: (i) neither the Purchaser nor Parent, nor, to the best knowledge of the Purchaser and Parent, any of the persons listed in Schedule I nor any associate or majority-owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any equity securities of the Company; (ii) neither the Purchaser nor Parent, nor, to the best knowledge of the Purchaser and Parent, any of the persons or entities referred to above, nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in such equity securities during the past 60 days; (iii) neither the Purchaser nor Parent, nor, to the best knowledge of the Purchaser and Parent, any of the persons listed in Schedule I has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against lost or the giving or withholding of proxies, consents or authorizations; (iv) there have been no contacts, negotiations or transactions since October 1, 1992 between Parent or the Purchaser, or, to the best knowledge of the Purchaser and Parent, any of the persons listed in Schedule I, on the one hand, and the Company or its executive officers, directors or affiliates on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets of the Company; and (v) neither the Purchaser nor Parent, nor, to the best knowledge of the Purchaser and Parent, any of the persons listed in Schedule I, has since October 1, 1992 had any transaction with the Company or any of its executive officers, directors or affiliates that would require disclosure under the rules and regulations of the Commission applicable to the Offer. Parent is subject to the information requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. Information as of particular dates concerning Parent's officers and directors, their remuneration, stock options and other matters, the principal holders of Parent's securities and any material interest of such persons in transactions with Parent is required to be disclosed in proxy statements distributed to Parent's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection and copying at the Commission's offices in the manner described in Section 8. Such material should also be available for inspection at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. 10. SOURCE AND AMOUNT OF FUNDS Parent and the Purchaser estimate that the amount of funds required (i) to purchase all outstanding Shares pursuant to the Offer will be approximately $135,111,000; (ii) to purchase the Shares and shares of the Company's Series A Preferred Stock pursuant to the Stockholder Purchase Agreement will be approximately 13 16 $81,216,000; (iii) to make payments pursuant to the Settlement Agreements and Agreements Not to Compete will be approximately $25,800,000; and (iv) to pay related fees and expenses will be approximately $300,000. The total amount of funds required by the Purchaser in connection with the above-referenced transactions is estimated to be approximately $242,427,000. The Purchaser plans to obtain all funds needed for the foregoing through a capital contribution that will be made by Parent to the Purchaser. Parent plans to obtain the necessary funds through borrowings under its revolving credit facility with a group of banks (the "Credit Facility"). The Credit Facility currently permits borrowings of up to $600 million and will need to be amended to provide financing for the above-referenced transactions. Parent has been advised by the lead bank under the Credit Facility that the lead bank agrees with expanding the Credit Facility to $1.0 billion, on terms that will not be substantially less favorable than the terms of the existing Credit Facility. There can be no assurance that Parent will be successful in increasing the size of the existing Credit Facility on such terms. The Purchaser has not conditioned the Offer on obtaining such financing. Parent has drawn on the Credit Facility to finance various past acquisitions. Borrowings under the Credit Facility currently bear interest at a floating rate based on LIBOR plus 0.43%. Upon repayment of borrowings under the Credit Facility, the amount repaid will become immediately available to Parent for re-borrowing, subject to certain conditions. Substantially all of the assets of Parent are pledged to secure the payment by Parent of its indebtedness under the Credit Facility. The Credit Facility contains certain financial and operational covenants and other restrictions with which Parent must comply, including limitations on capital expenditures, the incurrence of additional indebtedness, payment of cash dividends, and requirements to maintain certain financial ratios. The Credit Facility matures in September 2003. The Credit Agreement has been filed as an exhibit to the Schedule 14D-1 of the Purchaser and Parent, and when the definitive amendment has been executed, it will be filed as an exhibit to the Schedule 14D-1. Reference is made to such exhibits for a more complete description of the terms of such documents. 11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER In the Fall of 1995, Mr. L. Lowry Mays, President and Chief Executive Officer of Parent, informally inquired of Cecil Heftel whether the Company would have any interest in a possible acquisition by Parent. Mr. Heftel informed Mr. Mays that the Company was not interested in an acquisition at that time, and Parent did not pursue the matter further. In February 1996, representatives of Alex. Brown & Sons Incorporated, an investment banking firm retained by the Company ("Alex Brown"), contacted Parent to determine whether Parent had any interest in pursuing a possible business combination with or acquisition of the Company and forwarded to Parent a form of confidentiality agreement that contained various "standstill" and other restrictive provisions. Parent refused to enter into the confidentiality agreement and informed Alex Brown that it was not interested in pursuing a transaction at that time on such terms. On the morning of May 29, 1996, Mr. Randall T. Mays, Vice President and Treasurer of Parent, telephoned Mr. Carl Parmer, Co-Chief Executive Officer and President of the Company, and offered, on behalf of Parent or a subsidiary of Parent, to purchase the Shares of Common Stock held by Mr. Parmer, Cecil Heftel and the members of Cecil Heftel's family at $23.00 per Share and to make a tender offer for the remaining Shares of the Common Stock at $23.00 per Share. For the remainder of such day, Parent and its counsel had numerous telephone calls with the Company and its counsel with respect to the structure of the transaction proposed by Parent. On May 30, 1996, discussions between the Company and Parent and their respective counsel continued, and counsel for the Company delivered to Parent a draft of a proposed Tender Offer Agreement. Parent and its legal counsel also commenced discussions on May 30, 1996, with representatives of the Selling Stockholders and their counsel. On May 30 and 31, 1996, the Company, Parent, representatives of the Selling Stockholders and their respective counsel had conference calls in which certain terms of the proposed Tender Offer Agreement, Stockholder Purchase Agreement, Settlement Agreements and Agreements Not to Compete were negotiated and resolved. On May 31, 1996, the Purchaser entered into a Confidentiality Agreement with the Company. 14 17 In the afternoon of May 31, 1996, the Company informed Parent that the Board of Directors of the Company had held a meeting and unanimously approved the foregoing agreements. On May 31, 1996, the boards of directors of Parent and the Purchaser held a joint telephonic meeting, and after review of the transaction with senior management, the boards of directors of the Purchaser and Parent approved the Tender Offer Agreement, Stockholder Purchase Agreement, Settlement Agreements and Agreements Not to Compete, all subject to further negotiation by senior management. On June 1, 1996, the Purchaser and the Company entered into the Tender Offer Agreement, the Purchaser and the Selling Stockholders entered into the Stockholder Purchase Agreement and Messrs. Heftel and Parmer entered into their respective Settlement Agreements and Agreements Not to Compete with the Company and the Purchaser. On several occasions during the following days, representatives of the Purchaser and the Company discussed the possible composition of the Company's Board of Directors following the closing of the Offer and Stockholder Purchaser Agreement but did not reach an agreement with respect to such matter. On June 6, 1996, the Purchaser and the Company entered into an Amendment No. 1 to the Tender Offer Agreement, which Amendment (a) provides for the treatment of options and warrants as described elsewhere in this Offer to Purchase, rather than cancellation and payment for such options and warrants upon the closing of the Offer, (b) provides that upon the closing of the Offer the Purchaser shall guarantee that the Company will pay the investment banking firm fees and expenses incurred by the Company in connection with the Offer and related transactions (including by loaning funds to the Company if necessary), rather than pay such fees and expenses directly, and (c) waives the Company's requirement that the Company file its Schedule 14D-9 on June 7, 1996. On June 6, 1996, the Selling Stockholders who own options or warrants also consented to the treatment of their options and warrants as provided in Amendment No. 1 to the Tender Offer Agreement. 12. PURPOSE OF THE OFFER; THE TENDER OFFER AGREEMENT, STOCKHOLDER PURCHASE AGREEMENT, SETTLEMENT AGREEMENTS AND AGREEMENTS NOT TO COMPETE The purpose of the Offer and the Stockholder Purchase Agreement is to acquire control of the Company. The purpose of the Offer is to provide all stockholders of the Company who are not party to the Stockholder Purchase Agreement the opportunity to sell their Shares at the same price at which the Selling Stockholders are selling their Shares. TENDER OFFER AGREEMENT. The following is a summary of certain provisions of the Tender Offer Agreement, a copy of which is filed as an Exhibit to the Schedule 14D-1 filed by the Purchaser and Parent with the Commission. Such summary is qualified in its entirety by reference to the Tender Offer Agreement. The Offer. The Tender Offer Agreement provides for the making of the Offer and requires that the Offer shall remain open for 40 days; provided, however, if at any time prior to the end of such 40 day period, Shares of Common Stock are tendered to the Purchaser which when combined with the Shares of Class A Common Stock owned by affiliates of the Purchaser total 80% of the outstanding Shares of Common Stock, the Purchaser shall publish notice of such fact and shall extend the Expiration Date by ten days. The Tender Offer Agreement provides that unless sooner terminated in accordance with its terms, the closing of the transactions contemplated by the Tender Offer Agreement (the "Closing") shall occur on the first business day (the "Closing Date") after satisfaction or waiver of the conditions set forth in the next succeeding paragraph. The obligation of the Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction or waiver of the following conditions: (i) the expiration or termination of the applicable waiting period under the HSR Act ; (ii) the FCC Consent (as defined below) becoming a Final Order (as defined below), or if the primary lenders for Purchaser do not require that the FCC Consent become a Final Order to consummate the Closing, then the granting of the FCC Consent and the giving of public notice of such fact; (iii) no temporary restraining order, preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a government, regulatory or 15 18 administrative agency or commission shall be in effect which restrains or prohibits the transactions contemplated by the Tender Offer Agreement; and (iv) that all representations and warranties of the Company contained in the Tender Offer Agreement shall be true and correct in all material respects at and as of the Closing Date (except those representations and warranties which address matters only as of a particular date shall remain true and correct in all material respects as of such date) and the Company shall have performed in all material respects all agreements and covenants required to be performed by it pursuant to the Tender Offer Agreement prior to or at the Closing Date. Pursuant to the Tender Offer Agreement, the Purchaser reserves the right to modify the Offer except that the Purchaser has agreed that, without the written consent of the Company, no change in the Offer may be made which: (i) reduces the Offer Price, (ii) amends or adds to the conditions to the obligations of the Purchaser as set forth above, (iii) changes the number of shares of the Company subject to the Offer, (iv) changes the form of consideration payable in the Offer, (v) extends the Expiration Date, except as set forth in the Tender Offer Agreement, or (vi) terminates the Offer, except as set forth in the Tender Offer Agreement. Stock Options and Warrants. The Tender Offer Agreement provides that each option to purchase Class A Common Stock of the Company or each warrant to purchase Class B Common Stock of the Company (collectively, the "Convertible Securities" and individually, a "Convertible Security") if not exercised before the Closing Date and upon condition that the Purchaser receives any consent of the security holder necessary to effectuation, will be deemed exercised on the Closing Date and the shares underlying such Convertible Securities will be deemed to have been tendered in the Offer and accepted by the Purchaser, and, in settlement of any such tenders so accepted, the Purchaser on the Closing Date shall pay to the Company, an amount equal to the aggregate of the exercise prices of the Convertible Securities so exercised and, to each holder of any such Convertible Security whose tender is accepted, an amount equal to (x) the product of (i) the Offer Price minus the exercise price per share of the Convertible Security and (ii) the total number of shares of Company Common Stock for which such Convertible Security has been exercised and which have been purchased by the Purchaser on the Closing Date less (y) any federal, state, local or foreign taxes required to be withheld from such payment. The Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt such resolutions or take such other actions as are necessary, subject to obtaining any applicable security holder consent, to implement the terms and conditions of the prior sentence, including, without limitation, accelerating the vesting and exercisability of all Convertible Securities to the Closing Date; provided, however, that the vesting and exercisability of a Convertible Security shall not be accelerated if the holder of the Convertible Security does not deliver the applicable holder consent. The Tender Offer Agreement also provides that the Company and the subsidiaries of the Company shall take such action as may be permitted under the Company's Stock Option Plan and/or the terms of the Convertible Securities to effect the exercise of the Convertible Securities on the Closing Date and shall comply with all requirements regarding income tax withholding in connection therewith. In addition to the foregoing, the Company and the subsidiaries of the Company shall take such action as may be permitted under the Company's Stock Option Plan and/or the terms of the Convertible Securities to accelerate the vesting of the right to purchase all shares of Class A Common Stock subject to options included in the Convertible Securities on the Closing Date and shall comply with all requirements regarding income tax withholding in connection with accelerating the vesting of such rights. The Tender Offer Agreement also provides that the Company will use its best efforts to obtain the security holder consents referred to above and to provide the Purchaser with such other evidence requested by the Purchaser that no holder of any Convertible Security will have any right to acquire any equity interest in the Company, the Purchaser or any of their respective subsidiaries as a result of the exercise or conversion of any Convertible Security or other rights after the Closing Date. Representation and Warranties of the Purchaser. The Tender Offer Agreement contains customary representations and warranties by the Purchaser, including, among other things, (i) with respect to the organization, corporate powers and qualifications of the Purchaser; (ii) that the Purchaser has the necessary corporate power and authority to execute and deliver the Tender Offer Agreement and to consummate the transactions contemplated therein; (iii) with respect to necessary consents (other than (A) the consent of the FCC to the transfer of control of the FCC licenses for the stations owned by the Company's subsidiaries (the 16 19 "Company FCC Licenses"); (B) compliance with the HSR Act, and (C) compliance with the applicable requirements of the Exchange Act); (iv) with respect to the absence of any broker or other fees or commissions; and (v) that Purchaser has the funds necessary to consummate the Offer and the transactions contemplated by the Tender Offer Agreement. Representation and Warranties of the Company. The Tender Offer Agreement contains customary representations and warranties with respect to the Company, including, among other things, (i) with respect to the organization, corporate powers and qualifications of the Company; (ii) with respect to the capitalization of the Company; (iii) that the Company has the necessary power and authority to execute and deliver the Tender Offer Agreement and to consummate the transactions contemplated therein; (iv) with respect to necessary consents (other than (A) the consent of the FCC to the transfer of control of the Company FCC Licenses, (B) the compliance with the HSR Act, and (C) compliance with the applicable requirements of the Exchange Act); (iv) with respect to the absence of any broker or other fees or commissions; (v) that the Board of Directors of the Company, at a meeting duly called and held, has resolved to recommend acceptance of the Offer; and (vi) with respect to the Company's financial statements and financial condition. Interim Agreements. The Tender Offer Agreement obligates the Company and its subsidiaries, from the date of the Tender Offer Agreement until the Closing Date to conduct its business and keep its books, accounts, records, and files in the usual and ordinary manner in which such business has been conducted in the past, to deliver to the Purchaser copies of any report, statement, or schedule filed with the Commission, to provide the Purchaser with copies of the regular monthly internal operating statements of the Company, to make all commercially reasonable efforts to preserve the business organization of each Station (as defined below), retain the employees, consultants, and agents of each Station and preserve the goodwill of each Station, to keep all tangible personal property and real property in good operating condition (ordinary wear and tear excepted), and repair and maintain adequate and usual supplies of inventory, office supplies, spare parts, and other materials, and to maintain in effect the casualty and liability insurance on its assets. The Tender Offer Agreement also contains specific covenants as to certain impermissible activities of the Company, which provide that the Company will not (and will not permit any of its subsidiaries to) do the following: (i) issue, sell, pledge, dispose of or encumber any shares of, or any options, warrants or rights of any kind to acquire any shares of or any securities convertible into or exchangeable or exercisable for any shares of capital stock of the Company or any subsidiary of the Company (except for shares issuable upon exercise of the issued and outstanding Convertible Securities); (ii) except (A) in the ordinary course of business and consistent with prior practice, (B) for transactions with nonaffiliates of the Company which involve payments up to $500,000 in the aggregate, and (C) for the sale of KLTY-TV, sell, pledge, dispose of or encumber any assets of the Company or any subsidiary of the Company which are material to the Company or any subsidiary of the Company; (iii) split, combine, subdivide or reclassify any shares of the Company's capital stock or declare, set aside, or pay any dividend or distribution (whether payable in cash, stock, property or otherwise) with respect to any of the Company's capital stock, other than the payment in cash of any accrued dividends on the Series A Preferred Stock; (iv) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any of the Company's capital stock; (v) adopt a plan of complete or partial liquidation or resolutions providing for the complete or partial liquidation or dissolution of the Company or any subsidiary of the Company, except for the Subsidiary Reorganizations (as defined in the Tender Offer Agreement); (vi) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division or any material assets thereof or, other than cash management transactions in the ordinary course of business and consistent with prior practice, make any investment either by purchase of stock or securities, contributions to capital, property transfer or purchase of any property or assets of any other individual or entity; (vii) amend or modify the corporate charter, bylaws or other organizational documents of any subsidiary of the Company, except in connection with the Subsidiary Reorganizations; (viii) enter into any agreement or transaction with any, or modify the terms of any existing agreement with any, affiliate; (ix) terminate or fail to renew any Company FCC License; (x) fail to operate any radio station owned by the Company or a subsidiary of the Company in accordance with the Communications Act of 1934, the rules, regulations and policies of the FCC and the terms of the Company FCC Licenses, other than failures which, individually or in the aggregate, are not reasonably anticipated to have a material adverse effect on the 17 20 business, assets, results of operations, financial condition or prospects of the Company on a consolidated basis; (xi) cancel, discount or otherwise compromise any accounts receivable except in the ordinary course of business consistent with past practice; (xii) fail to file in a timely manner any applications to renew a Company FCC License; (xiii) (other than agreements for the sale of air time) enter into any agreement which involves payments by the Company of $50,000 or more, unless such agreement provides for cancellation thereof by the Company on 60 or fewer days notice and the amount payable by the Company during the period from the date of delivery of notice of cancellation until the date of cancellation plus any penalty for early termination does not exceed $50,000; (xiv) enter into any barter or trade agreement that is prepaid; (xv) apply to the FCC for any construction permit that would restrict the current operations of any of the radio stations owned by the Company's subsidiaries (individually, a "Station") or make any change in any Station's buildings, leasehold improvements or fixtures, except in the ordinary course of business or as necessary to comply with the Company's affirmative covenants with respect to the Renewal Application (as defined below); (xvi) enter into any contract, agreement, commitment or arrangement to do any of the foregoing. In addition, except (A) for salary increases or other employee benefit arrangements in the ordinary course of business and consistent with prior practice, (B) as may be required pursuant to any agreements in effect on the date of the Tender Offer Agreement, or (C) as may be required by law, neither the Company nor any subsidiary of the Company shall (1) grant any severance or termination pay to, or enter into any new employment or severance agreement with, any officer or employee of the Company or any subsidiary of the Company, (2) adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employee benefit plan, agreement, trust fund or other arrangement for the benefit or welfare of employees or former employees, or (3) increase the compensation or fringe benefits of any employee or former employee or pay any benefit not required by any existing plan, arrangement or agreement. In addition, neither the Company nor any subsidiary of the Company shall make or revoke any material tax election, settle or compromise any material federal, state, local or foreign tax liability (or any other tax liability which may have a material effect on taxable years ending after the Closing Date) or change (or make a request to any taxing authority to change) any aspect of accounting for tax purposes in any material respect. No Other Bids. The Tender Offer Agreement prohibits the Company from directly or indirectly soliciting, initiating or encouraging (including by way of furnishing information or assistance) any inquiry or the making of any proposal that constitutes, or may reasonably be expected to lead to, any inquiry or proposal that constitutes, or may reasonably be expected to lead to, any Competing Transaction (as defined below) (a "Takeover Proposal") or entering into any discussions, contracts or negotiations with respect to any Competing Transaction. The Tender Offer Agreement also provides that the Company shall not authorize or knowingly permit any of its officers, directors, employees, investment bankers, attorneys, accountants or other advisors or representatives to take any such action and the Company will direct such parties not to take any such action. Under the Tender Offer Agreement, the Company promptly shall advise the Purchaser in writing of any Takeover Proposal and shall, in such notice, indicate the identity of the offeror and the material terms and conditions of any such Takeover Proposal, including, without limitation, price. Notwithstanding the foregoing, nothing contained in the Tender Offer Agreement prevents the Board of Directors of the Company or any committee thereof from (a) (i) furnishing or causing to be furnished information concerning the Company and its businesses, properties or assets to a third party, (ii) engaging in negotiations with a third party, (iii) taking and disclosing to the Company's stockholders a position with respect to any Takeover Proposal (and, in connection therewith, withdrawing or modifying the approval or recommendation by the Board of Directors of the Offer) or (iv) entering into a Competing Transaction, but in each case referred to in the foregoing clauses (i) through (iv) only to the extent that prior to furnishing such information to, or entering into discussions or negotiations with, such person or entity (A) the Board of Directors of the Company shall conclude, after consultation with its outside legal counsel (which may be the Company's regularly engaged legal counsel), in good faith that such action is required under applicable law for the discharge of its fiduciary duties, and (B) the Company provides written notice to Purchaser to the effect that it is furnishing information, or affording access to properties, books or records to, or entering into discussions or negotiations with, such person or entity or (b) complying with Rule 14e-2 promulgated under the Exchange Act. A "Competing Transaction" is defined in the Tender Offer Agreement as any merger, consolidation, reorganization, share exchange or other business combination involving the Company or any subsidiary of the 18 21 Company or any acquisition in any manner of beneficial ownership of 20% or more of the outstanding shares of any class of capital stock of the Company, or any class of capital stock of any subsidiary of the Company, or of all or a significant portion of the assets of the Company and the subsidiaries of the Company, taken as a whole. Control of Stations. Pursuant to the Tender Offer Agreement, until the grant of the FCC Consent, the Purchaser shall not directly or indirectly control, manage, supervise or direct the operation of the Company's radio stations or the conduct of the Company's business, including, but not limited to, matters relating to programming, personnel and finances, all of which shall remain and be solely the responsibility of and under the complete discretion and control of each licensee of the Company's radio stations. Renewal Application. The Tender Offer Agreement provides if the application for renewal of the license for WAMR-FM, Miami, Florida (the "Renewal Application") remains pending or has not become a Final Order, both the Purchaser and the Company agree that the Closing shall occur and both parties agree to abide by the procedures established in Stockholders of CBS, Inc., FCC 95-469 (rel. Nov. 22, 1995) para. para. 34-35, for processing applications for transfer of control of a license during the pendency of an application for renewal of a station license. Pursuant to the Tender Offer Agreement, the Company agrees to use commercially reasonable efforts to cooperate with the Purchaser with the prosecution of the Renewal Application, and further agrees that any interest it may acquire in such license at Closing is subject to whatever action the FCC may ultimately take with respect to the Renewal Application. This agreement with respect to the Renewal Application will survive the Closing until any order issued by the FCC with respect to the Renewal Application becomes a Final Order. Access to Information; Confidentiality. The Tender Offer Agreement provides that until the Closing Date, the Company will give Purchaser and its representatives reasonable access, during normal business hours at all reasonable times, to the Company's officers, employees, agents, properties, books, records and contracts, and shall furnish and cause each Company subsidiary to furnish to the Purchaser all financial, operating and other data and information as requested by the Purchaser and its representatives, subject to Purchaser maintaining the confidentiality of any non-public information disclosed to it as provided in the Confidentiality Agreement (as defined in the Tender Offer Agreement). Fees and Expenses. The Tender Offer Agreement provides that all costs and expenses incurred in connection with the Offer, the Tender Offer Agreement, and the transactions contemplated by the Tender Offer Agreement shall be paid by the party incurring such fees and expenses, provided, however, if the Closing occurs, the Purchaser shall guarantee that the Company pays all fees and costs payable to the investment bankers set forth in the Tender Offer Agreement and shall loan the Company funds to pay such fees and costs if the Company does not have sufficient cash. Reasonable Efforts. Subject to the terms and conditions provided in the Tender Offer Agreement, each of the Company and the Purchaser shall cooperate and use their respective reasonable efforts to take or cause to be taken, all action, and to do, or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Tender Offer Agreement. Consents and Filings. Pursuant to the Tender Offer Agreement, each of the Company and the Purchaser will (i) make any required filings and submissions under the HSR Act with respect to the Offer by June 14, 1996,(ii) substantially comply with any request for additional information issued by the Federal Trade Commission, the Department of Justice, or any other antitrust authority in connection with the Offer, and (iii) take all reasonable actions to obtain any other consent, authorization, order, or approval of, or any exemption by, any governmental entity required to be obtained or made of any governmental entity in connection with the Offer. Each party will cooperate promptly with the other party in furnishing information to the other party in connection with the public filings. Indemnification. Under the Tender Offer Agreement, the Purchaser has agreed to indemnify the Company, each stockholder who executes the Stockholder Purchase Agreement, and each person who is now, or who becomes prior to the Closing Date an officer or director of the Company or any subsidiary of the Company (the "Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or 19 22 judgments, or amounts that are paid in settlement with the approval of the Purchaser, arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of the Tender Offer Agreement or the transactions contemplated therein. The Tender Offer Agreement, however, provides that no indemnity shall be available to the extent a court of competent jurisdiction finally determines that the claim for indemnity is caused by the Company knowingly or intentionally misrepresenting that it may enter into the Tender Offer Agreement. Pursuant to the Tender Offer Agreement, from and after the Closing, the Purchaser shall indemnify each person who is now, or who becomes prior to the Closing Date an officer or director of the Company or any subsidiary of the Company (the "D&O Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or judgments, or amounts that are paid in settlement with the approval of the Purchaser, arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part or arising in whole or in part out of the fact that such person is or was a director or officer of the Company or any subsidiary of the Company whether pertaining to any matter existing or occurring at or prior to the Closing Date (including, without limitation, any matter relating to the transactions contemplated by the Tender Offer Agreement) and whether asserted or claimed prior to, or at or after, the Closing Date, in each case to the full extent the Company or the applicable subsidiary of the Company would have been permitted under the law of the State of its incorporation and its Certificate, or Articles of Incorporation and Bylaws to indemnify such person (and the Purchaser shall pay expenses in advance of the final disposition of any such action or proceeding to each D&O Indemnified Party upon receipt of any undertaking by or on behalf of such D&O Indemnified Party to repay such amount if it shall ultimately be determined that he or she is not entitled to indemnification). All rights to indemnification existing in favor of the D&O Indemnified Parties will continue in full force and effect after the Closing Date. Company Indebtedness. Pursuant to the Tender Offer Agreement, concurrently with the Closing, the Purchaser shall repay or cause to be repaid all outstanding indebtedness under the Company's Credit Agreement or, at the Purchaser's option, obtain the consent of the Company's lenders under such Credit Agreement to have such indebtedness remain outstanding. Maintain Listing. Under the Tender Offer Agreement, for a period of one year from and after the Closing, the Purchaser shall use its best efforts to cause the shares of Class A Common Stock to remain listed or quoted on a recognized national exchange or NASD quotation system. Independent Directors. Pursuant to the Tender Offer Agreement, from and after the Closing and until the later of one year from the Closing Date or the date on which the Company is no longer a reporting company under the Exchange Act, the Purchaser shall cause the Company to maintain two independent directors. FCC Approval. The Tender Offer Agreement provides that on or before June 7, 1996, the parties shall file with the FCC applications (the "FCC Applications") for the consent of the FCC to the change in control of the holders of the Company FCC Licenses (the "FCC Consent"). The parties shall thereafter prosecute the FCC Applications with all reasonable diligence and otherwise use commercially reasonable efforts to obtain the FCC Consent as expeditiously as practicable and shall use commercially reasonable efforts to cause the FCC Consent to become a Final Order. Each party will use commercially reasonable efforts to comply with the reasonable requests of the FCC for further information in connection with the FCC Applications. If reconsideration or judicial review is sought with respect to the FCC Consent, the party affected shall vigorously oppose such efforts for reconsideration or judicial review. The term "Final Order" means a written action or order issued by the FCC setting forth the FCC Consent (a) which has not been reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with respect to which (i) no requests have been filed for administrative or judicial review, reconsideration, appeal or stay, and the time for filing any such requests and for the FCC to set aside the action on its own motion (whether upon reconsideration or otherwise) has expired, or (ii) in the event of the filing of any such request for review, reconsideration, appeal or stay, the action granting the FCC Consent shall have been reaffirmed or upheld and the time for further review, reconsideration or appeal has expired without the filing of any such action for further review or such requests have been withdrawn or denied. 20 23 Termination. The Tender Offer Agreement may be terminated and the Offer may be abandoned at any time prior to the Closing Date upon written notice promptly given to the other party: (i) by mutual written consent of the parties; (ii) by either Purchaser or the Company, if the FCC denies or dismisses the FCC Applications and the time for reconsideration or court review under the Communications Act of 1934 with respect to such denial or dismissal has expired and there is not pending with respect thereto a timely filed petition for reconsideration or request for review; (iii) by either the Company or the Purchaser, if the Board of Directors of the Company concludes, after taking into account the advice of outside legal counsel (which may be the Company's regularly engaged legal counsel), that accepting a proposed Competing Transaction is required under applicable law for the discharge of its fiduciary duties and the Company enters into an agreement for such Competing Transaction; provided, however, that the Company may not terminate the Tender Offer Agreement pursuant to this clause (iii) earlier than forty-eight hours after furnishing notice to the Purchaser of such Competing Transaction; (iv) by either the Company or the Purchaser if (A) the Company shall have determined, pursuant to duly adopted resolutions of its Board of Directors, not to recommend acceptance of the Offer, or the Company's recommendation to accept the Offer is withdrawn or modified, or resolved to be withdrawn or modified, by reason of receipt of a Takeover Proposal, or (B) the Company recommends, pursuant to duly adopted resolutions, any Takeover Proposal from a person or entity other than the Purchaser or its affiliates; provided, however, that the Purchaser shall not terminate the Tender Offer Agreement pursuant to this clause (iv) if, as a result of the Company's receipt of a Takeover Proposal from a third party, the Company, as required by applicable law, as advised by outside counsel, withdraws, modifies or amends its approval or recommendation of acceptance of the Offer, but within five business days thereafter, the Company publicly reconfirms to all of its stockholders its recommendation of acceptance of the Offer; (v) by the Purchaser, if the Company fails to perform or breaches any of its material obligations or duties under the Tender Offer Agreement and the Company has not cured such failure to perform or breach within fifteen days after delivery of written notice from the Purchaser or upon a material breach of any representation and warranty of the Company contained in the Tender Offer Agreement; (vi) by the Company, if the Purchaser fails to perform or breaches any of its material obligations or duties under the Tender Offer Agreement, and the defaulting party has not cured such failure to perform a breach within fifteen days after delivery of written notice from the Company or upon material breach of any representation and warranty of the Purchaser contained in the Tender Offer Agreement; and (vii) by the Purchaser or the Company, if the Closing shall not have occurred on or before October 31, 1996; provided, however, the right to terminate the Tender Offer Agreement pursuant to this clause (vii) shall not be available to any party whose failure to fulfill any obligation under the Tender Offer Agreement has been the cause of, or results in, the failure of the Closing to have occurred on or before October 31, 1996. Pursuant to the Tender Offer Agreement, in the event of the termination of the Tender Offer Agreement, the Tender Offer Agreement shall become void, and there shall be no liability or obligations on the part of any party to the Tender Offer Agreement, except for any liability arising under the Confidentiality Agreement (as defined in the Tender Offer Agreement) or for any right to indemnification under the Tender Offer Agreement and except (i) liability for any willful breach of any obligation, covenant or agreement contained in the Tender Offer Agreement or any intentional failure of the representations and warranties contained in the Tender Offer Agreement to have been true, and (ii) (x) if the stockholders who are parties to the Stockholder Purchase Agreement terminate such agreement and (y) (1) the Company terminates the Tender Offer Agreement pursuant to clauses (iii) and (iv) of the immediately preceding paragraph, or (2) Purchaser terminates the Tender Offer Agreement and the Offer pursuant to clauses (iii) and (iv) of the immediately preceding paragraph, the Company will pay to Purchaser $13.5 million within five business days after the conditions contained in the foregoing clauses (x) and (y) are satisfied; provided, however, if the Company is prohibited by its principal senior lender or lenders from paying the sum required under clause (ii) of this paragraph in cash, then in lieu of such payment, the Company shall immediately issue to the Purchaser a number of shares of Class A Common Stock having a fair market value equal to such sum (determined by taking the average closing price of Class A Common Stock on the NASDAQ National Market for the ten business days immediately following the public announcement of the termination of the Tender Offer Agreement). If the Company shall issue shares to the Purchaser as contemplated in the preceding sentence, such shares shall be registered under the Securities Act and freely tradeable upon delivery, or if the foregoing is not reasonably 21 24 practicable, shall be subject to a registration rights agreement enabling the Purchaser to sell such shares without undue delay or expense. The Tender Offer Agreement provides that if the Company fails to promptly pay any amounts under clause (ii) of this paragraph when due, the Company shall in addition thereto pay to the Purchaser all costs and expenses (including fees and disbursements of counsel) incurred in collecting such amounts together with interest on the unpaid amount from the date such payment was required to be made until the date such payment is received by the party entitled to such payment at a per annum rate equal to the prime rate, published in The Wall Street Journal under the heading "Money Rates" or a successor heading, as in effect from time to time during such period. Pursuant to the Tender Offer Agreement, recovery of damages shall be the sole and exclusive remedy of the Purchaser in connection with the termination of the Tender Offer Agreement for the reasons set forth in clause (i) of this paragraph and also that recovery of $13.5 million shall be the sole and exclusive remedy of the Purchaser in connection with the termination of the Tender Offer Agreement as provided under clause (ii) of this paragraph, regardless of the actual damages sustained. The Tender Offer Agreement provides that the Purchaser waives its right to specific performance. Amendment and Waiver. The Tender Offer Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. The parties to the Tender Offer Agreement may (i) extend the time for performance of any of the obligations or other acts of any other party hereto, or (ii) waive compliance with any of the agreements of any other party or with any conditions to its own obligations, provided, that any such extension or waiver shall be valid only if set forth in a written instrument and signed on behalf of the party making the waiver or granting the extension by a duly authorized officer. STOCKHOLDER PURCHASE AGREEMENT. On June 1, 1996, the Purchaser entered into the Stockholder Purchase Agreement with the Selling Stockholders. The Selling Stockholders and the number and type of Shares subject to the Stockholder Purchase Agreement are as follows: Carl Parmer, 160,000 Shares of Class A Common Stock and 413,026 Shares of Class B Common Stock; Catharine Rolph 232,146 Shares of Class B Common Stock and 335,635 Shares of Series A Preferred Stock; Margaret A. H. Wilson, 445,649 Shares of Class B Common Stock; Susan Heftel-Liquido, as trustee of the Susan Heftel-Liquido Trust u/t/d 2/1/93, 503,727 Shares of Class B Common Stock; Christopher Lee Heftel, 321,872 Shares of Class B Common Stock; Terry Heftel, 96,810 Shares of Class B Common Stock; Richard Heftel, as trustee of the Richard Heftel Living Trust dated January 9, 1996, 559,118 Shares of Class B Common Stock; Cecil Heftel, 696,181 Shares of Class B Common Stock; with respect to all of the following Selling Stockholders, each owns 4,400 Shares of Class B Common Stock: Michele Lopez, Michael Donohoe, James Donohoe, Lani Donohoe, as custodian for Josh Donohoe, under the California Uniform Transfers to Minors Act, Margaret Wilson, as custodian for Nalani Wilson, under the Hawaii Uniform Transfers to Minors Act, Margaret Wilson, as custodian for Ryan Wilson, under the Hawaii Uniform Transfers to Minors Act, Margaret Wilson, as custodian for Deven Wilson, under the Hawaii Uniform Transfers to Minors Act, Susan Heftel-Liquido, as custodian for Francisco Liquido, under Hawaii Uniform Transfers to Minors Act, Susan Heftel-Liquido, as custodian for Tiara Liquido, under the Hawaii Uniform Transfers to Minors Act, Susan Heftel-Liquido, as custodian for Carlo Liquido, under the Hawaii Uniform Transfers to Minors Act, Susan Heftel-Liquido, as custodian for Fernando Liquido, under the Hawaii Uniform Transfers to Minors Act, Christopher Lee Heftel, as custodian for Logan Heftel, under the Tennessee Uniform Transfers to Minors Act, Christopher Lee Heftel, as custodian for Brannon Heftel, under the Tennessee Uniform Transfers to Minors Act, Christopher Lee Heftel, as custodian for Hayden Heftel, under the Tennessee Uniform Transfers to Minors Act, Terry Heftel, as custodian for Jonathan Heftel, under the Utah Uniform Transfers to Minors Act, Terry Heftel, as custodian for Jeffrey Welch, under the Utah Uniform Transfers to Minors Act, Terry Heftel, as custodian for Jeremy Heftel, under the Utah Uniform Transfers to Minors Act, Richard Heftel, as custodian for Kawika Heftel, under the California Uniform Transfers to Minors Act, Richard Heftel, as custodian for Christian Heftel, under the California Uniform Transfers to Minors Act, and Richard Heftel, as custodian for Brittany Heftel, under the California Uniform Transfers to Minors Act. The following is a summary of certain provisions of the Stockholder Purchase Agreement, a copy of which is filed as an Exhibit to Schedule 14D-1 of the Purchaser and Parent. Such summary is qualified in its entirety by reference to the Stockholder Purchase Agreement. 22 25 Purchase of Stock. The Stockholder Purchase Agreement provides that each Selling Stockholder shall sell and the Purchaser shall purchase all of the Shares of Common Stock owned by each Selling Stockholder at the Offer Price. Pursuant to the Stockholder Purchase Agreement, the Purchaser will also purchase 335,635 shares of the Series A Preferred Stock of the Company owned by Catharine Rolph, a daughter of Cecil Heftel, at a price of $1.00 per share plus accrued but unpaid dividends. Pursuant to the Stockholder Purchase Agreement, each Selling Stockholder consents to the treatment as set forth in the Tender Offer Agreement with respect to each Convertible Security held by such Selling Stockholder. The closing of the purchase and sale pursuant to the Stockholder Purchase Agreement will occur on the first business day after the satisfaction or waiver of the conditions specified in the following two paragraphs (the "closing date"). Conditions to Consummation by Certain Stockholders. Pursuant to the Stockholder Purchase Agreement, the obligations of Cecil Heftel and Carl Parmer to consummate the Stockholder Purchase Agreement are subject to the satisfaction, at or before the closing date of the Stockholder Purchase Agreement of each of the following conditions: (i) the amounts provided for in the Agreements Not to Compete entered into between the Company and Mr. Heftel and Mr. Parmer shall have been paid; and (ii) the amounts as set forth in the Settlement Agreements between the Company and Mr. Heftel and Mr. Parmer shall have been paid. Conditions to Consummation by Purchaser. Pursuant to the Stockholder Purchase Agreement, the obligations of the Purchaser to consummate the Stockholder Purchase Agreement are subject to the satisfaction, at or before the closing date of the Stockholder Purchase Agreement, of each of the following conditions: (i) the expiration or termination of the applicable waiting period under the HSR Act; (ii) the FCC Consent becoming a Final Order (as defined in the Tender Offer Agreement); provided, however, that if the primary lenders for the Purchaser do not require that the FCC Consent become a Final Order to consummate the closing of the Stockholder Purchase Agreement, then the granting of the FCC Consent and the giving of public notice of such fact (in the event that at the closing of the Stockholder Purchase Agreement, the application for renewal of the license for WAMR-FM, Miami, Florida remains pending or has not become a Final Order (as defined in the Tender Offer Agreement), the closing of the Stockholder Purchase Agreement shall occur); (iii) no temporary restraining order, preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a government, regulatory or administrative agency or commission shall be in effect which restrains or prohibits the transactions contemplated in the Stockholder Purchase Agreement; and (iv) that all representations and warranties of the Selling Stockholders contained in the Stockholder Purchase Agreement shall be true and correct in all material respects at and as of the closing date of the Stockholder Purchase Agreement (except those representations and warranties which address matters only as of a particular date shall remain true and correct in all material respects as of such date) and the Selling Stockholders shall have performed in all material respects all agreements and covenants required by the Stockholder Purchase Agreement prior to or at the closing date of the Stockholder Purchase Agreement. Covenants. The Stockholder Purchase Agreement contains specific covenants as to certain impermissible activities of each Selling Stockholder prior to the termination of the Stockholder Purchase Agreement, which provide that each Selling Stockholder will not: (i) sell, transfer, pledge, assign or otherwise dispose of, or tender or agree to tender into any tender offer with respect to, or enter into any contract, option or other arrangement with respect to the sale, transfer, pledge, assignment or other disposition of such Selling Stockholder's Shares to any person other than the Purchaser or the Purchaser's designee; (ii) acquire any additional shares of Common Stock without the prior consent of the Purchaser; (iii) deposit any Shares into a voting trust or grant a proxy or enter into a voting agreement with respect to any Shares; (iv) hold discussions with any person other than the Purchaser and its affiliates with respect to any offer or potential offer for the Shares other than the Offer; or (v) solicit, encourage or take any other action to facilitate (including by way of furnishing information) any inquiries or proposals for any merger or consolidation involving the Company, the acquisition of any shares of Common Stock or the acquisition of all or substantially all of the assets of the Company by any person other than the Purchaser or its sole stockholder. The Stockholder Purchase Agreement obligates each Selling Stockholder to notify the Purchaser promptly and to provide all details requested by the Purchaser if such Selling Stockholder is approached or solicited, directly or indirectly, by any person with respect to any of the above-referenced impermissible 23 26 activities and to vote its Shares against any action or agreement which would result in a breach of any representation, warranty or covenant of the Company as set forth in the Tender Offer Agreement or which, in the sole judgment of the Purchaser, would impede, interfere with or attempt to discourage the Offer, unless the Stockholder Purchase Agreement has terminated. Termination. The Stockholder Purchase Agreement may be terminated by written notice given to the other party, at any time prior to the closing date of the Stockholder Purchase Agreement: (i) by the mutual written consent of the Purchaser and each Selling Stockholder; (ii) by any Selling Stockholder as to that Selling Stockholder's individual obligations if the Company is able to terminate the Tender Offer Agreement pursuant to any of clauses (ii), (iii), (iv), (vi), and (vii) of the subsection entitled "Termination" in the summary of the Tender Offer Agreement; and (iii) by the Purchaser if the Purchaser has terminated the Tender Offer Agreement pursuant to any of clauses (ii), (iii), (iv), (vi), and (vii) of the subsection entitled "Termination" in the summary of the Tender Offer Agreement. Indemnification. Pursuant to the Stockholder Purchase Agreement, the Purchaser shall indemnify each Selling Stockholder (the "Indemnified Party") against all losses, claims, damages, costs, expenses, liabilities or judgments or amounts that are paid in settlement with the approval of Purchaser arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of the Stockholder Purchase Agreement or the Tender Offer Agreement or the transactions contemplated therein; provided, however, that no indemnity shall be available to the extent a court of competent jurisdiction finally determines that the claim for indemnity is caused by the Indemnified Party knowingly or intentionally misrepresenting that it may enter into the Stockholder Purchase Agreement. Fees and Expenses. All costs and expenses incurred in connection with the Stockholder Purchase Agreement and the transactions contemplated therein shall be paid by the party incurring such expenses. THE SETTLEMENT AGREEMENTS. In December 1993, the Company entered into ten-year Employment Agreements with Cecil Heftel and Carl Parmer under which each of them is entitled to receive a base annual salary of $500,000 and bonuses based on the performance of the Company. Under those Employment Agreements, if the Company terminates the employment of Mr. Heftel or Mr. Parmer without cause, he will be entitled to receive a lump sum payment equal to the present value of all amounts remaining to be paid by the Company to him under his Employment Agreement. For purposes of calculating future bonuses, the Company will be deemed to have achieved the performance level necessary to pay the maximum bonus. The Purchaser has informed Mr. Heftel and Mr. Parmer that it intends to cause the Company to terminate their employment, without cause, immediately following the closing of the Stockholder Purchase Agreement. Concurrently with the execution of the Stockholder Purchase Agreement, Mr. Heftel and Mr. Parmer each entered into a Settlement Agreement with the Company. Pursuant to the respective Settlement Agreements, the employment by the Company of Mr. Heftel and Mr. Parmer will terminate immediately following the purchase of Shares pursuant to the Stockholder Purchase Agreement and the Company will pay Mr. Heftel $11,861,069 and Mr. Parmer $6,941,960 in exchange for releases by Mr. Heftel and Mr. Parmer from any claims resulting from termination of their Employment Agreements with the Company. The Purchaser has guaranteed the obligations of the Company under the Settlement Agreements. The total amount to be paid to each of Mr. Heftel and Mr. Parmer under his respective Settlement Agreement and Agreement Not to Compete (described below) does not exceed the present value of all amounts remaining to be paid to him by the Company under his respective Employment Agreement. THE AGREEMENTS NOT TO COMPETE. Concurrently with the execution of the Stockholder Purchase Agreement, Cecil Heftel and Carl Parmer entered into Agreements Not to Compete with the Company. Pursuant to these agreements, Messrs. Heftel and Parmer each agreed, for a period of five years commencing on the closing date of the Stockholder Purchase Agreement, without the prior written consent of the Company, not to directly or indirectly own (except that such person may own securities which constitute not more than 5% of a publicly traded company's issued and outstanding capital stock), work for, act as consultant or advisor to, manage, operate or control or participate in the ownership, management, operation or control of any radio station which broadcasts predominately in Spanish in the markets as set forth in the Agreements 24 27 Not to Compete. In consideration of their respective agreements not to compete, the Company agreed to pay Mr. Heftel $2,500,000 and Mr. Parmer $4,500,000 on the closing date of the Stockholder Purchase Agreement. The Purchaser has guaranteed the obligations of the Company under the Agreements Not to Compete. 13. DIVIDENDS AND DISTRIBUTIONS If on or after the date of the Tender Offer Agreement, the Company should (i) split, combine or otherwise change the Shares or its capitalization, (ii) issue or sell any additional securities of the Company or otherwise cause an increase in the number of outstanding securities of the Company (except for Shares issuable upon the exercise of employee stock options or warrants outstanding on the date of the Tender Offer Agreement) or (iii) acquire currently outstanding Shares or otherwise cause a reduction in the number of outstanding Shares, then, without prejudice to the Purchaser's rights under Sections 1 and 14, the Purchaser in its sole discretion, subject to the terms of the Tender Offer Agreement, may make such adjustments as it deems appropriate in the Offer Price and other terms of the Offer. If, on or after the date of the Tender Offer Agreement, the Company should declare or pay any dividend on the Shares or make any distribution (including, without limitation, cash dividends, the issuance of additional Shares pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Shares that is payable or distributable to stockholders of record on a date prior to the transfer to the name of the Purchaser or its nominee or transferee on the Company's stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to the Purchaser's rights under Sections 1 and 14, any such dividend, distribution or right to be received by the tendering stockholders will be received and held by the tendering stockholder and tendered to the Depositary for the account of the Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, the Purchaser will be entitled to all rights and privileges as owner of any such dividend, distribution or right and may withhold the entire Offer Price or deduct from the Offer Price the amount or value thereof, as determined by the Purchaser in its sole discretion. 14. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provisions of the Offer, the Purchaser will not be required to accept for payment or pay for tendered Shares unless and until the following conditions shall have been satisfied or waived: (i) the waiting period under the HSR Act with respect to the purchase of the Shares shall have expired or terminated; (ii) the FCC Consent shall have been obtained and become a Final Order; provided, however, if the primary lenders for the Purchaser do not require that the FCC Consent become a Final Order in order to consummate the Offer, then this condition shall be deemed satisfied if the FCC shall have granted the FCC Consent and shall have given public notice of the grant of the FCC Consent; (iii) no temporary restraining order, preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a government, regulatory or administrative agency shall be in effect which restrains or prohibits the Offer or the transactions contemplated by the Tender Offer Agreement; and (iv) all the representations and warranties of the Company contained in the Tender Offer Agreement shall be true and correct in all material respects at and as of the Closing Date under the Tender Offer Agreement, except those representations and warranties which address matters only as of a particular date shall be true and correct in all material respects as of such date, and the Company shall have performed in all material respects all agreements and covenants required to be performed by it prior to or at such Closing Date. 25 28 If any of the foregoing conditions shall not have been satisfied prior to acceptance for payment of any tendered Shares, the Purchaser may (subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Exchange Act relating to the obligation of the Purchaser to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer) postpone the acceptance for payment of, or payment for, Shares or, subject to the terms of the Tender Offer Agreement, terminate or amend the Offer. The foregoing conditions are for the sole benefit of the Purchaser and may be asserted by the Purchaser regardless of the circumstances giving rise to any such condition or may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. The failure by the Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances and each such right will be deemed an ongoing right that may be asserted at any time and from time to time. 15. CERTAIN REGULATORY AND LEGAL MATTERS Based on a review of publicly available filings made by the Company with the Commission and other publicly available information concerning the Company, neither the Purchaser nor Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares as contemplated herein or of any approval or other action, except as otherwise described in this Section 15, by any governmental entity that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, the Purchaser and Parent currently contemplate that such approval or other action will be sought. While, except as otherwise expressly described in this Section 15, the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken. FCC. The domestic broadcasting industry is subject to extensive federal regulation which, among other things, requires the prior approval of the FCC for the issuance, renewal, or assignment of broadcast station licenses and for the transfer of control of a company which holds such licenses directly or indirectly. The Company is subject to the Communications Act of 1934, as amended, which prohibits the transfer of control of a company holding any license issued by the FCC, or the assignment of such license, without prior FCC approval. The Communications Act of 1934 requires that the FCC find that the proposed transfer or assignment would serve the public interest, convenience and necessity. In order to consummate the Offer, prior FCC approval will be required. Pursuant to the Tender Offer Agreement, on or around June 7, 1996 the parties thereto filed with the FCC the FCC Applications for the FCC Consent. See "Tender Offer Agreement -- FCC Approval" herein. There can be no assurance that the FCC Consent will be granted, or if granted, that such approval will be on terms and conditions acceptable to Purchaser and Parent. Interested parties may file petitions to deny approval of the FCC Applications within 30 days after the date of the FCC's public notice announcing the acceptance for filing of such applications, and the FCC may not grant the FCC Applications prior to the completion of this 30-day public notice period. Interested parties may file informal objections to the FCC Applications at any time prior to FCC action thereon. The parties to the FCC Applications may file an opposition to any petitions to deny or informal objections filed against the FCC Applications. The parties to the Tender Offer Agreement have agreed to prosecute the FCC Applications with all reasonable diligence and otherwise use commercially reasonable efforts to obtain the FCC Consent as expeditiously as practicable. In recent years, the FCC has generally reached decisions regarding uncontested applications for transfer of control over broadcast licensees within several weeks of the 26 29 expiration of the 30-day public notice period, and in contested cases, within one year of the FCC filing. There can be no assurance, however, that the FCC will reach a decision on the FCC Applications within such time period. FCC staff members regularly review applications, and their decisions are subject to reconsideration and to review by the full FCC. Petitions for reconsideration and applications for review must be filed within 30 days after public notice of the staff action at issue. In addition, the FCC may on its own motion review staff actions. The FCC has 40 days after public notice of such actions to begin such review. If the full FCC, rather than the staff, grants the FCC Applications, interested parties may file petitions for reconsideration of such orders granting approval. As to each such application, petitions for reconsideration must be filed within 30 days after the date on which the FCC releases public notices of its approval orders. The filing of such a petition would not stay the FCC's approval automatically, although a stay can be sought from the FCC or from a court. In addition, the FCC may reconsider its approval orders within 30 days of the public notice even if no such petitions are filed. Interested parties may also seek judicial review of the FCC's decision, a request for which must also be filed within 30 days after the date on which the FCC releases public notice of the Final Order either approving or disapproving the FCC Applications or its order disposing of any petitions for reconsideration of the FCC's initial decision. The Telecommunications Act of 1996, which amends major provisions of the Communications Act of 1934, was enacted on February 8, 1996. Although the Telecommunications Act of 1996 creates significant new opportunities for broadcasting companies, it also creates uncertainties as to how the FCC and the courts will enforce and interpret such act and how the broadcasting industry will react to the changes made by the act. Moreover, other governmental regulations and policies pertaining to the broadcasting industry may change over time, and there can be no assurance that such changes would not have a material adverse impact upon the business of the Company, Purchaser or Parent. Antitrust. Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares under the Offer may be consummated following the expiration of a 15-calendar day waiting period following the filing by Parent of a Notification and Report Form with respect to the Offer, unless Parent receives a request for additional information or documentary material from the Antitrust Division of the Department of Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC") or unless early termination of the waiting period is granted. Parent has made such filing. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC requests additional information or material from Parent concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Parent. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agencies concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. The provisions of the HSR Act would similarly apply to any purchase of Shares subject to the Stockholder Purchase Agreement pursuant to the Stockholder Purchase Agreement, except that the initial waiting period would expire 30 days following the filing of Notification and Report Forms under the HSR Act by Parent and the Company, and a request for additional information or material from Parent or the Company during the initial 30-day waiting period would extend the waiting period until 11:59 p.m. New York City time on the 20th day after the date of substantial compliance by Parent and the Company with such request. Parent and the Company have filed Notification and Report Forms under the HSR Act with respect to the Stockholder Purchase Agreement. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's proposed acquisition of the Company. At any time before or after the Purchaser's purchase of Shares pursuant to the Offer or the Stockholder Purchase Agreement, the Antitrust 27 30 Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or the Stockholder Purchase Agreement or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of Parent or its subsidiaries, or the Company or its subsidiaries. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer or the Stockholder Purchase Agreement on antitrust grounds will not be made or, if such a challenge is made, of the results thereof. Section 203 of the DGCL. Section 203 of the Delaware General Corporation Law (the "DGCL"), in general, prohibits a Delaware corporation such as the Company from engaging in a "Business Combination" (as defined in the statute) with an "Interested Stockholder" (defined below) for a period of three years following the date that such person became an Interested Stockholder unless, among other things, prior to the time such person became an Interested Stockholder, the board of directors of the corporation approved either the Business Combination or the transaction that resulted in the stockholder becoming an Interested Stockholder. In general, an "Interested Stockholder" is defined as any person or entity that is the beneficial owner of 15% or more of a corporation's outstanding voting stock. Prior to Parent's entering into the May 1995 Transactions, the board of directors of the Company approved such transactions for purposes of Section 203 of the DGCL, and prior to the Purchaser's entering into the Stockholder Purchase Agreement and Tender Offer Agreement, the board of directors of the Company approved the Stockholder Purchase Agreement and Tender Offer Agreement and the transactions contemplated thereby for purposes of Section 203 of the DGCL. State Takeover Laws. A number of states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining presenting stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. Based on information supplied by the Company, the Purchaser does not believe that any state takeover statutes apply to the Offer. Neither the Purchaser nor Parent has currently complied with any state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer, and nothing in this Offer to Purchase or any action taken in connection with the Offer is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in consummating the Offer. In such case, the Purchaser may not be obliged to accept for payment or pay for any Shares tendered pursuant to the Offer. 16. FEES AND EXPENSES Neither the Purchaser, nor Parent, nor any officer, director, stockholder, agent or other representative thereof, will pay any fees or commissions to any broker, dealer or other person (other than the Dealer Manager, the Depositary and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees will, upon request, be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding materials to their customers. 28 31 Purchaser has retained CS First Boston Corporation to act as Dealer Manager in connection with the Offer and has agreed to pay a customary fee for its services and reimburse CS First Boston Corporation for its out-of-pocket expenses, including fees and expenses of its counsel. Additionally, Purchaser has retained Morrow & Co., Inc., as Information Agent, and The Bank of New York, as Depositary, in connection with the Offer. The Information Agent and the Depositary will receive reasonable and customary compensation for their services hereunder and reimbursement for their reasonable out-of-pocket expenses. The Dealer Manager, Depositary and the Information Agent will also be indemnified by the Purchaser against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. 17. MISCELLANEOUS The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares residing in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. No persons have been authorized to give any information or make any representation on behalf of the Purchaser or Parent other than as contained in this Offer to Purchase or in the Letter of Transmittal, and, if any such information or representation is given or made, it should not be relied upon as having been authorized by the Purchaser or Parent. The Purchaser has filed with the Commission a Statement on Schedule 14D-1/13D, pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer. Such Schedule and any amendments thereto, including exhibits, may be examined and copies may be obtained at the same places and in the same manner as set forth in Section 9 (except that they will not be available at the regional offices of the Commission). CLEAR CHANNEL RADIO, INC. 29 32 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER The name, position with Parent and the Purchaser, present principal occupation and five-year employment history of each of the directors, executive officers and key employees of Parent and the Purchaser are set forth below. Each person listed below is a citizen of the United States.
POSITION WITH PARENT PRESENT PRINCIPAL NAME AGE AND/OR THE PURCHASER OCCUPATION OR EMPLOYMENT(1) - --------------------------- --- ------------------------------ ------------------------------ L. Lowry Mays.............. 60 President and Chief Executive President and Chief Executive 400 Geneseo Road Officer of Parent; Director Officer of Parent; Director San Antonio, Texas 78209 of Parent; Chief Executive of Parent; Chief Executive Officer and President of Officer and President of Purchaser; Chairman of the Purchaser; Chairman of the Board of Purchaser Board of Purchaser Alan D. Feld(2)............ 59 Director of Parent Partner of the law firm Akin, 1700 Pacific Ave., Gump, Strauss, Hauer & Feld, Suite 4100, Dallas, L.L.P. Texas 75201-4675 B. J. McCombs.............. 68 Director of Parent; Director Private Investor 825 Contour of Purchaser San Antonio, Texas 78212 Theodore H. Strauss(3)..... 71 Director of Parent Senior Managing Director 5100 Park Lane Bear, Stearns & Co., Inc. Dallas, Texas 75220 John H. Williams(4)........ 62 Director of Parent; Director Senior Vice President 7810 Glen Albens Circle of Purchaser Everen Securities, Inc. Dallas, Texas 75225 Mark P. Mays............... 32 Senior Vice Senior Vice 200 Concord Plaza President/Operations of President/Operations of Suite 600 Parent; Senior Vice Parent; Senior Vice San Antonio, Texas 78216 President/Operations of President/Operations of Purchaser Purchaser Randall T. Mays............ 30 Vice President/Treasurer of Vice President/Treasurer of 200 Concord Plaza Parent; Vice President/ Parent; Vice President/ Suite 600 Treasurer of Purchaser Treasurer of Purchaser San Antonio, Texas 78216 Herbert W. Hill, Jr........ 36 Vice President/Controller of Vice President/Controller of 200 Concord Plaza Parent; Vice President/ Parent; Vice President/ Suite 600 Controller of Purchaser Controller of Purchaser San Antonio, Texas 78216 Kenneth E. Wyker........... 34 Vice President/Legal Affairs Vice President/Legal Affairs 200 Concord Plaza of Parent; Secretary of of Parent; Secretary of Suite 600 Parent; Vice President/Legal Parent; Vice President/Legal San Antonio, Texas 78216 Affairs of Purchaser; Affairs of Purchaser; Secretary of Purchaser Secretary of Purchaser Dave Ross.................. 45 Vice President and General Vice President and General 1975 E. Sunrise Blvd. Manager of WHYI-FM and Manager of WHYI-FM and Ft. Lauderdale, Florida WBGG-FM WBGG-FM 33304
33
POSITION WITH PARENT PRESENT PRINCIPAL NAME AGE AND/OR THE PURCHASER OCCUPATION OR EMPLOYMENT(1) - --------------------------- --- ------------------------------ ------------------------------ William R. Riordan......... 39 Executive Vice President and Executive Vice President and 1701 Broadway Street NE Chief Operating Officer of Chief Operating Officer of Minneapolis, Minnesota Clear Channel Television, Clear Channel Television, 55413 Inc. Inc. Josh McGraw................ 45 Vice President and General Vice President and General 8675 Hogan Road Manager of WAWS-TV Manager of WAWS-TV Jacksonville, Florida 32216 Jack Peck.................. 39 Vice President and General Vice President and General 2701 Union Ave. Manager of WPTY-TV Manager of WPTY-TV Memphis, Tennessee 38104 James Stanley Webb......... 52 Senior Vice Senior Vice c/o KPEZ FM President/Operations of President/Operations of 811 Barton Springs Drive Purchaser Purchaser Suite 697 Austin, Texas 78704
- --------------- (1) Except as noted below, all of the persons listed have served in the positions or similar positions with such entities for at least five years. (a) Mr. Mark P. Mays has been Senior Vice President of Operations of Parent since 1993. Prior thereto he was Vice President and Treasurer of the Parent for the remainder of the relevant five year period. (b) Mr. Randall Mays, prior to his election as an officer in 1993, was an associate at Goldman, Sachs & Co. Prior thereto he was a graduate student at Harvard University for the remainder of the relevant five-year period. (c) Mr. Kenneth Wyker, prior to his election as an officer in 1993, was Corporate Counsel at Greater Media for the remainder of the relevant five year period. (d) Mr. Dave Ross, prior to his election as an officer of the Parent in 1994, was Executive Vice President and General Manager of WHYI-FM under Metroplex Communications, Inc. for the remainder of the relevant five-year period. (e) Mr. William R. Riordan has been an officer of the Parent for the relevant five-year period. Mr. Riordan served as General Manager of KSAS-TV from 1990 to 1993, as General Manager of WFTC-TV from 1993 to 1995, and is currently Executive Vice President and Chief Operating Officer of Clear Channel Television, Inc. (f) Mr. Josh McGraw, prior to his election as an officer of the Parent in 1991, was employed as the Vice President and General Manager of WPXC-TV in Portland, Maine. (g) Mr. Jack Peck, prior to his election as an officer of the Parent in 1992, was employed as General Sales Manager for WPTY-TV. (2) Mr. Alan D. Feld is a director of Centerpoint Properties, Inc. (3) Mr. Theodore H. Strauss is a director of Sport Supply Group, Inc., Sizeler Property, Inc. and Hollywood Casino Corporation. (4) Mr. John H. Williams is a director of GAINSCO, Inc. 34 Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each stockholder of the Company or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below: The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Hand or Overnight Courier: Facsimile for Eligible Tender and Exchange Department Tender and Exchange Department Institutions: P. O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window (212) 815-6213 New York, New York 10286-1248 New York, New York 10286 Information Telephone: (800) 507-9357
Any questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: MORROW & CO., INC. 909 Third Avenue, 20th Floor New York, New York 10022 (212) 754-8000 Toll Free (800) 566-9058 Banks and Brokerage Firms, please call: (800) 662-5200 The Dealer Manager for the Offer is: CS First Boston Park Avenue Plaza 55 East 52nd Street New York, New York 10055 Call Toll-Free (800) 881-8320 EX-99.(A)(2) 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF CLASS A AND CLASS B COMMON STOCK OF HEFTEL BROADCASTING CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 7, 1996 BY CLEAR CHANNEL RADIO, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF CLEAR CHANNEL COMMUNICATIONS, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Facsimile Transmission: By Hand or Overnight Courier: Tender and Exchange Department (for Eligible Institutions Only) Tender and Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286-1248 For Information Telephone: New York, New York 10286 (800) 507-9357
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders of Heftel Broadcasting Corporation if certificates are to be forwarded herewith or, unless an Agent's Message (as defined in Instruction 2 hereto) is utilized, if delivery of Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). Stockholders whose certificates for Shares are not immediately available or who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase), or who cannot comply with the book-entry transfer procedures on a timely basis, may nevertheless tender their Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to a Book-Entry Transfer Facility does not constitute delivery to the Depositary. 2 DESCRIPTION OF SHARES TENDERED - -------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Owner(s) (Please Fill in, if Blank, Exactly as Name(s) Shares Tendered Appear(s) on Certificate(s) (Attach Additional List if Necessary) - --------------------------------------------------------------------------------------------------------- Total Number of Shares Number Certificate Represented by of Shares Number(s)(1) Certificate(s)(1) Tendered(2) - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- Total Shares - --------------------------------------------------------------------------------------------------------- (1) Need not be completed by stockholders tendering by book-entry transfer. (2) Unless otherwise indicated, it will be assumed that all Shares being delivered to the Depositary are being tendered. See Instruction 4.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ----------------------------------------------------------------------------- Check box of Book-Entry Transfer Facility: / / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company Account No.: - -------------------------------------------------------------------------------- Transaction Code No.: - -------------------------------------------------------------------------------- 3 / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): ----------------------------------------------------------------------------- Window Ticket Number (if any): ----------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: -------------------------------------------------------------- Name of Institution that Guaranteed Delivery: --------------------------------------------------------------------- If delivered by book-entry transfer, check box of Book-Entry Transfer Facility: / / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company Account No.: - -------------------------------------------------------------------------------- Transaction Code No.: - -------------------------------------------------------------------------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. 4 Ladies and Gentlemen: The undersigned hereby tenders to Clear Channel Radio, Inc. ("Purchaser"), a corporation organized and existing under the laws of the State of Nevada and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas corporation ("Parent"), the above-described shares of Class A Common Stock, $.001 per share (the "Class A Common Stock"), and Class B Common Stock, par value $.001 per share (the "Class B Common Stock" and together with the Class A Common Stock, the "Shares"), of Heftel Broadcasting Corporation, a corporation organized and existing under the laws of the State of Delaware (the "Company"), pursuant to the Purchaser's offer to purchase all outstanding Shares at a purchase price of $23.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in the Letter of Transmittal (which together with the Offer to Purchase constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, receipt of which is hereby acknowledged. Subject to and effective upon acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares, on the account books maintained by any of the Book-Entry Transfer Facilities, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (b) present such Shares for cancellation or transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Mark P. Mays and Kenneth E. Wyker and each of them, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to exercise all voting and other rights of the undersigned in respect of any annual, special or adjourned meeting of the Company's stockholders, or otherwise, in such manner as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper, with respect to all Shares tendered by the undersigned and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after June 1, 1996. All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by the undersigned as provided herein. Upon such acceptance for payment, all prior powers of attorney and proxies given by the undersigned with respect to such Shares or other securities or rights will, without further action, be revoked, and no subsequent powers of attorney and proxies may be given (and, if given, will not be deemed effective). The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that when the same are accepted for payment by the Purchaser, the Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Purchaser may not be required to accept for payment any of the Shares tendered hereby. Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the Offer, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal. Unless otherwise indicated under "Special Payment Instructions," please issue the check for the purchase price of any Shares purchased, and return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price of any Shares purchased and return any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and return any Shares not tendered or not purchased in the name(s) of, and mail said check and any certificates to, the person(s) so indicated. The undersigned recognizes that the Purchaser has no obligation, pursuant to the "Special Payment Instructions," to transfer any Shares from the name of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered. / / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 10. Number of Shares represented by the lost or destroyed certificates: ----------------------- 5 SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if the check for the purchase price of Shares purchased or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned, or if Shares tendered by book-entry transfer that are not purchased are to be returned by credit to an account at one of the Book-Entry Transfer Facilities. Issue: / / Check / / Shares (Check as applicable) Name: - ------------------------------------------------------ (Please Print) Address: - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ (Zip Code) - ------------------------------------------------------ (Taxpayer Identification or Social Security Number) (See Substitute Form W-9) Credit unpurchased Shares tendered by book-entry transfer to the account set forth below: Name of Account Party: - --------------------------- Account No.: - ------------------------------------ at / / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company (check one) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if the check for the purchase price of Shares purchased or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: / / Check / / Shares (Check as applicable) Name: - ------------------------------------------------------ (Please Print) Address: - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ (Zip Code) - ------------------------------------------------------ (Taxpayer Identification or Social Security Number) (See Substitute Form W-9) 6 SIGN HERE (Also Complete Substitute Form W-9 Below) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Signature(s) of Stockholder(s)) Name(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please Print) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number: - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security Number: - -------------------------------------------------------------------------------- Dated: - ---------------------- , 1996. (Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5) Authorized Signature: - -------------------------------------------------------------------------------- Name and Title: - -------------------------------------------------------------------------------- (Please Print) Name of Firm: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number: - -------------------------------------------------------------------------------- Dated: - ---------------------- , 1996 7 PAYER'S NAME: THE BANK OF NEW YORK - -------------------------------------------------------------------------------------------------------- PART 1 -- PLEASE PROVIDE YOUR TIN IN Social Security SUBSTITUTE THE BOX AT RIGHT AND CERTIFY BY SIGN- Number:________________ FORM W-9 ING AND DATING BELOW or Employer Identification Number:________________ --------------------------------------------------------------------- DEPARTMENT OF THE TREASURY PART 2 -- CERTIFICATION PART 3 -- INTERNAL REVENUE SERVICE Under penalties of perjury, I certify Awaiting TIN PAYER'S REQUEST FOR TAXPAYER that: IDENTIFICATION / / NUMBER ("TIN") (1) the Number shown on this form is my correct TIN (or I am waiting for a ----------------------- number to be issued to me); and PART 4 -- (2) I am not subject to backup withholding either because I have not Exempt TIN been notified by the Internal Revenue Service (IRS) that I am subject to / / backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. --------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS: You must cross out Item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you were no longer subject to backup withholding, do not cross out Item (2). (Also see instructions in the enclosed Guidelines). Signature: _____________________________________Date: ______________
- -------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate IRS Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments pursuant to the Offer made to me will be withheld but will be refunded if I provide a certified taxpayer identification number within 60 days. Signature: __________________________________________Date: ____________________ Name:__________________________________________________________________________ (Please print) 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this instruction, includes any participant in one of the Book-Entry Transfer Facilities' systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member or participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. If the certificates for Shares are registered in the name of a person other than the signer of this Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered owner(s) of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instruction 5. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by stockholders either if certificates are to be forwarded herewith or, unless an Agent's Message (as defined below) is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer set forth in Section 3 of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required documents, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary at one of such addresses or Shares must be delivered pursuant to the procedures for book-entry transfer set forth herein (and a Book-Entry Confirmation received by the Depositary), in each case on or prior to the Expiration Date, or (b) the tendered stockholder must comply with the guaranteed delivery procedure set forth below and in Section 3 of the Offer to Purchase. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available but are not lost or the procedure for book-entry transfer cannot be completed prior to the Expiration Date or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder may tender such Shares by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary on or prior to the Expiration Date and (c) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to all such Shares), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. A "trading day" is any day on which The Nasdaq National Market is open for business. The Notice of Guaranteed Delivery may be delivered by hand to the Depositary or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. The term "Agent's Message" means a message transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY 9 BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, new certificate(s) for the remainder of the Shares represented by the old certificate(s) will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the certificate must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of the authority of such person so to act must be submitted. 6. TRANSFER TAXES. The Purchaser will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person(s) other than the registered holder(s), or if tendered certificates are registered in the name(s) of any person(s) other than the person(s) signing this Letter of Transmittal, then the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person(s) or otherwise) payable on account of the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter of Transmittal. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued, and/or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal or if the check or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) 10 signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Any Shares tendered by book-entry transfer that are not purchased will be returned by crediting the account at the Book-Entry Transfer Facilities designated above. 8. SUBSTITUTE FORM W-9. In order to avoid "backup withholding" of Federal income tax on payments of cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the IRS may impose a $50 penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 31%. Backup withholding is not an additional income tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. The stockholder is required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner of the Shares. If the Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such stockholder if a TIN is provided to the Depositary within 60 days. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from the Information Agent or the Dealer Manager at their respective addresses or telephone numbers set forth below. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary by checking the box immediately preceding the special payment/special delivery instructions and indicating the number of Shares lost, destroyed or stolen. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY HEREOF (TOGETHER WITH CERTIFICATES OR IN THE CASE OF BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). 11 The Information Agent for the Offer is: MORROW & CO., INC. 909 Third Avenue, 20th Floor New York, New York 10022 (212) 754-8000 Toll Free (800) 566-9058 Banks and Brokerage Firms, please call: (800) 662-5200 The Dealer Manager for the Offer is: CS First Boston Park Avenue Plaza 55 East 52nd Street New York, New York 10055 Call Toll-Free (800) 881-8320 EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY TO TENDER SHARES OF CLASS A AND CLASS B COMMON STOCK OF HEFTEL BROADCASTING CORPORATION TO CLEAR CHANNEL RADIO, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF CLEAR CHANNEL COMMUNICATIONS, INC. As set forth in Section 3 of the Offer to Purchase dated June 7, 1996 (as the same may be amended from time to time, the "Offer to Purchase") of Clear Channel Radio, Inc. ("Purchaser"), a Nevada corporation and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., and in the accompanying Letter of Transmittal (the "Letter of Transmittal") and Instruction 2 thereto, this form or one substantially equivalent hereto must be used to accept the Purchaser's offer to purchase all shares of the Class A Common Stock, par value $.001 per share, and the Class B Common Stock, $.001 per share (collectively, the "Shares") of Heftel Broadcasting Corporation, a Delaware corporation (the "Company"), at $23.00 per Share, net to the seller in cash without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") if (i) certificates representing Shares to be tendered for purchase and payment are not lost but are not immediately available, (ii) time will not permit all required documents to reach the Depositary prior to the Expiration Date (as defined below), or (iii) the procedures for book-entry transfer cannot be completed prior to the Expiration Date. This form may be delivered by an Eligible Institution (as defined in the Offer to Purchase) by mail or hand delivery or transmitted, via facsimile, to the Depositary as set forth below. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Offer to Purchase. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Facsimile Transmission: By Hand or Overnight Courier: Tender and Exchange Department (for Eligible Institutions Only) Tender and Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286-1248 For Information Telephone: New York, New York 10286 (800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 LADIES AND GENTLEMEN: The undersigned hereby tenders to the Purchaser upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the Shares of the Company set forth below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. PLEASE COMPLETE AND SIGN Signatures of Registered Owner(s) Date: or Authorized Signatory: ------------------------------------------ - ----------------------------------------------- - ----------------------------------------------- Address: - ----------------------------------------------- --------------------------------------- Name(s) of Registered Owner(s): ----------------------------------------------- - ----------------------------------------------- Area Code and Telephone No.: - ----------------------------------------------- ------------------- - ----------------------------------------------- If Shares will be delivered by book-entry Number of Shares Being Tendered Hereby: transfer, check trust company below: - ----------------------------------------------- - ----------------------------------------------- / / The Depository Trust Company Certificate No.(s) of Shares (if available): / / Midwest Securities Trust Company - ----------------------------------------------- - ----------------------------------------------- / / Philadelphia Depository Trust Company Depository Account No.: ------------------------
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program, hereby (a) represents that the tender of Shares effected hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b) guarantees to deliver to the Depositary either the certificates evidencing all tendered Shares, in proper form for transfer, or to deliver Shares pursuant to the procedure for book-entry transfer into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility"), in either case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three Nasdaq National Market trading days after the date hereof. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm: ---------------------------------- AUTHORIZED SIGNATURE - ----------------------------------------------- --------------------------- Address: --------------------------------------- PLEASE PRINT - ----------------------------------------------- Name: - ----------------------------------------------- ------------------------------------------ Zip Code Title: ----------------------------------------- Dated: Area Code and Tel. No.: ---------------------------------- , 1996 ------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE; CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(4) 5 LETTER TO BROKER DEALERS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A AND CLASS B COMMON STOCK OF HEFTEL BROADCASTING CORPORATION AT $23.00 NET PER SHARE BY CLEAR CHANNEL RADIO, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF CLEAR CHANNEL COMMUNICATIONS, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THIS OFFER IS EXTENDED. June 7, 1996 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Clear Channel Radio, Inc. ("Purchaser"), a Nevada corporation and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., to act as Dealer Manager in connection with the Purchaser's offer to purchase all shares of Class A Common Stock, $.001 par value per share ("Class A Common Stock"), and Class B Common Stock, $.001 par value per share ("Class B Common Stock" and together with the Class A Common Stock, the "Shares"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, together constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares in your name or in the name of your nominee. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated June 7, 1996. 2. The Letter of Transmittal to tender Shares for your use and for the information of your clients. Facsimile copies of the Letter of Transmittal (with manual signature) may be used to tender Shares. 3. The Notice of Guaranteed Delivery to be used to accept the Offer in the circumstances described below. 4. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such client's instructions with regard to the Offer. 5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 6. A return envelope addressed to The Bank of New York, the Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED. 2 Please note the following: 1. The Offer Price is $23.00 per Share, net to the seller in cash without interest thereon. 2. The Offer is being made for all outstanding Shares. 3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Tuesday, July 16, 1996, unless the Offer is extended. 4. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions. 5. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the transfer of Shares pursuant to the Offer. In all cases, payment for Shares accepted for purchase pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares or timely confirmation of the book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in the Offer to Purchase), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter of Transmittal (or facsimile thereof) properly completed and duly executed with any required signature guarantees, and (c) any other documents required by the Letter of Transmittal. If a stockholder desires to tender Shares pursuant to the Offer, and if (a) certificates representing the Shares to be tendered for purchase and payment are not lost but are not immediately available, (b) the procedures for book-entry transfer cannot be completed prior to the Expiration Date or (c) time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder may tender Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. The Purchaser will not pay any fees or commissions to brokers, dealers or other persons (other than the Dealer Manager, Information Agent and Depositary, as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Questions and requests for assistance with respect to the Offer or for copies of the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent or Dealer Manager at the addresses and telephone numbers set forth on the outside back cover page of the Offer to Purchase. Very truly yours, CS First Boston Corporation NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF PURCHASER, THE DEPOSITARY, THE INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. EX-99.(A)(5) 6 LETTER TO CLIENTS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A AND CLASS B COMMON STOCK OF HEFTEL BROADCASTING CORPORATION AT $23.00 NET PER SHARE BY CLEAR CHANNEL RADIO, INC. AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF CLEAR CHANNEL COMMUNICATIONS, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 16, 1996, UNLESS THIS OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer"), relating to an offer by Clear Channel Radio, Inc. ("Purchaser"), a Nevada corporation and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., to purchase all outstanding shares of the Class A Common Stock, par value $.001 per share ("Class A Common Stock"), and the Class B Common Stock, $.001 per share ("Class B Common Stock" and together with the Class A Common Stock, the "Shares") of Heftel Broadcasting Corporation, a Delaware corporation (the "Company"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer. This material is being forwarded to you as the beneficial owner of Shares carried by us in your account but not registered in your name. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to tender any or all of the Shares held by us for your account, upon the terms and conditions set forth in the Offer. Please note the following: 1. The tender price is $23.00 per Share, net to you in cash. 2. The Offer is being made for all Shares. 3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Tuesday, July 16, 1996, unless the Offer is extended. 4. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other terms and conditions. 5. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the transfer of Shares pursuant to the Offer. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form contained in this letter. An envelope to return your instructions to us is enclosed. If 2 you authorize tender of your Shares, all such Shares will be tendered unless otherwise indicated in such instruction form. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and any supplements or amendments thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares residing in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the securities laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase, dated June 7, 1996, and the related Letter of Transmittal (which together constitute the "Offer") relating to the Offer by Clear Channel Radio, Inc., a Nevada corporation and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas corporation, to purchase all shares of the Class A Common Stock, par value $.001 per share, and the Class B Common Stock, $.001 par value per share, of Heftel Broadcasting Corporation, a Delaware corporation (collectively, the "Shares"). You are instructed to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. NUMBER OF SHARES TO BE TENDERED: SHARES ---------------------- ACCOUNT NUMBER: --------------------------------------------- DATED: , 1996 ------------------- SIGN HERE SIGNATURE(S): ------------------------------------------------------------------ PRINT NAME(S): ----------------------------------------------------------------- - -------------------------------------------------------------------------------- PRINT ADDRESS(ES): ------------------------------------------------------------- - -------------------------------------------------------------------------------- AREA CODE AND TELEPHONE NO.: --------------------------------------------------- TAXPAYER ID NO. OR SOCIAL SECURITY NO.: ---------------------------------------- UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN A SIGNED SCHEDULE ATTACHED HERETO, YOUR SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR SHARES. EX-99.(A)(6) 7 PRESS RELEASE 1 EXHIBIT 99(a)(6) [Clear Channel CLEAR CHANNEL Logo] FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT: RANDALL MAYS (210) 822-2828 CLEAR CHANNEL TO TENDER FOR HEFTEL San Antonio, Texas, June 2, 1996 . . . Lowry Mays, President and Chief Executive Officer of Clear Channel Communications, Inc. and Cecil Heftel, Chairman of Heftel Broadcasting Corporation jointly announced today that Clear Channel Radio, Inc. has agreed to make a tender offer for all of the shares of Heftel Broadcasting Corporation, not beneficially owned by Clear Channel, for $23.00 per share in cash. Concurrently, management of Heftel has agreed to sell its shares (which represents approximately 40% of the outstanding stock of Heftel Broadcasting) to Clear Channel at the tender price. The transaction is subject to the approval of the Federal Communications Commission and the Federal Trade Commission. Mr. Mays said, "We are excited to increase our investment in Heftel Broadcasting and its presence in the fast growing Spanish language broadcasting sector." Mr. Heftel said, "I am very optimistic about the future of Heftel Broadcasting under the leadership of Clear Channel. I am also reassured by knowing that Clear Channel will carry on the traditions and standards which have been established in each of the cities that Heftel Broadcasting serves." Clear Channel is a diversified broadcasting company which currently owns approximately 21% of Heftel Broadcasting and, including pending acquisitions, owns and/or operates 96 other radio stations and 17 television stations in the United States. Clear Channel also has broadcasting operations in Australia and New Zealand. Its stock is traded on the New York Stock Exchange under the symbol CCU. 2 Heftel Broadcasting is a Spanish language broadcasting company operating ratio stations in New York, Los Angeles, Chicago, Dallas, Miami, and Las Vegas. Its stock is traded on the NASDAQ under the symbol HBCCA. Phone (210) 822-2828 o Fax (210) 822-2299 200 Concord Plaza o Suite 600 o San Antonio, TX 78216-6940 EX-99.(A)(7) 8 GUIDELINES FOR TAXPAYER INDENTIFICATION 1 EXHIBIT 99(a)(7) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER--Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.
- ------------------------------------------------------------------------------------------------------------------- Give the SOCIAL Give the EMPLOYER For this type of account: SECURITY For this type of account: IDENTIFICATION number of-- number of-- - ------------------------------------------------------------------------------------------------------------------- 1. An individual's account The individual 9. A valid trust, estate, or Legal entity (Do 2. Two or more individuals (joint The actual owner of pension trust not furnish the account) the account or, if identification combined funds, the number of the first individual on personal the account(1) representative or 3. Husband and wife (joint The actual owner of trustee unless the account) the account or, if legal entity itself joint funds, either is not designated person(1) in the account 4. Custodian account of a minor The minor(2) title.)(4) (Uniform Gift to Minors Act) 10. Corporate account The corporation 5. a. The usual revocable savings The 11. Association, club, religious, The organization trust account (grantor is grantor-trustee(1) charitable, educational also trustee) organization or other b. So-called trust account that The actual owner(1) tax-exempt organization ac- is not a legal or valid count trust under State law 12. Partnership account The partnership 6. Sole proprietorship account The owner(3) 13. A broker or registered nominee The broker or nomi- 7. Account in the name of guardian The ward, minor or nee or committee for a designated incompetent 14. Account with the Department of The public entity ward, minor or incompetent person(5) Agriculture in the name of a person public entity (such as a State 8. Adult and minor (joint account) The adult or, if or local government, school the minor is the district, or prison) that only contributor, receives agricultural program the minor(1) payments - -------------------------------------------------------------------------------------------------------------------
(1)List first and circle the name of the person whose number you furnish. (2)Circle the minor's name and furnish the minor's social security number. (3)Show the name of the owner. You may also list the name of the business. You may use either the social security or employer identification number. (4)List first and circle the name of the legal trust, estate, or pension trust. (5)Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. NOTE:If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER If you don't have a taxpayer identification number ("TIN") or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding and information reporting on MOST payments include the following: 1. A corporation. 2. A financial institution. 3. An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7). 4. The United States or any agency or instrumentality thereof. 5. A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. 6. A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. 7. An international organization or any agency or instrumentality thereof. 8. A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. 9. A real estate investment trust. 10. A common trust fund operated by a bank under section 584(a). 11. An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). 12. An entity registered at all times under the Investment Company Act of 1940. 13. A foreign central bank of issue. 14. A futures commission merchant registered with the Commodity Futures Trading Commission. 15. A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. For interest and dividends, a futures commission merchant registered with the Commodity Futures Trading Commission is NOT exempt. For broker transactions, payees listed in items (11) and (15) are NOT exempt. Payments subject to reporting under sections 6041 and 6041A are exempt only if made to payees listed in items (1), (3), (4), (5), (6), (7) and (13), except a corporation that provides medical and health care services or bills and collects payments for such services. Only payees listed in items (3) through (7) are exempt from backup withholding for barter exchange transactions, patronage dividends and payments by certain fishing boat operators. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. NOTE: You may be subject to withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct TIN to the payer. - Payments of tax-exempt interest (including exempt interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments of mortgage interest. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. Nonresident aliens and foreign entities not subject to backup withholding should also furnish a completed Form W-8. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest, or other payments to give TINs to payers who must report the payments to IRS. TINs also must be given to persons who must report to the IRS on mortgage interest paid, the acquisition or abandonment of secured property and contributions to an individual retirement account. IRS uses TINs for identification purposes and to verify the accuracy of tax returns. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who has not furnished a TIN to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.-- If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.-- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS EX-99.(A)(8) 9 SUMMARY ADVERTISEMENT 1 Exhibit 99(a)(8) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated June 7, 1996, and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction the securities or other laws of which require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed made on behalf of the Purchaser by CS First Boston Corporation ("CS First Boston") or one or more registered brokers or dealers licensed under the laws of such jurisdiction Notice of Offer to Purchase for Cash All Outstanding Shares of Class A and Class B Common Stock of Heftel Broadcasting Corporation at $23.00 NET PER SHARE by Clear Channel Radio, Inc. an indirect wholly-owned subsidiary of Clear Channel Communications, Inc. Clear Channel Radio, Inc., a corporation organized and existing under the laws of the State of Nevada (the "Purchaser") and an indirect wholly-owned subsidiary of Clear Channel Communications, Inc., a Texas corporation ("Parent"), is offering to purchase all outstanding shares (the "Shares") of Class A Common Stock, par value $.001 per share (the "Class A Common Stock"), and Class B Common Stock, par value $.001 per share (the "Class B Common Stock" and together with the Class A Common Stock, the "Common Stock"), of Heftel Broadcasting Corporation, a corporation organized and existing under the laws of the State of Delaware (the "Company"), at a price of $23.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 7, 1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME ON TUESDAY, JULY 16, 1996, UNLESS THE OFFER IS EXTENDED. The Offer is not conditioned upon any minimum number of Shares being tendered, but is subject to certain other conditions, including receipt of certain consents from the Federal Communications Commission and the expiration or termination of the waiting period applicable to the Purchaser's acquisition of Shares under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Offer is being made pursuant to a Tender Offer Agreement, dated June 1, 1996, as amended (the "Tender Offer Agreement"), by and between the Purchaser and the Company pursuant to which the Purchaser has agreed to make the Offer. The Purchaser has also entered into a Stockholder Purchase Agreement dated June 1, 1996 (the "Stockholder Purchase Agreement") with certain stockholders of the Company who own in the aggregate 3,516,529 Shares. Subject to the terms and conditions of the Stockholder Purchase Agreement, the stockholders who are parties thereto have agreed to sell their Shares to the Purchaser. Such stockholders also own options and warrants to acquire an aggregate of 1,156,017 Shares and have agreed to tender such Shares pursuant to the Offer. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND DETERMINED THAT THE OFFER IS IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY. Pursuant to the Tender Offer Agreement, the Purchaser has agreed for a period of one year from and after the closing of the Offer to use its best efforts to cause the Shares of Class A Common Stock to remain listed or quoted on a recognized national exchange or National Association of Securities Dealers, Inc. quotation system. 2 For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not withdrawn as, if and when the Purchaser gives oral or written notice to The Bank of New York (the "Depositary") of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting such payment to tendering stockholders whose shares have been accepted for payment. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, a message transmitted by a Book-Entry Transfer Facility that the participant therein has agreed to be bound by the terms of the Letter of Transmittal, and (iii) all other documents required by the Letter of Transmittal. Under no circumstances will interest on the purchase price for Shares be paid regardless of any delay in making payment or any extension of the time during which the Offer is open. If any tendered Shares are not purchased for any reason or if certificates are submitted for more Shares than are tendered, certificates for such Shares not purchased or tendered will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility, such Shares will be credited to an account maintained at the appropriate Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. The term "Expiration Date" means 12:00 Midnight, New York City time, on July 16, 1996, unless the Purchaser, in accordance with the terms of the Offer and the Tender Offer Agreement, shall have extended the period of time which the Offer is open, in which event such terms shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Pursuant to the Tender Offer Agreement, if at any time on or prior to July 16, 1996, the number of Shares tendered pursuant to the Offer when combined with Shares owned by the Purchaser's affiliates total 80% of the outstanding Common Stock, the Purchaser shall publish notice of such fact and extend the Expiration Date by ten days. The Purchaser expressly reserves the right, subject to the terms and conditions of the Tender Offer Agreement, which requires the consent of the Company, at any time and from time to time, to extend the period of time during which the Offer is open, including the occurrence of any conditions specified in Section 14 of the Offer to Purchase, by giving oral or written notice of such extension to the Depositary. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and to the rights of a tendering stockholder to withdraw such stockholder's Shares. Any such extension will be followed as promptly as practicable by public announcement thereof, such announcement to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Purchaser may choose to make any public announcement, except as required by law, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment pursuant to the Offer, may also be withdrawn at any time after August 5, 1996. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name in which the certificates representing such Shares are registered, if different from that of the person who tendered the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered for the account of an Eligible Institution (as defined in the Offer to Purchase), the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer, any notice of withdrawal must also specify the name and number of the account at the applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's procedures. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, and its determination will be final and binding on all parties. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer, but may be retendered at any subsequent time prior to the Expiration Date by following any of the procedures described in Section 3 of the Offer to Purchase. The information required to be disclosed by Rule 14d-6(e)(1) (vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal and, if required, any other relevant materials will be mailed to record holders of Shares whose names appear on the Company's stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Requests for copies of the Offer to Purchase, the Letter of Transmittal and the other tender offer documents may be directed to the Information Agent or the Dealer Manager as set forth below, and copies will be furnished promptly at the Purchaser's expense. No fees or commissions will be paid to brokers, dealers or other persons (other than the Dealer Manager and Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: MORROW & CO., INC. 909 Third Avenue, 20th Floor New York, New York 10022 (212) 754-8000 Toll Free (800) 566-9058 Banks and Brokerage Firms, please call: (800) 662-5200 The Dealer Manager for the Offer is: CS FIRST BOSTON Park Avenue Plaza 55 East 52nd Street New York, New York 10055 Call Toll-Free (800) 881-8320 June 7, 1996 EX-99.(B) 10 AMENDED AND RESTATED CREDIT AGREEMENT 1 EXHIBIT 99(b) ================================================================================ $600,000,000 AMENDED AND RESTATED CREDIT AGREEMENT AMONG CLEAR CHANNEL COMMUNICATIONS, INC. CERTAIN LENDERS AND NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER October 19, 1995 ================================================================================ 2 TABLE OF CONTENTS Page ---- ARTICLE 1 Definitions Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . 1 Section 1.2 Amendments and Renewals . . . . . . . . . . . . . . . 19 Section 1.3 Construction . . . . . . . . . . . . . . . . . . . . 19 ARTICLE 2 Advances Section 2.1 The Advances . . . . . . . . . . . . . . . . . . . . 19 Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . 20 Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . 23 Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 2.5 Prepayment . . . . . . . . . . . . . . . . . . . . . 26 Section 2.6 Reduction and Change of Commitment . . . . . . . . . 27 Section 2.7 Non-Receipt of Funds by the Administrative Lender . . 28 Section 2.8 Payment of Principal of Advances . . . . . . . . . . 29 Section 2.9 Reimbursement . . . . . . . . . . . . . . . . . . . . 29 Section 2.10 Manner of Payment . . . . . . . . . . . . . . . . . . 30 Section 2.11 LIBOR Lending Office . . . . . . . . . . . . . . . . 30 Section 2.12 Sharing of Payments . . . . . . . . . . . . . . . . . 31 Section 2.13 Calculation of LIBOR Rate . . . . . . . . . . . . . . 31 Section 2.14 Booking Loans . . . . . . . . . . . . . . . . . . . . 31 Section 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 2.16 Letters of Credit . . . . . . . . . . . . . . . . . . 34 ARTICLE 3 Conditions Precedent Section 3.1 Conditions Precedent to Closing and the Initial Advance and the Letter of Credit . . . . . . . . . . 41 Section 3.2 Conditions Precedent to All Advances and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 43 ARTICLE 4 Representations and Warranties Section 4.1 Representations and Warranties . . . . . . . . . . . 44 3 Section 4.2 Survival of Representations and Warranties, etc . . . . . . 50 ARTICLE 5 General Covenants Section 5.1 Preservation of Existence and Similar Matters. . . . . . . . 51 Section 5.2 Business; Compliance with Applicable Law . . . . . . . . . . 51 Section 5.3 Maintenance of Properties. . . . . . . . . . . . . . . . . . 51 Section 5.4 Accounting Methods and Financial Records . . . . . . . . . . 51 Section 5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 51 Section 5.6 Payment of Taxes and Claims. . . . . . . . . . . . . . . . . 52 Section 5.7 Visits and Inspections . . . . . . . . . . . . . . . . . . . 52 Section 5.8 Payment of Indebtedness. . . . . . . . . . . . . . . . . . . 52 Section 5.9 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 52 Section 5.10 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 52 Section 5.11 Environmental Law Compliance . . . . . . . . . . . . . . . . 54 ARTICLE 6 Information Covenants Section 6.1 Quarterly Financial Statements and Information . . . . . . . 55 Section 6.2 Annual Financial Statements and Information; Certificate of No Default. . . . . . . . . . . . . . . . . . 55 Section 6.3 Compliance Certificates. . . . . . . . . . . . . . . . . . . 56 Section 6.4 Copies of Other Reports and Notices. . . . . . . . . . . . . 56 Section 6.5 Notice of Litigation, Default and Other Matters. . . . . . . 57 Section 6.6 ERISA Reporting Requirements . . . . . . . . . . . . . . . . 58 ARTICLE 7 Negative Covenants Section 7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 59 Section 7.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Section 7.3 Investments. . . . . . . . . . . . . . . . . . . . . . . . . 60 Section 7.4 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . 61 Section 7.5 Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries . . . . . . . . . . . . . . 62 Section 7.6 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . 63 Section 7.7 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . 63 Section 7.8 Affiliate Transactions . . . . . . . . . . . . . . . . . . . 63 Section 7.9 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . 63 ii 4 Section 7.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . 64 Section 7.11 Fixed Charges Coverage Ratio . . . . . . . . . . . . . . . 64 Section 7.12 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . 64 Section 7.13 Debt Service Coverage Ratio . . . . . . . . . . . . . . . . 64 Section 7.14 Capital Stock of the Borrower . . . . . . . . . . . . . . . 64 Section 7.15 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . 65 Section 7.16 Sale or Discount of Receivables . . . . . . . . . . . . . . 65 Section 7.17 Business of Television Licenses and Radio Licenses and Metroplex Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 65 Section 7.18 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . 65 ARTICLE 8 Default Section 8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 66 Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 69 ARTICLE 9 Changes in Circumstances Section 9.1 LIBOR Basis Determination Inadequate . . . . . . . . . . . . . . . . . . . . . . . . 70 Section 9.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . 70 Section 9.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 71 Section 9.4 Effect On Base Rate Advances . . . . . . . . . . . . . . . 72 Section 9.5 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . 72 ARTICLE 10 AGREEMENT AMONG LENDERS Section 10.1 Agreement Among Lenders . . . . . . . . . . . . . . . . . . 73 Section 10.2 Lender Credit Decision . . . . . . . . . . . . . . . . . . 75 Section 10.3 Benefits of Article . . . . . . . . . . . . . . . . . . . . 75 ARTICLE 11 Miscellaneous Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 76 Section 11.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Section 11.4 Determination by the Lenders Conclusive and Binding . . . . . . . . . . . . . . . . . . 77
5 Schedules and Exhibits Schedule 1: LIBOR Lending Offices Schedule 2: Existing Liens Schedule 3: Existing Litigation Schedule 4: Licenses, Permits and Other Authorizations Schedule 5: Rights Relating to Pledged Stock Schedule 6: Existing Guaranties Schedule 7: Subsidiaries Schedule 8: Existing Investments Schedule 9: Existing Indebtedness Schedule 10: Guaranties Schedule 11: Material Adverse Changes Exhibit A: Revolving Credit Note Exhibit B: Bid Rate Note Exhibit C: Borrower Pledge Agreement Exhibit D: Subsidiary Pledge Agreement (Third Tier) Exhibit E: Subsidiary Pledge Agreement (Holdings) Exhibit F: Intentionally Omitted Exhibit G: Subsidiary Guaranty Exhibit H: Compliance Certificate Exhibit I: Assignment and Acceptance Exhibit J: Subsidiary Pledge Agreement (Second Tier) iv 6 AMENDED AND RESTATED CREDIT AGREEMENT THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October 19,1995, among CLEAR CHANNEL COMMUNICATIONS, INC., a Texas corporation ("Borrower"), the Lenders from time to time party hereto, and NATIONSBANK OF TEXAS, N.A., a national banking association, as administrative agent for the Lenders. BACKGROUND The Borrower and lenders entered into that certain Credit Agreement dated as of September 30, 1994 in the maximum principal amount of $350,000,000 (said Credit Agreement, as amended, the "Existing Credit Agreement"). The Borrower has requested that the Lenders amend and restate the Existing Credit Agreement by making a credit facility available to the Borrower up to the maximum principal amount of $600,000,000. The Lenders have agreed to do so, subject to the terms and conditions set forth below. In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration hereby acknowledged, the parties hereto agree that the Existing Credit Agreement is being amended and restated as follows: ARTICLE 1 Definitions Section 1.1 Defined Terms. For purposes of this Agreement: "ARN" shall mean the Australian Radio Network Limited, PTY, an Australian propriety company, 50% of whose Capital Stock is owned by the Borrower. "ARN Investment" shall mean the investment by the Borrower in at least 50% of the Capital Stock of ARN. "Additional Costs" shall have the meaning set forth in Section 9.5 hereof. "Administrative Lender" shall mean NationsBank of Texas, N.A., a national banking association, as administrative agent for Lenders, or such successor administrative agent appointed pursuant to Section 10.1(b) hereof. "Advance" shall mean a Revolving Credit Advance or aBid Rate Advance and "Advances" means Revolving Credit Advances and Bid Rate Advances. 7 "Affiliate" shall mean any Person that directly or indirectly through one or more Subsidiaries Controls, or is Controlled By or Under Common Control with, the Borrower. "Affiliation Agreements" shall mean all affiliation agreements of the Borrower and each Subsidiary with Fox Broadcasting. "Agreement" shall mean this Credit Agreement, as amended or renewed from time to time. "Agreement Date" shall mean the date of this Agreement. "Amortization Date" shall mean the last Business Day of December 1998. "Applicable Environmental Laws" shall mean applicable laws pertaining to health or the environment, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (as amended from time to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid Waste Disposal Act. "Applicable Law" shall mean (a) in respect of any Person, all provisions of constitutions, statutes, rules, regulations, courts and orders of governmental bodies or regulatory agencies applicable to such Person and its properties, including, without limiting the foregoing, all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party, and (b) in respect of contracts relating to interest or finance charges that are made or performed in the State of Texas, "Applicable Law" shall mean the laws of the United States of America, including without limitation 12 USC 85 and 86, as amended from time to time, and any other statute of the United States of America now or at any time hereafter prescribing the maximum rates of interest on loans and extensions of credit, and the laws of the State of Texas, including, without limitation, Article 50691.04, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art. 1.04"), and any other statute of the State of Texas now or at any time hereafter prescribing maximum rates of interest on loans and extensions of credit; provided that the parties hereto agree that the provisions of Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to Advances, this Agreement, the Notes or any other Loan Documents. "Applicable Margin" shall mean the following per annum percentages, applicable in the following situations:
Applicability Base Rate LIBOR Basis Basis (i) If the Leverage Ratio is not less than 5.0 to 1 0.25 1.2500
2 8 (ii) If the Leverage Ratio is less than 5.0 to 1 but is not less than 4.5 to 1 0.00 1.0000 (iii) If the Leverage Ratio is less than 4.5 to 1 but is not less than 4.0 to 1 0.00 0.7500 (iv) If the Leverage Ratiois less than 4.0 to 1 but is not less than 3.5 to 1 0.00 0.6250 (v) If the Leverage Ratio is less than 3.5 to 1 but is not less than 3.0 to 1 0.00 0.5000 (vi) If the Leverage Ratio is less than 3.0 to 1 but is not less than 2.0 to 1 0.00 0.4375 (vii) If the Leverage Ratio is less than 2.0 to 1 0.00 0.3750
The Applicable Margin payable by the Borrower on the Revolving Credit Advances outstanding hereunder shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Borrower as tested by the Leverage Ratio. Except as set forth in the last sentence hereof, any such increase or reduction in the Applicable Margin provided for herein shall be effective three Business Days after receipt by Administrative Lender of the applicable financial statements. If financial statements of the Borrower setting forth the Leverage Ratio are not received by the Administrative Lender by the date required pursuant to Section 6.1 hereof, the Applicable Margin shall be determined as if the Leverage Ratio is not less than 5.0 to 1 until such time as such financial statements are received. For the final quarter of any fiscal year of the Borrower, the Borrower may provide its unaudited financial statements, subject only to year-end adjustments, for the purpose of adjusting the Applicable Margin. Notwithstanding anything above to the contrary, if the compliance certificate required to be delivered pursuant to Section 7.5(b) hereof prior to any proposed acquisition indicates that the Leverage Ratio after giving effect to the proposed acquisition would result in an adjustment of the Applicable Margin, the Applicable Margin shall be increased or decreased, as the case may be, as of the date of such acquisition. "Art. 1.04" shall have the meaning ascribed thereto in the definition of "Applicable Law." "Assignees" shall mean any assignee of a Lender pursuant to an Assignment Agreement and shall have the meaning ascribed thereto in Section 11.6 hereof. "Assignment Agreement" shall have the meaning ascribed thereto in Section 11.6 hereof. "Authorized Signatory" shall mean such senior personnel of the Borrower as may be duly authorized and designated in writing by the Borrower to execute documents, agreements and instruments on behalf of the Borrower, and to request Advances and Letters of Credit hereunder. 3 9 "Base Rate Advance" shall mean any Revolving Credit Advance bearing interest at the Base Rate Basis. "Base Rate Basis" shall mean, for any day, a per annum interest rate equal to the lesser of (a) the Highest Lawful Rate on such day, or (b) the higher of (i) the sum of (A) 0.50% plus (B) the Federal Funds Rate plus (C) the Applicable Margin, or (ii) the sum of (A) the Prime Rate on such day plus (B) the Applicable Margin. The Base Rate Basis shall be adjusted automatically as of the opening of business on the effective date of each change in the Prime Rate or Federal Funds Rate, as the case may be, to account for such change. "Bid Rate Advance" shall mean an Advance the interest rate on which is determined by agreement between the Borrower and the Lender making such Advance pursuant to Section 2.1(b) hereof. "Bid Rate Note" shall mean each promissory note of the Borrower evidencing Bid Rate Advances, substantially in the form of Exhibit B hereto, together with any extension, renewal or amendment thereof or substitution therefor. "Borrower" shall mean Clear Channel Communications, Inc., a Texas corporation. "Borrower Pledge Agreement" shall mean one or more pledge agreements, executed by the Borrower, granting a Lien on (i) the Pledged Stock owned directly by the Borrower and (ii) the Holdings Noteas security for the Obligations, substantially in the form of Exhibit C hereto, as such agreement may be amended, modified, renewed or extended from time to time. "Business Day" shall mean a day on which banks are open for the transaction of business as required by this Agreement in Dallas, Texas and New York, New York and, with respect to any LIBOR Advance, in London, England, and as otherwise relevant to the determination to be made or the action to be taken. "Capital Expenditures" shall mean expenditures for the purchase of tangible assets of longtermuse which are capitalized in accordance with GAAP; provided, however, Capital Expenditures shall not include assets acquired through trade without any expenditure of cash, such trade capital expenditures not to exceed $3,000,000 in aggregate value per year, such valuation to be determined using the lesser of the fair market value of assets received or the value of air-time run in exchange for the assets received. "Capital Stock" shall mean, as to any Person, the equity interests in such Person, including, without limitation, the shares of each class of capital stock of any Person that is a corporation and each class of partnership interests (including, without limitation, general, limited and preference units) in any Person that is a partnership. 4 10 "Capitalized Lease Obligations" shall mean that portion of any obligation of the Borrower or any Restricted Subsidiary as lessee under a lease which at the time would be required to be capitalized on a balance sheet prepared in accordance with GAAP. "CCC-Houston" shall mean CCC-Houston AM, Ltd., a Texas limited partnership and a Subsidiary of Borrower. "CCRE" shall mean Clear Channel Real Estate, Inc., a Nevada corporation, and a wholly-owned Subsidiary of Holdings. "CCRE Note" shall mean that certain promissory note of CCRE payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by the Holdings to CCRE, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "CCR Houston-Nevada" shall mean CCR Houston Nevada, Inc., a Nevada corporation, and a whollyowned Subsidiary of Radio. "CCR Houston-Nevada Note" shall mean that certain promissory note of CCR Houston-Nevada payable to the order of Radio in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by the Radio to CCR Houston- Nevada, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Collateral" shall mean the Pledged Stock, the Intercompany Notes and any other collateral hereafter granted by any Person to the Administrative Lender for the benefit of the Lenders to secure the Obligations and all proceeds thereof. "Commitment" shall mean $600,000,000, as reduced from time to time pursuant to Section 2.6 hereof. "Communications Act" shall mean, collectively, the Communications Act of 1934, as amended and the rules and regulations promulgated thereunder, as from time to time in effect. "Control" or "Controlled By" or "Under Common Control" shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise); provided, however, that (a) in the event that no one Person owns more than 50% of the outstanding Capital Stock of a corporation or entity, any Person which beneficially owns, directly or, by contract or law, indirectly, 10% or more (in number of votes) of the securities having ordinary voting power for the election of directors of such corporation shall be conclusively presumed to control such corporation or (b) in the event that one Person owns greater than 50% of the outstanding Capital 5 11 Stock of a corporation, any Person which beneficially owns, directly or, by contract or law, indirectly, greater than 20% or more (in number of votes) of the securities having ordinary voting power for the election of directors of such corporation shall be conclusively presumed to control such corporation. "Controlled Group" shall mean, as to any Person, all members ofa controlled group of corporations and all trades or businesses (whether or not incorporated) which are under common control with such Person and which, together with such Person, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code; provided, however, that the Subsidiaries of the Borrower shall be deemed to be members of the Borrower's Controlled Group, and the Borrower and any other entities (whether incorporated or not incorporated) which are under common Control with the Borrower and which, together with the Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code, shall be deemed to be members of the Borrower's Controlled Group on and after the Agreement Date. "Default" shall mean an Event of Default and/or any of the events specified in Section 8.1, regardless of whether there shall have occurred any passage of time or giving of notice that would be necessary in order to constitute such event an Event of Default. "Default Rate" shall mean a simple per annum interest rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum of the Base Rate Basis plus two percent. "Determining Lenders" shall mean, on any date of determination, any combination of the Lenders having at least 51% of the aggregate amount of the Revolving Credit Advances then outstanding; provided, however, that if there are no Revolving Credit Advances outstanding hereunder, "Determining Lenders" shall mean any combination of Lenders whose Specified Percentages aggregate at least 51%. "Dividend" shall mean, as to any Person, (a) any declaration or payment of any dividend (other than a dividend paid solely in shares of the common stock of such Person) on, or the making of any distribution, loan, advance or investment to or in any holder of, any shares of Capital Stock of such Person (other than salaries and bonuses paid in the ordinary course of business), or (b) any purchase, redemption, or other acquisition or retirement for value of any shares of Capital Stock of such Person; provided, however, that the acquisition of shares of Capital Stock of such Person for the purpose of acquiring a Subsidiary (whether by merger, consolidation, asset acquisition, stock acquisition, or otherwise) shall not be deemed a Dividend if (a) such shares are used as a portion or all of the purchase price for the acquisition of a Subsidiary within a period of ninety days from the date the initial shares of such Capital Stock were acquired and (b) such Person shall have given the Administrative Lender prior written notice of its intention to acquire such Capital Stock for the purpose of acquiring a Subsidiary. "Equity" shall mean shares of Capital Stock, or options, warrants or any other right to subscribe for or otherwise acquire Capital Stock, of the Borrower or any Subsidiary. 6 12 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any regulation promulgated thereunder. "ERISA Event" shall mean, with respect to the Borrower and its Subsidiaries, (a) a Reportable Event (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under regulations issued under Section 4043 of ERISA), (b) the withdrawal of any such Person or any member of its Controlled Group from a Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate under Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) the failure to make required contributions which could result in the imposition of a lien under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or the imposition of any liability under Title IV of ERISA other than PBGC premiums due but not delinquent under Section 4007 of ERISA. "Event of Default" shall mean any of the events specified in Section 8.1, provided that any requirement for notice or lapse of time has been satisfied. "Excess Cash Flow" shall mean, for any year, calculated for the Borrower and its Restricted Subsidiaries on a consolidated basis, an amount equal to the remainder of (a) Operating Cash Flow for said year, minus (b) the sum of (i) Capital Expenditures for said year, plus (ii) cash expenditures for the payment of taxes for said year, plus (iii) principal, interest and fees scheduled to be paid and paid for said year with respect to Indebtedness. "Existing Credit Agreement" shall mean that certain Credit Agreement dated as of September 30, 1994, by and among the Borrower, NationsBank of Texas, N.A., as Administrative Lender, and the lenders party thereto, as the same may have been amended, modified, renewed or extended from time to time. "FCC" shall mean the Federal communications Commission, or any governmental agency succeeding to the functions thereof. "Federal Funds Rate" shall mean, for any day, the rate per annum (rounded upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Lender on such day on such transactions as determined by Administrative Lender. 7 13 "Fixed Charges" shall mean, for the Borrower and its Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP, for the four most recently ended fiscal quarters preceding any date of determination, an amount equal to the sum of (a) all payments of principal, interest, fees and other amounts paid on all Indebtedness, plus (b) all payments under Capitalized Lease Obligations, plus (c) all Capital Expenditures, plus (d) cash expenditures for the payment of taxes, plus (e) all Dividends paid. "GAAP" shall mean generally accepted accounting principles applied on a consistent basis, set forth in the Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants, or their successors which are applicable in the circumstances as of the date in question. The requisite that such principles be applied on a consistent basis shall mean that the accounting principles observed in a current period are comparable in all material respects to those applied in a preceding period. "Guaranty" or "Guaranteed", as applied to an obligation, shall mean and include (a) a guaranty, direct or indirect, in any manner, of any part or all of such obligation, and (b) an agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation, including, without limiting the foregoing, any reimbursement obligations with respect to amounts which may be drawn by beneficiaries of outstanding letters of credit. "Highest Lawful Rate" shall mean at the particular time in question the maximum rate of interest which, under Applicable Law, the Lenders are then permitted to charge on the Obligations. If the maximum rate of interest which, under Applicable Law, the Lenders are permitted to charge on the Obligations shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to the Borrower. For purposes of determining the Highest Lawful Rate under the Applicable Law of the State of Texas (including any amendment to such Applicable Law), the applicable rate ceiling shall be (a) the indicated rate ceiling described in and computed in accordance with the provisions of Section (a)(1) of Art. 1.04, or (b) if the parties subsequently contract as allowed by Applicable Law, the quarterly ceiling or the annualized ceiling computed pursuant to Section (d) of Art. 1.04; provided, however, that at any time the indicated rate ceiling, the quarterly ceiling or the annualized ceiling shall be less than 18% per annum or more than 24% per annum, the provisions of Sections (b)(1) and (2) of said Art. 1.04 shall control for purposes of such determination, as applicable. "Holdings" shall mean Clear Channel Holdings, Inc., a Nevada corporation, and a wholly-owned Subsidiary of the Borrower. "Holdings Note" shall mean that certain promissory note of Holdings payable to the order of Borrower in the original principal amount not to exceed $600,000,000 evidencing loans and 8 14 advances made or to be made by the Borrower to Holdings, together with any extension, renewal, increase oramendment thereof, or substitution therefor. "Increased Letter of Credit Costs" shall have the meaning set forth in Section 2.16(d) hereof. "Increased Letter of Credit Costs Retroactive Effective Date" shall have the meaning set forth in Section 2.16(d) hereof. "Increased Letter of Credit Costs Set Date" shall have the meaning set forth in Section 2.16(d) hereof. "Indebtedness" shall mean, with respect to any Person, (a) all items, except items of partners' equity or of Capital Stock or of surplus or of general contingency or deferred tax reserves, which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person, (b) all obligations secured by any Lien on any property or asset owned by such Person, whether or not the obligation secured thereby shall have been assumed, (c) to the extent not otherwise included, all Capitalized Lease Obligations of such Person, all obligations of such Person with respect to leases constituting part of a sale and leaseback arrangement, all Guaranties, all obligations under interest rate swap agreements or similar hedge agreements, all indebtedness for borrowed money (excluding, for purposes of calculation of financial covenants only, indebtedness evidenced by Intercompany Notes), and all reimbursement obligations with respect to outstanding letters of credit, and (d) any "withdrawal liability" of the Borrower or any Subsidiary, as such term is defined under Part I of Subtitle E of Title IV of ERISA. "Indemnified Matters" shall have the meaning ascribed to it in Section 5.10(a) hereof. "Indemnitees" shall have the meaning ascribed to it in Section 5.10(a) hereof. "Index Debt Rating" shall mean the rating available to the Borrower's senior, unsecured, noncredit-enhanced long term indebtedness for borrowed money ("Index Debt") or the implied rating established by Moody's or S&P as if the Borrower had outstanding Index Debt. "Institutional Debt" shall mean Indebtedness for borrowed money which may be raised by the Borrower in the private placement or public debt markets. "Intercompany Notes" shall mean, collectively, the Management Note, the Television Note, the Radio Note, the Metroplex Note, the Radio Licenses Note, the Television Licenses Note, the Metroplex Licenses Note, the Memphis Note, the Productions Note, the CCR Houston Nevada Note, the CCRE Note and the Holdings Note. "Interest Period" shall mean (a) for any Base Rate Advance, the period beginning on the day the Advance was made and ending on the first Quarterly Date thereafter, (b) for any LIBOR 9 15 Advance, the period beginning on the day the Advance is made and ending one, two, three, six or, subject to each Lender's good faith determination of availability, twelve months thereafter (as the Borrower shall select), and (c) any Bid Rate Advance, the period beginning on the day the Advance was made and ending the date the Borrower and the Lender making the BidRate Advance agree pursuant to Section 2.1(b). "Investment" shall mean any acquisition of all or substantially all assets of any Person, or any direct or indirect purchase or other acquisition of, or beneficial interest in, Capital Stock or other securities of any other Person, or any direct or indirect loan, advance (other than advances to employees for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution to, or investment in any other Person, including without limitation the incurrence or sufferance of Indebtedness or accounts receivable of any other Person that are not current assets or do not arise in the ordinary course of business. "Issuing Bank" shall mean NationsBank of Texas, N.A., in its capacity as issuer of the Letters of Credit. "L/C Cash Collateral Account" shall have themeaning specified in Section 2.16(g) hereof. "L/C Related Documents" shall have the meaning specified in Section 2.16(d) hereof. "Lender" shall mean each financial institution shown on the signature pages hereof so long as such financial institution maintains a Commitment or is owed any part of the Obligations (including the Administrative Lender in its individual capacity), and each Assignee that hereafter becomes party hereto pursuant to Section 11.6 hereof. "Letter of Credit" shall have the meaning specified in Section 2.16(a) hereof. "Letter of Credit Agreement" shall have the meaning specified in Section 2.16(b) hereof. "Letter of Credit Facility" shall mean the amount of the Letters of Credit the Issuing Bank may issue pursuant to Section 2.16(a) hereof. "Leverage Ratio" shall mean, for any date of determination, the ratio of Total Debt as of the date of determination to Operating Cash Flow for the four most recently ended fiscal quarters preceding such date of determination. "LIBOR Advance" shall mean a Revolving Credit Advance which the Borrower requests to be made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance with the provisions of Section 2.2 hereof. 10 16 "LIBOR Basis" shall mean a simple per annum interest rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum of the LIBOR Rate plus the Applicable Margin. The LIBOR Basis shall, with respect to LIBOR Advances with Interest Periods in excess of six months, be subject to premiums assessed by each Lender, which are payable directly to each Lender. Once determined, the LIBOR Basis shall remain unchanged during the applicable Interest Period. "LIBOR Lending Office" shall mean, with respect to a Lender, the office designated as its LIBOR Lending Office on Schedule 1 attached hereto, and such other office of the Lender or any of its affiliates hereafter designated by notice to the Borrower and the Administrative Lender. "LIBOR Rate" shall mean, for any Interest Period, the interest rate per annum (rounded upward to the nearest one sixteenth (1/16th) of one percent) at which deposits in United States Dollars are offered to the Administrative Lender by leading banks reasonably selected by the Administrative Lender in the London interbank market at approximately 11:00 a.m. (London time), two Business Days before the first day of such Interest Period, in an amount approximately equal to the principal amount of, and for a length of time approximately equal to the Interest Period for, the LIBOR Advance sought by the Borrower. "Lien" shall mean, with respect to any property, any mortgage, lien, pledge, collateral assignment, hypothecation, charge, security interest, title retention agreement, levy, execution, seizure, attachment, garnishment or other encumbrance of any kind in respect of such property, whether or not choate, vested or perfected. "Loan Documents" shall mean this Agreement, the notes, the pledge agreements, the Subsidiary Guaranty, fee letters, and any other document or agreement executed or delivered from time to time by the Borrower, any Subsidiary or any other Person in connection herewith or as security for the Obligations. "Local Marketing Agreement" shall mean any time brokerage agreements, local market affiliation agreements or related or similar agreements entered into between the Borrower or any Subsidiary and any other Person, as any of the above may be amended, substituted, replaced or modified. "Management" shall mean Clear Channel Management, Inc., a Delaware corporation, and a wholly-owned Subsidiary of Holdings. "Management Note" shall mean that certain promissory note of Management payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Holdings to Management, together with any extension, renewal, increase or amendment thereof, or substitution therefor. 11 17 "Material Adverse Effect" shall mean any act or circumstance or event that (a) causes a Default, or (b) otherwise could reasonably be expected to be material and adverse to the business, consolidated assets, liabilities, financial condition, results of operations or prospects of the Borrower and its Restricted Subsidiaries, together taken as a whole. "Maturity Date" shall mean the last Business Day of September 2003. "Maximum Amount" shall mean the maximum amount of interest which, under Applicable Law, the Lenders are permitted to charge on the Obligations. "Memphis" shall mean Clear Channel Communications of Memphis, Inc., a Texas corporation, and a wholly-owned Subsidiary of Holdings. "Memphis Note" shall mean that certain promissory note of Memphis payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Holdings to Memphis, together with any extension, renewal, increase or amendment thereof or substitutions therefor. "Metroplex" shall mean Clear Channel Metroplex, Inc., a Nevada corporation, and a wholly-owned Subsidiary of Metroplex Licenses. "Metroplex Licenses" shall mean Clear Channel Metroplex Licenses, Inc., a Nevada corporation, and a wholly- owned Subsidiary of the Borrower. "Metroplex Licenses Note" shall mean that certain promissory note of Metroplex Licenses payable to the order of the Borrower in the original principal amount not to exceed $600,000,000 evidencing loans or advances made or to be made by Borrower to Metroplex Licenses, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Metroplex Note" shall mean that certain promissory note of Metroplex payable to the order of Metroplex Licenses in the original principal amount not to exceed $600,000,000 evidencing loans or advances made or to be made by Metroplex Licenses to Metroplex, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Moody's" shall mean Moody's Investors Services, Inc. "Multiemployer Plan" shall mean, as to any Person, at any time, a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person or any member of its Controlled Group is making, or is obligated to make contributions or has made, or been obligated to make, contributions. 12 18 "NationsBank Guaranties" shall mean the Guaranty in favor of NationsBank of Texas, N.A. on behalf of RDS Broadcasting, Inc. and Mercury Broadcasting, Inc. in the amounts of $9,575,000 and $2,000,000 respectively. "Necessary Authorization" shall mean any license, permit, consent, approval or authorization from, or any filing or registration with, any governmental or other regulatory authority (including without limitation the FCC) necessary or appropriate to enable the Borrower or any Subsidiary to maintain and operate its business and properties. "Net Cash Proceeds" shall mean, with respect to any sale, lease, transfer or disposition of any asset by any Person or the issuance of Institutional Debt or Equity by any Person, the aggregate amount of cash received by such Person in connection with such transaction minus reasonable fees, costs and expenses and related taxes. "Notice of Issuance" shall have the meaning ascribed to it in Section 2.16(b) hereof. "Obligations" shall mean (a) all obligations of any nature (whether matured or unmatured, fixed or contingent, including the Reimbursement Obligations) of the Borrower or any Subsidiary to the Lenders under the Loan Documents, as they may be amended from time to time, and (b) all obligations of the Borrower or any Subsidiary for losses, damages, expenses or any other liabilities of any kind that any Lender may suffer by reason of a breach by the Borrower or any Subsidiary of any obligation, covenant or undertaking with respect to any Loan Document. "Operating Cash Flow" shall mean, for any period, determined in accordance with GAAP on a consolidated basis for the Borrower and its Restricted Subsidiaries, the sum of (a) pre-tax net income (excluding therefrom (i) any items of extraordinary gain, including net gains on the sale of assets other than asset sales in the ordinary course of business, and (ii) any items of extraordinary loss, including net losses on the sale of assets other than asset sales in the ordinary course of business), plus (b) interest expense, depreciation and amortization (including amortization of film contracts), and other non-cash expenses, and minus (c) payments made or scheduled to be made with respect to film contracts. Operating Cash Flow shall be adjusted to exclude (i) any extraordinary non-cash items deducted from or included in the calculation of pre-tax net income and (ii) without duplication, any accrued but not paid income from Investments. For purpose of calculation of Operating Cash Flow with respect to assets not owned at all times during the four fiscal quarters preceding the date of determination of Operating Cash Flow there shall be (i) included in Operating Cash Flow the Operating Cash Flow of any assets acquired during any of such four fiscal quarters for the twelve month period preceding the date of determination and (ii) excluded from Operating Cash Flow the Operating Cash Flow of any assets disposed of during any of such four fiscal quarters for the twelve month period preceding the date of determination. "Operating Lease" shall mean any operating lease, as defined in the Financial Accounting Standard Board Statement of Financial Accounting Standards No. 13, dated November, 1976 or 13 19 otherwise in accordance with GAAP, with an initial or remaining noncancellable lease term in excess of one year. "Participant" shall have the meaning ascribed to it in Section 11.6(c) hereof. "Participation" shall have the meaning ascribed to it in Section 11.6(c) hereof. "Payment Date" shall mean the last day of the Interest Period for any Advance. "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Permitted Liens" shall mean, as applied to any Person: (a) any Lien in favor of the Lenders to secure the Obligations hereunder; (b) (i) Liens on real estate for real estate taxes not yet delinquent, (ii) Liens created by lease agreements to secure the payments of rental amounts and other sums not yet due thereunder, (iii) Liens on leasehold interests created by the lessor in favor of any mortgagee of the leased premises, and (iv) Liens for taxes, assessments, governmental charges, levies or claims that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on such Person's books, but only so long as no foreclosure, restraint, sale or similar proceedings have been commenced with respect thereto; (c) Liens of carriers, warehousemen, mechanics, laborers and materialmen and other similar Liens incurred in the ordinary course of business for sums not yet due or being contested in good faith, if such reserve or appropriate provision, if any, as shall be required by GAAP shall have been made therefor; (d) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or similar legislation; (e) Easements, right-of-way, restrictions and other similar encumbrances on the use of real property which do not interfere with the ordinary conduct of the business of such Person; (f) Liens created to secure the purchase price of tangible personal property acquired by such Person or created to secure Indebtedness permitted by Section 7.1(d) hereof in an amount not to exceed $7,500,000 in the aggregate, which is incurred solely for the purpose of financing the acquisition of such assets and incurred at the time of acquisition, so long as each such Lien shall at all times be confined solely to the asset or assets so acquired (and proceeds thereof), and refinancings thereof so long as any such Lien remains solely on the asset or assets acquired and the amount of Indebtedness related thereto is not increased; 14 20 (g) Liens in respect of judgments or awards for which appeals or proceedings for review are being prosecuted and in respect of which a stay of execution upon any such appeal or proceeding for review shall have been secured, provided that (i) suchPerson shall have established adequate reserves for such judgments or awards, (ii) such judgments or awards shall be fully insured and the insurer shall not have denied coverage, or (iii) such judgments or awards shall have been bonded to the satisfaction of the Determining Lenders; and (h) Any Liens existing on the Agreement Date which are described on Schedule 2 hereto, and Liens resulting from the refinancing of the related Indebtedness, provided that the Indebtedness secured thereby shall not be increased and the Liens shall not cover additional assets of the Borrower. "Person" shall mean an individual, corporation, partnership, trust or unincorporated organization, limited liability company, or a government or any agency or political subdivision thereof. "Plan" shall mean an employee pension benefit plan as defined in Section 3(2) of ERISA (including a Multiemployer Plan) that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is maintained for the employees of the Borrower, its Subsidiaries or any member of their Controlled Group. "Pledged Stock" shall mean all Capital Stock of the Restricted Subsidiaries. "Prime Rate" shall mean, at any time, the prime interest rate announced or published by the Administrative Lender from time to time as its reference rate for the determination of interest rates for loans of varying maturities in United States dollars to United States residents of varying degrees of creditworthiness and being quoted at such time by the Administrative Lender as its "prime rate;" it being understood that such rate may not be the lowest rate of interest charged by the Administrative Lender. "Productions" shall mean Clear Channel Productions, Inc., a Nevada corporation, and a wholly owned Subsidiary of Holdings. "Productions Note" shall mean that certain promissory note of Productions payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Holdings to Productions, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Pro-Forma Debt Service" shall mean, as of any date of determination, determined in accordance with GAAP for the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum (without duplication) of (a) all payments of principal, interest, fees and other amounts scheduled to be paid on all Indebtedness during the succeeding four fiscal quarters (assuming for any Indebtedness subject to a floating interest rate, an interest rate equal to the applicable rate in effect on the date of determination), plus (b) without duplication, all rentals and other 15 21 amounts (excluding insurance premiums and property taxes) scheduled to be paid under all Capitalized Lease Obligations during the succeeding four fiscal quarters, plus (c) all debt discount and expense scheduled to be amortized during the succeeding four fiscal quarters.. "Quarterly Date" shall mean the last Business Day of each September, December, March and June, beginning December 31, 1995. "Radio" shall mean Clear Channel Radio, Inc., a Nevada corporation, and a wholly-owned Subsidiary of Radio Licenses. "Radio Licenses" shall mean Clear Channel Radio Licenses, Inc., a Nevada corporation, and a whollyowned Subsidiary of Holdings. "Radio Licenses Note" shall mean that certain promissory note of Radio Licenses payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Holdings to Radio Licenses, together with any extension, renewal, increase or amendment thereto, or substitution therefor. "Radio Note" shall mean that certain promissory note of Radio payable to the order of Radio Licenses in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Radio Licenses to Radio, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Refinancing Advance" shall mean any Revolving Credit Advance which is used to pay the principal amount (or any portion thereof) of a Revolving Credit Advance or Bid Rate Advance at the end of its Interest Period and which, after giving effect to such application, does not result in an increase in the aggregate amount of outstanding Revolving Credit Advances or Bid Rate Advances at the time of the Refinancing Advance. "Regulatory Modification" shall have the meaning set forth in Section 9.5 hereof. "Regulatory Modification Retroactive Effective Date" shall have the meaning set forth in Section 9.5 hereof. "Regulatory Modification Set Date" shall have the meaning set forth in Section 9.5 hereof. "Reimbursement Obligation" shall mean, in respect of any Letter of Credit as at any date of determination, the maximum aggregate amount which is then available to be drawn under such Letter of Credit (whether the conditions to drawing thereunder have been met) plus any unreimbursed amounts under outstanding Letters of Credit. 16 22 "Release Date" shall mean the date on which the Notes have been paid, all other Obligations due and owing have been paid and performed in full, and the Commitment has been terminated. "Reportable Event" shall have the meaning set forth in Title IV of ERISA. "Restricted Subsidiary" shall mean (i) any Subsidiary which is not an Unrestricted Subsidiary and (ii) ARN. "Revolving Credit Advance" shall mean an Advance made pursuant to Section 2.1(a) hereof. "Revolving Credit Note" shall mean any promissory note of the Borrower evidencing Revolving Credit Advances hereunder, substantially in the form of Exhibit A hereto, together with any extension, renewal or amendment thereof or substitution therefor. "S&P" shall mean Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc., a New York Corporation. "Snowden Broadcasting" shall mean Snowden Broadcasting, L.C., a Texas limited liability company. "Snowden Broadcasting of Louisville" shall mean Snowden Broadcasting of Louisville, Inc., a Texas corporation. "Special Counsel" shall mean the law firm of Donohoe, Jameson & Carroll, P.C., or such other legal counsel as the Administrative Lender may select. "Specified Percentage" shall mean, as to any Lender, the percentage indicated beside its name on the signature pages hereof, or if applicable, specified in its most recent Assignment Agreement. "Subordinated Debt" shall mean any Institutional Debt of the Borrower or any of its Subsidiaries which shall have been and continues to be validly and effectively subordinated to the prior payment in full of the Obligations on terms and documentation approved in writing by the Determining Lenders. "Subsidiary" shall mean (a) any corporation of which 50% or more of the outstanding stock (other than directors' qualifying shares) having ordinary voting power to elect a majority of its board of directors, regardless of the existence at the time of a right of the holders of any class of securities of such corporation to exercise such voting power by reason of the happening of any contingency, is at the time owned by the Borrower, directly or through one or more intermediaries, and (b) any other entity which is Controlled or then capable of being Controlled 17 23 by the Borrower, directly or through one or more intermediaries, whether a Restricted Subsidiary or Unrestricted Subsidiary. "Subsidiary Guaranty" shall mean any Guaranty executed by one or more Restricted Subsidiaries, guarantying payment and performance of the Obligations, substantially in the form of Exhibit G hereto, as such agreement may be amended, modified, renewed or extended from time to time. "Subsidiary Pledge Agreement" shall mean, collectively, any pledge agreement executed by one or more Restricted Subsidiaries, granting a Lien on (i) the Pledged Stock owned by such Restricted Subsidiary and(ii) each Intercompany Note evidencing intercompany advances made by such Restricted Subsidiary, as security for the Obligations, substantially in the forms of Exhibit D, E, G and J hereto, as appropriate, as such agreement may be amended, modified, renewed or extended from time to time. "Television" shall mean Clear Channel Television, Inc., a Nevada corporation, and a whollyowned Subsidiary of Television Licenses. "Television Licenses" shall mean Clear Channel Television Licenses, Inc., a Nevada corporation, and a wholly-owned Subsidiary of Holdings. "Television Licenses Note" shall mean that certain promissory note of Television Licenses payable to the order of Holdings in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Holdings to Television Licenses, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Television Note" shall mean that certain promissory note of Television payable to the order of Television Licenses in the original principal amount not to exceed $600,000,000 evidencing loans and advances made or to be made by Television Licenses to Television, together with any extension, renewal, increase or amendment thereof, or substitution therefor. "Termination Event" shall mean, with respect to the Borrower, any of its Subsidiaries or any Plan, (a) a Reportable Event, (b) the withdrawal from a Plan during a Plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings by the Pension Benefit Guaranty Corporation to terminate a Plan or appoint a trustee to administer a Plan, (e) the failure to comply with the minimum funding requirements of ERISA with respect to any Plan, or (f) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan. "Total Debt" shall mean, as of any date of determination, determined for the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum (without duplication) of (a) all 18 24 principal and interest owing under the Loan Documents, (b) all Indebtedness evidenced by a promissory note or otherwise representing borrowed money, (c) all Capitalized Lease Obligations and (d) all Guaranties. "Unrestricted Subsidiary" shall mean any entity acquired by an Investment to the extent permitted pursuant to Section 7.3(h) hereof. An Unrestricted Subsidiary may become a Restricted Subsidiary and subject to the provisions hereof by becoming a party to the Subsidiary Guaranty and any security documents delivered pursuant to Section 5.12 hereof. "Weighted Average Life to Maturity" shall mean, as of the date of determination, with respect to any debt instrument, the quotient obtained by dividing (i) the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal payment of such debt instrument by the amount of such principal payment by (ii) the sum of all such principal payments. Section 1.2 Amendments and Renewals. Each definition of an agreement in this Article 1 shall include such agreement as amended to date, and as amended or renewed from time to time in accordance with its terms, but only with the prior written consent of the Determining Lenders. Section 1.3 Construction. The terms defined in this Article 1 (except as otherwise expressly provided in this Agreement) for all purposes shall have the meanings set forth in Section 1.1 hereof, and the singular shall include the plural, and vice versa, unless otherwise specifically required by the context. All accounting terms used in this Agreement which are not otherwise defined herein shall be construed in accordance with GAAP on a consolidated basis for the Borrower and its Subsidiaries, unless otherwise expressly stated herein. To the extent that a material change in GAAP occurs after the Agreement Date, Borrower and Lenders agree to negotiate in good faith to affect conforming changes to the financial covenants set forth in Article 7 hereof. ARTICLE 2 Advances Section 2.1 The Advances. (a) Revolving Credit Advances. Each Lender severally agrees, upon the terms and subject to the conditions of this Agreement, to make Revolving Credit Advances to the Borrower from time to time up to and including the Maturity Date in an aggregate amount not to exceed its Specified Percentage of the Commitment less its Specified Percentage of the Reimbursement Obligations then outstanding (assuming compliance with all conditions to drawing) for the purposes set forth in Section 5.9 hereof. Subject to Section 2.9 hereof, Advances may be repaid and then reborrowed. Any Revolving Credit Advance shall, at the option of the Borrower as 19 25 provided in Section 2.2 hereof (and, in the case of LIBOR Advances, subject to availability and to the provisions of Article 9 hereof), be made as a Base Rate Advance or a LIBOR Advance; provided that there shall not be outstanding to any Lender, at any one time, more than seven LIBOR Advances. Notwithstanding any provision in any Loan Document to the contrary, in no event shall the principal amount of all outstanding Revolving Credit Advances, Bid Rate Advances and Reimbursement Obligations plus the principal amount of Indebtedness guaranteed by the Borrower pursuant to the NationsBank Guaranties exceed the Commitment. On the Maturity Date unless sooner paid as provided herein, the outstanding Revolving Credit Advances shall be repaid in full. (b) Bid Rate Advances. Each Lender may, in its sole discretion and on the terms and conditions set forth in this Agreement, make Bid Rate Advances to the Borrower from time to time in an aggregate amount not in excess of the difference between (i) the Commitment minus (ii) the sum of (A) the aggregate outstanding principal amount for all Revolving Credit Advances, plus (B) the aggregate outstanding principal amount of all Bid Rate Advances, plus (C) the amount of all Reimbursement Obligations, plus (D) the principal amount of Indebtedness guaranteed by the Borrower pursuant to the NationsBank Guaranties. Notwithstanding anything in the preceding sentence to the contrary, Bid Rate Advances may not exceed $300,000,000 at any time. Each Bid Rate Advance shall be for a period for not less than 7 days and not more than 90 days. The Borrower may not request any Bid Rate Advances unless the Index Debt Rating is the following or better: BBB- from S&P or Baa3 from Moody's. Bid Rate Advances may not be prepaid without the prior written consent of the Lender making such Bid Rate Advances. Section 2.2 Manner of Borrowing and Disbursement. (a) In the case of Base Rate Advances, the Borrower, through an Authorized Signatory, shall give the Administrative Lender at least one Business Days' irrevocable written notice, or irrevocable telephonic notice followed immediately bywritten notice (provided, however, that the Borrower's failure to confirm any telephonic notice in writing shall not invalidate any notice so given), of its intention to borrow or reborrow a Base Rate Advance hereunder. Notice shall be given to the Administrative Lender prior to 11:00 a.m., Dallas, Texas time, in order for such Business Day to count toward the minimum number of Business Days required. Such notice of borrowing shall specify the requested funding date, which shall be a Business Day, and the amount of the proposed aggregate Base Rate Advances to be made by Lenders. Each Base Rate Advance shall have an Interest Period beginning on the date such Advance is made and ending on the Quarterly Date next following the date the Advance is made; provided that no such Interest Period shall extend past the Maturity Date. (b) In the case of LIBOR Advances, the Borrower, through an Authorized Signatory, shall give the Administrative Lender at least three Business Days' irrevocable written notice, or irrevocable telephonic notice followed immediately bywritten notice (provided, however, that the Borrower's failure to confirm any telephonic notice in writing shall not invalidate any notice so given), of its intention to borrow or reborrow a LIBOR Advance hereunder. Notice shall be 20 26 given to the Administrative Lender prior to 11:00 a.m., Dallas, Texas time, in order for such Business Day to count toward the minimum number of Business Days required. LIBOR Advances shall in all cases be subject to availability and to Article 9 hereof. For LIBOR Advances, the notice of borrowing shall specify the requested funding date, which shall be a Business Day, the amount of the proposed aggregate LIBOR Advances to be made by Lenders and the Interest Period selected by the Borrower, provided that no such Interest Period shall extend past the Maturity Date or prohibit or impair the Borrower's ability to comply with Section 2.8 hereof. (c) Subject to Sections 2.1 and 2.9 hereof, at least three Business Days prior to each Payment Date for a LIBOR Advance, the Borrower, through an Authorized Signatory, shall give the Administrative Lender irrevocable written notice, or irrevocable telephonic notice followed immediately by written notice (provided, however, that the Borrower's failure to confirm any telephonic notice in writing shall not invalidate any notice so given), specifying whether all or a portion of such LIBOR Advance outstanding on the Payment Date (i) is to be repaid and then reborrowed in whole or in part as a LIBOR Advance, (ii) is to be repaid and then reborrowed in whole or in part as a Base Rate Advance, or (iii) is to be repaid and not reborrowed; provided, however, notwithstanding anything in this Agreement to the contrary, if on any Payment Date a Default shall exist, such LIBOR Advance may only be reborrowed as a Base Rate Advance. Upon such Payment Date, such LIBOR Advance shall, subject to the provisions hereof, be so repaid and, as applicable, reborrowed. (d) Subject to Sections 2.1 and 2.9 hereof, upon at least three Business Days' irrevocable prior written notice (or three Business Days if the Borrower wishes to reborrow a LIBOR Advance), through an Authorized Signatory, or irrevocable telephonic notice followed immediately by written notice (provided, however, that the Borrower's failure to confirm any telephonic notice in writing shall not invalidate any notice so given), the Borrower may repay a Base Rate Advance on its Payment Date, or prepay a Base Rate Advance without regard to its Payment Date, and (i) reborrow all or a portion of the principal amount thereof as a Base Rate Advance, (ii) reborrow all or a portion of the principal amount thereof as one or more LIBOR Advances, or (iii) not reborrow all or any portion of such Base Rate Advance. Upon such Payment Date or date of repayment, such Base Rate Advance shall, subject to the provisions hereof, be so repaid and, as applicable, reborrowed. (e) The aggregate amount of Base Rate Advances to be made by the Lenders on any day shall be in a principal amount which is at least $1,000,000 and which is an integral multiple of $100,000; provided, however, that such amount may equal the unused amount of the Commitment. The aggregate amount of LIBOR Advances having the same Interest Period and to be made by the Lenders on any day shall be in a principal amount which is at least $2,500,000 and which is an integral multiple of $100,000. (f) The Administrative Lender shall promptly notify the Lenders of each notice (other than with respect to a Bid Rate Advance) received from the Borrower pursuant to this Section. Failure of the Borrower to give any notice in accordance with Sections 2.2(c) and (d) hereof 21 27 shall result in a repayment of any such existing Advance on the applicable Payment Date by a Refinancing Advance which is a Base Rate Advance. Each Lender shall, not later than noon, Dallas, Texas time, on the date of any Revolving Credit Advance that is not a Refinancing Advance, deliver to the Administrative Lender, at its address set forth herein, such Lender's Specified Percentage of such Revolving Credit Advance in immediately available funds in accordance with the Administrative Lender's instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date of any Revolving Credit Advance hereunder, the Administrative Lender shall, subject to satisfaction of the conditions set forth in Article 3, disburse the amounts made available to the Administrative Lender by the Lenders by (i) transferring such amounts by wire transfer pursuant to the Borrower's instructions, or (ii) in the absence of such instructions, crediting such amounts to the account of the Borrower maintained with the Administrative Lender. All Revolving Credit Advances shall be made by each Lender according to its Specified Percentage. No Lender shall be relieved of its obligation to fund its Specified Percentage of any Revolving Credit Advance notwithstanding the fact that at any time the aggregate outstanding principal amount of all Bid Rate Advances made by such Lender exceed its Specified Percentage of the Commitment. (g) Bid Rate Advances (i) In the case of Bid Rate Advances, the Borrower, through an Authorized Signatory, shall give the Administrative Lender (which shall promptly notify the Lenders) prior to 12:00 noon, Dallas, Texas time, at least one Business Day prior to the proposed borrowing, irrevocable written notice of its intention to borrow a Bid Rate Advance. Each Bid Rate Advance request shall be subject to a nonrefundable $500.00 processing fee payable to the Administrative Lender by the Borrower regardless of whether such Bid Rate Advance is funded. Such notice of borrowing shall specify (i) the requested funding date, which shall be a Business Day, (ii) the aggregate amount of the proposed Bid Rate Advances, (ii) the Interest Period selected by the Borrower, provided that no Interest Period shall extend past the Maturity Date and (iv) any other terms applicable thereto. (ii) Each Lender may, if, in its sole discretion, it elects to do so, irrevocably offer to make one or more Bid Rate Advances to the Borrower as part of such proposed borrowing at a rate or rates of interest specified by such Lender in its sole discretion, by making a written quote to the Administrative Lender (which shall give prompt notice thereof to the Borrower) before 9:30 a.m., Dallas, Texas time, on the date of such proposed borrowing, setting forth the minimum amount and maximum amount of each Bid Rate Advance which such Lender would be willing to make as part of the proposed borrowing (which amounts may exceed such Lender's Specified Percentage of the Commitment) and the rate or rates of interest therefor and the Interest Period therefor.If NationsBank of Texas, N.A. elects to offer to make one or more Bid Rate Advances, it shall deliver its written quote with respect to the proposed borrowing to the Borrower prior to the Administrative Lender's receipt of any otherLender's written quote for such proposed borrowing. The Administrative Lender shall notify the Borrower of each written quote provided by each Lender with respect to the proposed borrowing before 22 28 10:00 a.m., Dallas, Texas, on the date of such proposed borrowing. If any Lender shall elect not to make such an offer, such Lender shall so notify the Administrative Lender before 9:30 a.m., Dallas, Texas time, on the date of such proposed borrowing, and such Lender shall not make any Bid Rate Advance as part of such borrowing. If any Lender shall fail to respond to the Administrative Lender by such time, such Lender shall be deemed to have elected not to make an offer. (iii) The Borrower shall, in turn, before 10:30 a.m., Dallas, Texas time, on the date of such proposed borrowing either (A) cancel such proposed borrowing by giving the Administrative Lender notice to that effect, or (B) accept one or more of the offers made by any Lender or Lenders pursuant to clause (ii) above, in its sole discretion, by giving notice to the Administrative Lender of the amount of each Bid Rate Advance (which amount shall be equal to or greater than the minimum amount, and equal to or less than the maximum amount, for which notification was given to the Borrower by the Administrative Lender on behalf of such Lender for such Bid Rate Advance pursuant to clause (ii) above) to be made by each Lender as part of such borrowing, and reject any remaining offers made by the Lenders pursuant to clause (ii) above by giving the Administrative Lender notice to that effect. (iv) If the Borrower notifies the Administrative Lender that such proposed borrowing is cancelled pursuant to clause (iii)(A) above, the Administrative Lender shall give prompt notice thereof to the Lenders and such borrowing shall not be made. (v) If the Borrower accepts one or more of the offers made by any Lender or Lenders pursuant to clause (iii)(B) above, the Administrative Lender shall in turn promptly notify each Lender of the date, rate of interest, and amount of each Bid Rate Advance and the Lender making such Advance. Section 2.3 Interest. (a) On Base Rate Advances. (i) The Borrower shall pay interest on the outstanding unpaid principal amount of each Base Rate Advance, from the date such Advance is made until it is due (whether at maturity, by reason of acceleration, by scheduled reduction, or otherwise) or repaid, at a simple interest rate per annum equal to the Base Rate Basis as in effect from time to time, provided that interest on Base Rate Advances shall not exceed the Maximum Amount. If at any time the Base Rate Basis would exceed the Highest Lawful Rate, interest payable on Base Rate Advances shall be limited to the Highest Lawful Rate, but the Base Rate Basis shall not thereafter be reduced below the Highest Lawful Rate until 23 29 the total amount of interest accrued on such Advances equals the amount of interest that would have accrued if the Base Rate Basis had been in effect at all times. (ii) Interest on each Base Rate Advance shall be computed on the basis of a year of 365 or 366 days, as applicable, for the number of days actually elapsed, and shall be payable in arrears on each Quarterly Date and on the Maturity Date. (b) On LIBOR Advances. (i) The Borrower shall pay interest on the unpaid principal amount of each LIBOR Advance, from the date such Advance is made until it is due (whether at maturity, by reason of acceleration, by scheduled reduction, or otherwise) or repaid, at a rate per annum equal to the LIBOR Basis for such Advance. The Administrative Lender, whose determination shall be conclusive, shall determine the LIBOR Basis on the second Business Day prior to the applicable funding date and shall notify the Borrower and the Lenders of such LIBOR Basis. (ii) Subject to Section 11.10 hereof, interest on each LIBOR Advance shall be computed on the basis of a 360-day year for the actual number of days elapsed, and shall be payable in arrears on the applicable Payment Date and on the Maturity Date; provided, however, that if the Interest Period for such Advance exceeds three months, interest shall also be due and payable in arrears on each Quarterly Date during such Interest Period. (c) On Bid Rate Advances. The Borrower shall pay interest on the outstanding unpaid principal amount of each Bid Rate Advance at a per annum rate equal to the interest rate agreed to by the Borrower and the Lender making such Bid Rate Advance pursuant to Section 2.2(g) hereof. Interest on each Bid Rate Advance shall be computed and shall be payable at such times as agreed upon between the Borrower and the Lender making such Advance pursuant to Section 2.2(g) hereof. (d) Interest if No Notice of Selection of LIBOR Basis or Interest Period. If the Borrower fails to give the Administrative Lender timely notice of its selection of a LIBOR Basis for a LIBOR Advance, or if for any reason a determination of a LIBOR Basis for any Advance is not timely concluded due to the fault of the Borrower, the Base Rate Basis shall apply to the applicable Advance. If the Borrower fails to give the Administrative Lender timely notice of its selection of an Interest Period for a LIBOR Advance, a one-month Interest Period shall apply to the applicable Advance. (e) Interest After an Event of Default. (i) After an Event of Default (other than an Event of Default specified in Section 8.1(f) or (g) hereof) and during any continuance thereof, at the option of Determining Lenders, and (ii) after an Event of Default specified in Section 8.1(f) or (g) hereof and during any continuance thereof, automatically and without any action by the Administrative Lender or any Lender, the Obligations shall bear interest at arate per annum equal to the Default Rate. Such interest shall be payable on the earlier of demand, 24 30 the Maturity Date or upon the occurrence of an Event of Default specified in Section 8.1(f) or 8.1(g) hereof, immediately, and shall accrue until the earlier of (i) waiver or cure (to the satisfaction of the Determining Lenders) of the applicable Event of Default, (ii) agreement by the Lenders to rescind the charging of interest at the Default Rate, or (iii) payment in full of the Obligations. The Lenders shall not be required to accelerate the maturity of the Advances, to exercise any other rights or remedies under the Loan Documents, or to give notice to the Borrower of the decision to charge interest at the Default Rate. The Lenders will undertake to notify the Borrower, after the effective date, of the decision to charge interest at the Default Rate, but any failure to do so will not affect the application of such rate. Section 2.4 Fees. (a) Commitment Fee. Subject to Section 11.10 hereof, the Borrower agrees to pay to the Administrative Lender, for the ratable account of the Lenders, a commitment fee on the daily average unborrowed balance of the Commitment based on the following schedule:
Applicability Per Annum Percentage (i) If the Leverage Ratio is not less than 5.0 to 1 0.3750 (ii) If the Leverage Ratio is less than 5.0 to 1 but is not less than 3.0 to 1 0.2500 (iii) If the Leverage Ratio is less than 3.0 to 1 but is not less than 2.0 to 1 0.1875 (iv) If the Leverage Ratio is less than 2.0 to 1 0.1250
The commitment fee shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Borrower as tested by the Leverage Ratio. Except as set forth in the last sentence hereof, any such increase or reduction in such fee shall be effective on the third Business Day following the date of receipt of the applicable financial statements. If financial statements of the Borrower setting forth the Leverage Ratio are not received by the Administrative Lender by the date required pursuant to Section 6.1 hereof, the commitment fee shall be determined as if the Leverage Ratio is not less than 5.0 to 1 until such time as such financial statements are received. For the last fiscal quarter of any fiscal year of the Borrower, the Borrower may provide its unaudited financial statements, subject only to year-end adjustments, for the purpose of adjusting the commitment fee. Notwithstanding anything above to the contrary, if the compliance certificate required to be delivered pursuant to Section 7.5(b) hereof, prior to any proposed acquisition, indicates that the Leverage Ratio after giving effect to the proposed acquisition would result in an adjustment of the commitment fee, such fee shall be increased or decreased, as the case may be, as of the date of such acquisition. 25 31 Such fees shall be (i) payable in arrears on each Quarterly Date and the Maturity Date, fully earned when due and, subject to Section 11.10 hereof, nonrefundable when paid and (ii) subject to Section 11.10 hereof, computed on the basis of a year of 365 or 366 days, as applicable, for the actual number of days elapsed. For purposes of calculating the commitment fee only, (i) undrawn portions of Letters of Credit outstanding from time to time will reduce the unused portion of the Commitment and (ii) outstanding Bid Rate Advances shall not reduce the unused portion of the Commitment. (b) Facility Fee. Subject to Section 11.10 hereof, the Borrower agrees to pay directly to each Lender a facility fee in the amount provided for in a facility fee letter between the Borrower and each Lender. Such fee shall be payable on the Agreement Date, fully earned when due and, subject to Section 11.10 hereof, nonrefundable when paid. (c) Administrative Fee. Subject to Section 11.10 hereof, the Borrower agrees to pay to the Administrative Lender, for its account and not the account of the Lenders, a quarterly administrative fee as provided in a fee letter between the Borrower and the Administrative Lender. Section 2.5 Prepayment. (a) Voluntary Prepayments. The principal amount of any Base Rate Advance may be prepaid in full or in part at any time, without penalty and without regard to the Payment Date for such Advance, upon two Business Days', and any LIBOR Advance may be prepaid, subject to the last sentence of this Section upon three Business Days prior telephonic notice (to be promptly followed by written notice) by an Authorized Signatory to the Administrative Lender. LIBOR Advances may be voluntarily prepaid only so long as the Borrower concurrently reimburses the Lenders in accordance with Section 2.9 hereof. Any notice of prepayment shall be irrevocable. (b) Mandatory Prepayment. On or before the date of any reduction of the Commitment, the Borrower shall prepay applicable outstanding Advances in an amount necessary to reduce the sum of outstanding Advances and Reimbursement Obligations to an amount less than or equal to the Commitment as so reduced. The Borrower shall first prepay all Base Rate Advances, shall thereafter prepay LIBOR Advances, and finally prepay Bid Rate Advances. To the extent that any prepayment requires that a LIBOR Advance be repaid on a date other than the last day of its Interest Period, the Borrower shall reimburse each Lender in accordance with Section 2.9 hereof. (c) Prepayments from Sales of Assets and Equity. Concurrently with the receipt of Net Cash Proceeds from the sale or disposition by the Borrower or any Restricted Subsidiary of (i) any (A) asset in which the Net Cash Proceeds from the sale or disposition thereof exceeds $100,000 and (B) assets sold or disposed of during any fiscal year in which the aggregate Net Cash Proceeds previously received during such fiscal year from sales or dispositions of all assets exceeds $1,000,000, the Borrower shall first prepay all Base Rate Advances, shall thereafter 26 32 prepay LIBOR Advances, and finally prepay Bid Rate Advances in a principal amount equal to (y) in the case of clause (A) above, all Net Cash Proceeds from such sale or disposition and (z) in the case of clause (B) above, the amount that the aggregate Net Cash Proceeds received during any such fiscal year exceeds $1,000,000, or (ii) any Equity, the Borrower shall prepay Advances in a principal amount by which 50% of the aggregate Net Cash Proceeds received by the Borrower and its Restricted Subsidiaries after the Agreement Date from the sale or disposition of Equity exceed $100,000,000. (d) Prepayments from Issuance of Institutional Debt. Concurrently with the receipt of Net Cash Proceeds from the issuance of Institutional Debt by the Borrower, the Borrower shall prepay first all Base Rate Advances, shall thereafter prepay LIBOR Advances, and finally prepay Bid Rate Advances in a principal amount equal to such Net Cash Proceeds. (e) Prepayments, Generally. Any prepayment of an Advance shall be accompanied by interest accrued on the principal amount being prepaid. Any voluntary partial prepayment of a Base Rate Advance shall be in a principal amount which is at least $1,000,000 and which is an integral multiple of $100,000. Any voluntary partial prepayment of a LIBOR Advance shall be in a principal amount which is at least $1,000,000 and which is an integral multiple of $100,000, and to the extent that any prepayment of a LIBOR Advance is made on a date other than the last day of its Interest Period, the Borrower shall reimburse each Lender in accordance with Section 2.9 hereof. Following the Amortization Date, prepayments shall be applied to the mandatory reductions of the Commitment pursuant to Section 2.6(c) hereof in inverse order. Section 2.6 Reduction and Change of Commitment. (a) Voluntary Reduction. The Borrower shall have the right, upon not less than 3 Business Days' notice (provided no notice shall be required for a termination in whole of the Commitment) by an Authorized Signatory to the Administrative Lender (if telephonic, to be confirmed by telex or in writing on or before the date of reduction or termination), which shall promptly notify the Lenders, to terminate or reduce the Commitment, in whole or in part. Each partial termination shall be in an aggregate amount which is at least $5,000,000 and which is an integral multiple of $100,000, and no voluntary reduction in the Commitment shall cause any LIBOR Advance to be repaid prior to the last day of its Interest Period. Notwithstanding anything hereinto the contrary, in no event shall the Borrower have the right to reduce the Commitment to an amount less than the aggregate outstanding Reimbursement Obligations. (b) Mandatory Reduction. The Commitment shall be automatically reduced (i) by the amount of any amount prepaid or required to be prepaid pursuant to Section2.5(b) hereof, (ii) if a Default or Event of Default exists or would exist as a result of the sale or disposition of assets, by the amount of aggregate Net Cash Proceeds received by the Borrower and its Subsidiaries after the Agreement Date from the sale and disposition of assets referred to in Section2.5(c) hereof and which are required to be used to prepay Advances as provided therein, (iii) if a Default or Event of Default exists, by the amount of aggregate Net Cash Proceeds received by the Borrower and its Subsidiaries after the Agreement Date from the sale or disposition of 27 33 Equity referred to in Section 2.5(c) hereof, and (iv) if a Default or Event or Default exists or would exist as a result of the issuance of Institutional Debt, by the amount of any amount prepaid or required to be prepaid pursuant to Section 2.5(d) hereof. Notwithstanding anything herein to the contrary, in no event shall the Borrower reduce the Commitment to an amount less than the aggregate outstanding Reimbursement Obligations. (c) Amortization. On each Quarterly Date, commencing on the Amortization Date, through the last Business Day of September 2003, the Commitment outstanding on the Amortization Date shall automatically reduce by an amount equal to one-fourth (or, in the case of calendar year 1998, the full reduction percentage, and in the case of calendar year 2003, one-third) of the percentage reduction that the Commitment is to reduce in the calendar year in which such Quarterly Date falls pursuant to the table below. Notwithstanding the foregoing, on the Maturity Date, the Commitment shall automatically reduce to zero.
Calendar Year % Reduction 1998 2.5% 1999 11.25% 2000 17.50% 2001 25.00% 2002 25.00% 2003 18.75%
(d) General Requirements. Upon any reduction of the Commitment pursuant to Section 2.6(b), the Borrower shall immediately make a repayment of applicable Advances in accordance with Section 2.5(b) hereof. The Borrower shall reimburse each Lender for any loss or out-of-pocket expense incurred by each Lender in connection with any such payment, as set forth in Section2.9 hereof. The Borrower shall not have any right to rescind any termination or reduction. Once reduced, the Commitment may not be increased or reinstated. Section 2.7 Non-Receipt of Funds by the Administrative Lender. Unless the Administrative Lender shall have been notified by a Lender prior to the date of any proposed Revolving Credit Advance (which notice shall be effective upon receipt) that such Lender does not intend to make the proceeds of such Revolving Credit Advance available to the Administrative Lender, the Administrative Lender may assume that such Lender has made such proceeds available to the Administrative Lender on such date, and the Administrative Lender may in reliance upon such assumption (but shall not be required to) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Lender by such Lender, the Administrative Lender shall be entitled to 28 34 recover such amount on demand from such Lender (or, if such Lender fails to pay such amount forthwith upon such demand, from the Borrower) together with interest thereon in respect of each day during the period commencing on the date such amount was available to the Borrower and ending on (but excluding) the date the Administrative Lender receives such amount from the Lender, with interest thereon if paid by such Lender,at a per annum rate equal to the Federal Funds Rate, and if paid by Borrower, at the applicable Base Rate. No Lender shall be liable for any other Lender's failure to fund a Revolving Credit Advance hereunder. Section 2.8 Payment of Principal of Advances. The Borrower agrees to pay the principal amount of the Advances to the Administrative Lender for the account of the Lenders as follows: (a) End of Interest Period. The principal amount of each Advance hereunder shall be due and payable on its Payment Date, which principal payment may be made by means of a Refinancing Advance. (b) Commitment Reduction. On the date of reduction of the Commitment pursuant to Section 2.6 hereof, including the Maturity Date, the aggregate amount of the Advances outstanding on such date of reduction in excess of the Commitment as reduced minus all outstanding Reimbursement Obligations shall be due and payable, which principal payment may not be made by means of Refinancing Advances. (c) Maturity Date. The principal amount of the Advances, all accrued interest and fees thereon, and allother Obligations, shall be due and payable in full on the Maturity Date. Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur any losses or reasonable outofpocket expenses in connection with (a) failure by the Borrower to borrow any LIBOR Advance or Bid Rate Advance which is at a fixed rate after having given notice of its intention to borrow in accordance with Section 2.2 hereof (whether by reason of the Borrower's election not to proceed or the nonfulfillment of any of the conditions set forth in Article 3 hereof), or (b) any prepayment for any reason of any LIBOR Advance in whole or in part (including a prepayment pursuant to Sections 2.5(c), 2.5(d) and 9.3(b) hereof), the Borrower agrees to pay to any such Lender, upon its demand, an amount sufficient to compensate such Lender for all such losses and out-of-pocket expenses. Such Lender's good faith determination of the amount of such losses or out-of-pocket expenses, calculated in its usual fashion, absent manifest error, shall be binding and conclusive. Such losses shall include, without limiting the generality of the foregoing, lost profits and reasonable expenses incurred by such Lender in connection with the re-employment of funds prepaid, repaid, converted or not borrowed, converted or paid, as the case may be. Upon request of the Borrower, such Lender shall provide a certificate setting forth the amount to be paid to it by the Borrower hereunder and calculations therefor. 29 35 Section 2.10 Manner of Payment. (a) Each payment (including prepayments) by the Borrower of the principal of or interest on the Advances, fees, and any other amount owed under this Agreement or any other Loan Document shall be made not later than 1:00 p.m. (Dallas, Texas time) on the date specified for payment under this Agreement to the Administrative Lender at the Administrative Lender's office, in lawful money of the United States of America constituting immediately available funds. (b) If any payment under this Agreement or any other Loan Document shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day, unless such Business Day falls in another calendar month, in which case payment shall be made on the preceding Business Day. Any extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment. (c) The Borrower agrees to pay principal, interest, fees and all other amounts due under the Loan Documents without deduction for set-off or counterclaim or any deduction whatsoever. (d) Each payment by the Borrower in respect of obligations relating to the Revolving Credit Advance and the Letters of Credit (whether for principal, interest, fees or otherwise) shall be made to the Administrative Lender for the account of the Lenders pro rata in accordance with their respective Specified Percentages. Each payment by the Borrower in respect of obligations related to Bid Rate Advances (whether for principal, interest, fees or otherwise) shall be made to the Administrative Lender for the account of each Lender holding such Bid Rate Advance. Notwithstanding anything in this Section 2.10(d) or any other provision of this Agreement or any other Loan Document to the contrary, any payment by the Borrower in respect of any Advances after acceleration of the Advances pursuant to Section 8.2 or any monies received by the Administrative Lender as a result of the exercise of remedies under any Loan Documents after acceleration of the Advances pursuant to Section 8.2 shall be distributed pro rata to each Lender based on the percentage that the outstanding Advances and Reimbursement Obligations owed to such Lender bears to the aggregate Advances and Reimbursement Obligations owed to all Lenders after the payment of the Administrative Lender's expenses incurred on behalf of the Lenders then due and payable. Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR Lending Office is set forth opposite its name in Schedule 1 attached hereto. Each Lender shall have the right at any time and from time to time to designate a different office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending Office. No such designation or transfer shall result in any liability on the part of the Borrower for increased costs or expenses resulting solely from such designation or transfer (except any such transfer which is made by a Lender pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose of complying with Applicable Law). Increased costs for 30 36 expenses resulting from a change in law occurring subsequent to any such designation or transfer shall be deemed not to result solely from such designation or transfer. Section 2.12 Sharing of Payments. Any Lender obtaining a payment (whether voluntary or involuntary, due to the exercise of any right of setoff, or otherwise) on account of its Revolving Credit Advances in excess of its Specified Percentage of all payments made by the Borrower with respect to Revolving Credit Advances shall purchase from each other Lender such participation in the Revolving Credit Advances made by such other Lender as shall be necessary to cause such purchasing Lender to share the excess payment pro rata according to Specified Percentages with each other Lender which is not in default of its obligations hereunder with respect to such Revolving Credit Advance; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest, provided, further that after an Event of Default, such payments will be shared pro rata among all Lenders based on the total amount of all Advances outstanding. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section, to the fullest extent permitted by law, may exercise all its rights of payment (including the right of set off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. Section 2.13 Calculation of LIBOR Rate. The provisions of this Agreement relating to calculation of the LIBOR Rate are included only for the purpose of determining the rate of interest or other amounts to be paid hereunder that are based upon such rate, it being understood that each Lender shall be entitled to fund and maintain its funding of all or any part of a LIBOR Advance as it sees fit. Section 2.14 Booking Loans. Any Lender may make, carry or transfer Advances at, to or for the account of any of its branch offices or the office of any Affiliate. Section 2.15 Taxes. (a) Any and all payments by the Borrower hereunder shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges and withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Administrative Lender, taxes imposed on its overall net income, and franchise taxes imposed on it (including interest and penalties imposed thereon), by the jurisdiction under the laws of which such Lender or the Administrative Lender (as the case may be) is organized or any political subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or the Administrative Lender, (x) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.15) such Lender or the Administrative Lender (as the case may be) receives an amount equal to the sum it would have 31 37 received had no such deductions been made, (y) the Borrower shall make such deductions and (z) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law. (b) In addition, the Borrower agrees to pay any and all stamp and documentary taxes and any and all other excise and property taxes, charges and similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Document (hereinafter referred to as "Other Taxes"). (c) The Borrower will indemnify each Lender and the Administrative Lender for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.15) paid by such Lender or the Administrative Lender (as the case may be) and all liabilities (including penalties, additions to tax, interest and reasonable expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted, other than penalties, additions to tax, interest and expenses arising as a result of gross negligence on the part of such Lender or the Administrative Lender, provided, however, that the Borrower shall have no obligation to indemnify such Lender or the Administrative Lender (i) unless notice has been given by such Lender or the Administrative Lender, as applicable, in a time sufficient to afford the Borrower, in good faith, a reasonable opportunity to contest such payment by such Lender or the Administrative Lender, provided such opportunity to contest exists under Applicable Law, and (ii) until such Lender or the Administrative Lender shall have delivered to the Borrower a certificate setting forth in reasonable detail the basis of the Borrower's obligation to indemnify such Lender or the Administrative Lender pursuant to this Section 2.15. This indemnification shall be made within 30 days from the date such Lender or the Administrative Lender (as the case may be) makes written demand therefor. (d) Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Lender the original or a certified copy of a receipt evidencing payment thereof. If no Taxes are payable in respect of any payment hereunder, the Borrower will furnish to the Administrative Lender a certificate from each appropriate taxing authority, or an opinion of counsel acceptable to the Administrative Lender, in either case stating that such payment is exempt from or not subject to Taxes, provided, however, that such certificate or opinion need only be given if: (i) the Borrower makes any payment from any account located outside the United States, or (ii) the payment is made by a payor that is not a United States Person. For purposes of this Section 2.15 the terms "United States" and "United States Person" shall have the meanings set forth in Section 7701 of the Code. (e) Each Lender which is not a United States Person hereby agrees that: (i) it shall, no later than the Agreement Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 11.06 after the Agreement Date, the date upon 32 38 which such Lender becomes a party hereto) deliver to the Borrower through the Administrative Lender, with a copy to the Administrative Lender: (A) if any lending office is located in the United States of America, two (2) accurate and complete signed originals of Internal Revenue Service Form 4224 or any successor thereto ("Form 4224"), (B) if any lending office is located outside the United States of America, two (2) accurate and complete signed originals of Internal Revenue Service Form 1001 or any successor thereto ("Form 1001"). in each case indicating that such Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees for the account of such lending office or lending offices under this Agreement free from withholding of United States Federal income tax; (ii) if at any time such Lender changes its lending office or lending offices or selects an additional lending office it shall, at the same time or reasonably promptly thereafter but only to the extent the forms previously delivered by it hereunder are no longer effective, deliver to the Borrower through the Administrative Lender, with a copy to the Administrative Lender, in replacement for the forms previously delivered by it hereunder: (A) if such changed or additional lending office is located in the United States of America, two (2) accurate and complete signed originals of Form 4224; or (B) otherwise, two (2) accurate and complete signed originals of Form 1001, in each case indicating that such Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees for the account of such changed or additional lending office under this Agreement free from withholding of United States Federal income tax; (iii) it shall, before or promptly after the occurrence of any event (including the passing of time but excluding any event mentioned in clause (ii) above) requiring a change in the most recent Form 4224 or Form 1001 previously delivered by such Lender and if the delivery of the same be lawful, deliver to the Borrower through the Administrative Lender with a copy to the Administrative Lender, two (2) accurate and complete original signed copies of Form 4224 or Form 1001 in replacement for the forms previously delivered by such Lender; and (iv) it shall, promptly upon the request of the Borrower to that effect, deliver to the Borrower such other forms or similar documentation as may be required from time 33 39 to time by any applicable law, treaty, rule or regulation in order to establish such Lender's tax status for withholding purposes. (f) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.15 shall survive the payment in full of principal and interest hereunder. (g) Any Lender claiming any additional amounts payable pursuant to this Section 2.15 shall use its reasonable best efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its lending office, if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts which may thereafter accrue and would not, in the sole judgment of such Lender, be otherwise disadvantageous to such Lender. (h) Each Lender (and the Administrative Lender with respect to payments to the Administrative Lender for its own account) agrees that (i) it will take all reasonable actions by all usual means to maintain all exemptions, if any, available to it from United States withholding taxes (whether available by treaty, existing administrative waiver, by virtue of the location of any Lender's lending office) and (ii) otherwise cooperate with the Borrower to minimize amounts payable by the Borrower under this Section 2.15; provided, however, the Lenders and the Administrative Lender shall not be obligated by reason of this Section 2.15(h) to contest the payment of any Taxes or Other Taxes or to disclose any information regarding its tax affairs or tax computations or reorder its tax or other affairs or tax or other planning. Section 2.16 Letters of Credit. (a) The Letter of Credit Facility. The Borrower may request the Issuing Bank, on the terms and conditions hereinafter set forth, to issue, and the Issuing Bank shall, if so requested, issue, letters of credit (the "Letters of Credit") for the account of the Borrower from time to time on any Business Day from the date of the initial Advance until the Maturity Date in an aggregate maximum amount (assuming compliance with all conditions to drawing) not to exceed at any time outstanding the lesser of (i) $100,000,000 (the "Letter of Credit Facility"), and (ii) the difference of (A) the Commitment minus (B)the aggregate principal amount of Advances then outstanding. No Letter of Credit shall have an expiration date (including all rights of renewal) later than the earlier of (i) the Maturity Date or (ii) one year after the date of issuance thereof. Immediately upon the issuance of each Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed to have purchased and received from the Issuing Bank, in each case irrevocably and without any further action by any party, an undivided interest and participation in such Letter of Credit, each drawing thereunder and the obligations of the Borrower under this Agreement in respect thereof in an amount equal to the product of (i) such Lender's Specified Percentage of the Commitment times (ii) the maximum amount available to be drawn under such Letter of Credit (assuming compliance with all conditions to drawing). Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of 34 40 Credit under this Section 2.16(a), repay any Advances resulting from drawings thereunder pursuant to Section 2.16(c) and request the issuance of additional Letters of Credit under this Section 2.16(a). During the term of this Agreement, provided that no Default or Event of Default then exists and subject to the same conditions for the issuance of a Letter of Credit set forth in Section 3.2 hereof, the Issuing Bank may at Borrowerns option, automatically renew any expiring Letters of Credit for a period of time not to exceed the earlier of (x)five (5) days prior to the Maturity Date or (y) one year after the date of issuance thereof. (b) Request for Issuance. Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (Dallas time) on the third Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to the Issuing Bank, which shall give to the Administrative Lender and each Lender prompt notice thereof by telex, telecopier or cable. Each Letter of Credit shall be issued upon notice given in accordance with the terms of any separate agreement between the Borrower and the Issuing Bank in form and substance reasonably satisfactory to the Borrower and the Issuing Bank providing for the issuance of Letters of Credit pursuant to this Agreement and containing terms and conditions not inconsistent with this Agreement (a "Letter of Credit Agreement"), provided that if any such terms and conditions are inconsistent with this Agreement, this Agreement shall control. Each such notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by telex, telecopier or cable, specifying therein, the requested (A) date of such issuance (which shall be a Business Day), (B) maximum amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit, (E) form of such Letter of Credit and (F) such other information as shall be required pursuant to the relevant Letter of Credit Agreement. If the requested terms of such Letter of Credit are acceptable to the Issuing Bank in its reasonable discretion, the Issuing Bank shall, subject to this Section 2.16(b), upon fulfillment of the applicable conditions set forth in Article 3 hereof, make such Letter of Credit available to the Borrower at its office referred to in Section 11.1 or as otherwise agreed with the Borrower in connection with such issuance. (c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by the Issuing Bank of a Revolving Credit Advance, which shall bear interest at the applicable Base Rate Basis, in the amount of such draft (but without any requirement for compliance with the conditions set forth in Article 3 hereof). In the event that a drawing under any Letter of Credit is not reimbursed by the Borrower by 11:00 A.M. (Dallas time) on the first Business Day after such drawing, the Issuing Bank shall promptly notify Administrative Lender and each other Lender. Each such Lender shall, on the first Business Day following such notification, make an Revolving Credit Advance, which shall bear interest at the applicable Base Rate Basis, and shall be used to repay the applicable portion of the Issuing Bank's Revolving Credit Advance with respect to such Letter of Credit, in an amount equal to the amount of its participation in such drawing for application to reimburse the Issuing Bank (but without any requirement for compliance with the applicable conditions set forth in Article 3 hereof) and shall make available to the Administrative Lender for the account of the Issuing Bank, by deposit at the Administrative Lender's office, in same day funds, the amount of such Revolving Credit 35 41 Advance. In the event that any Lender fails to make available to the Administrative Lender for the account of the Issuing Bank the amount of such Revolving Credit Advance, the Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon at a rate per annum equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds Rate. (d) Increased Costs. If any change in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof shall either (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit or guarantees issued by, or assets held by, or deposits in or for the account of, the Issuing Bank or any Lender or (ii) impose on the Issuing Bank or any Lender any other condition regarding this Agreement or such Lender or any Letter of Credit, and the result of any event referred to in the preceding clause (i) or (ii) shall be, in the reasonable opinion of the Issuing Bank or any Lender, to increase the cost to the Issuing Bank of issuing or maintaining any Letter of Credit or to any Lender of purchasing any participation therein or making any Advance pursuant to Section 2.16(c) ("Increased Letter of Credit Costs"), then, upon demand by the Issuing Bank or such Lender, the Borrower shall, subject to Section 11.10 hereof, pay to the Issuing Bank or such Lender, from time to time as specified by the Issuing Bank or such Lender, additional amounts that shall be sufficient to compensate the Issuing Bank or such Lender for such Increased Letter of Credit Costs. Notwithstanding the foregoing, any demand for Increased Letter of Credit Costs shall not include any Letter of Credit costs with respect to any period more than 180 days prior to the date that the Issuing Bank or any Lender gives notice to the Borrower of such Increased Letter of Credit Costs unless the effective date of the condition which results in the right to received Increased Letter of Credit Costs is retroactive (the "Increased Letter of Credit Costs Retroactive Effective Date"). If any Increased Letter of Credit Costs has an Increased Costs Letter of Credit Retroactive Effective Date and the Issuing Bank or any Lender demands compensation within 180 days after the date setting the Increased Letter of Credit Costs Effective Date (the "Increased Letter of Credit Costs Set Date"), the Issuing Bank or such Lender, as appropriate, shall have the right to receive such Increased Letter of Credit Costs from the Increased Letter of Credit Retroactive Effective Date. If the Issuing Bank or a Lender does not demand such Increased Letter of Credit Costs within 180 days after the Increased Letter of Credit Costs Set Date, the Issuing Bank or such Lender, as appropriate, may not receive payment of Increased Letter of Credit Costs with respect to any period more than 180 days prior to such demand. A certificate as to the amount of such increased cost, submitted to the Borrower by the Issuing Bank or such Lender, shall include in reasonable detail the basis for the demand for additional compensation and shall be conclusive and binding for all purposes, absent demonstrable error. The obligations of the Borrower under this Section 2.16(d) shall survive termination of this Agreement. The Issuing Bank or any Lender claiming any additional compensation under this Section 2.16(d) shall use reasonable efforts (consistent with legal and regulatory restrictions) to reduce or eliminate any such additional compensation which may thereafter accrue and which efforts would not, in the sole discretion of the Issuing Bank or such Lender, be otherwise disadvantageous. 36 42 (e) Obligations Absolute. The obligations of the Borrower under this Agreement with respect to any Letter of Credit, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit or any Advance pursuant to Section 2.16(c) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of this Agreement, any other Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (collectively, the "L/C Related Documents"); (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of the Letters of Credit or any Revolving Credit Advance pursuant to Section 2.16(c) or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents; (iii) the existence of any claim, set- off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Issuing Bank, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C Related Documents or any unrelated transaction; (iv) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, except to the extent that any payment by the Issuing Bank against any such statement or other document shall be as a result of the Issuing Bank's gross negligence or willful misconduct; (v) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of the Letter of Credit, except for any payment made upon the Issuing Bank's gross negligence or willful misconduct; (vi) any exchange, release or non-perfection of any Collateral, or any release or amendment or waiver of or consent to departure from any Subsidiary Guaranty or any other guarantee, for all or any of the Obligations of the Borrower in respect of the Letters of Credit or any Revolving Credit Advance pursuant to Section2.16(c); or (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor, other than the Issuing's Bank gross negligence or wilful misconduct. 37 43 (f) Compensation for Letters of Credit. (i) Credit Fees. Subject to Section 11.9 hereof, the Borrower shall pay to the Administrative Lender for the account of each Lender a credit fee (which shall be payable quarterly in arrears on each Quarterly Date and on the Maturity Date) on the average daily amount available for drawing under all outstanding Letters of Credit (computed, subject to Section 11.10 hereof, on the basis of a 365-day year for the actual number of days elapsed) at the following per annum percentages, applicable in the following situations:
Applicability Percentage (i) If the Leverage Ratio is not less than 5.0 to 1 1.2500 (ii) If the Leverage Ratio is less than 5.0 to 1 but is not less than 4.5 to 1 1.2500 (iii) If the Leverage Ratio is less than 4.5 to 1 but is not less than 4.0 to 1 0.7500 (iv) If the Leverage Ratio is less than 4.0 to 1 but is not less than 3.5 to 1 0.6250 (v) If the Leverage Ratio is less than 3.5 to 1 but is not less than 3.0 to 1 0.5000 (vi) If the Leverage Ratio is less than 3.0 to 1 but is not less than 2.0 to 1 0.4375 (vii) If the Leverage Ratio is less than 2.0 to 1 0.3750
(ii) Adjustment of Credit Fee. The credit fee payable in respect of the Letters of Credit shall be subject to reduction or increase, as applicable and as set forth in the table in (i) above, on a quarterly basis according to the performance of the Borrower as tested by the Leverage Ratio. Except as set forth in the last sentence hereof, any such increase or reduction in such fee shall be effective on the third Business Day following the date of receipt of the applicable financial statements. If financial statements of the Borrower setting forth the Leverage Ratio are not received by the Administrative Lender by the date required pursuant to Section 6.1 hereof, the fee payable in respect of the Letters of Credit shall be determined as if the Leverage Ratio is not less than 5.0 to 1 until such time as such financial statements are received. For the last fiscal quarter of any fiscal year of the Borrower, the Borrower may provide its unaudited financial statements, subject only to year-end adjustments, for the purpose of adjusting the Letter of Credit fee. Notwithstanding anything above to the contrary, if the compliance certificate required to be delivered pursuant to Section 7.5(b) hereof, prior to any proposed acquisition, indicates that the Leverage Ratio after giving effect to the proposed acquisition would result in an 38 44 adjustment of the Letter of Credit fee, such fee shall be increased or decreased, as the case may be, as of the date of such acquisition. (iii) Issuance Fee. Subject to Section 11.10 hereof, the Borrower shall pay to the Administrative Lender, for the sole account of the Issuing Bank, an issuance fee of $500 on the date of issuance of each Letter of Credit. (g) L/C Cash Collateral Account. (i) Upon the occurrence of an Event of Default and demand by the Administrative Lender pursuant to Section 8.2(c), other than an Event of Default pursuant to Section 8.1(f) or 8.1(g) hereof upon such event the referenced sums will become immediately due and payable without further action by the Administrative Lender, the Borrower will promptly pay to the Administrative Lender in immediately available funds an amount equal to 100% of the maximum amount then available to be drawn under the Letters of Credit then outstanding. Any amounts so received by the Administrative Lender shall be deposited by the Administrative Lender in a deposit account maintained by the Issuing Bank (the "L/C Cash Collateral Account"). (ii) As security for the payment of all Reimbursement Obligations and for any other Obligations, the Borrower hereby grants, conveys, assigns, pledges, sets over and transfers to the Administrative Lender (for the benefit of the Issuing Bank and Lenders), and creates in the Administrative Lender's favor (for the benefit of the Issuing Bank and Lenders) a Lien in, all money, instruments and securities at any time held in or acquired in connection with the L/C Cash Collateral Account, together with all proceeds thereof. The L/C Cash Collateral Account shall be under the sole dominion and control of the Administrative Lender and the Borrower shall have no right to withdraw or to cause the Administrative Lender to withdraw any funds deposited in the L/C Cash Collateral Account except as otherwise provided in Section 2.16(g)(iii). At any time and from time to time, upon the Administrative Lender's request, the Borrower promptly shall execute and deliver any and all such further instruments and documents, including UCC financing statements, as may be necessary, appropriate or desirable in the Administrative Lender's judgment to obtain the full benefits (including perfection and priority) of the security interest created or intended to be created by this paragraph (ii) and of the rights and powers herein granted. The Borrower shall not create or suffer to exist any Lien on any amounts or investments held in the L/C Cash Collateral Account other than the Lien granted under this paragraph (ii) and Liens arising by operation of Law and not by contract which secure amounts not yet due and payable. 39 45 (iii) The Administrative Lender shall (A) apply any funds in the L/C Cash Collateral Account on account of Reimbursement Obligations when the same become due and payable if and to the extent that the Borrower shall fail directly to pay such Reimbursement Obligations, (B) after the Maturity Date, apply any proceeds remaining in the L/C Cash Collateral Account first to pay any unpaid Obligations then outstanding hereunder and then to refund any remaining amount to the Borrower, and (C) provided no Default or Event of Default shall be in existence, return any funds in the L/C Cash Collateral Account to the Borrower. (iv) The Borrower, no more than once in any calendar month, may direct the Administrative Lender to invest the funds held in the L/C Cash Collateral Account (so long as the aggregate amount of such funds exceeds any relevant minimum investment requirement) in (A) direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any agency thereof and (B) one or more other types of investments permitted by the Determining Lenders, in each case with such maturities as the Borrower, with the consent of the Determining Lenders, may specify, pending application of such funds on account of Reimbursement Obligations or on account of other Obligations, as the case may be. In the absence of any such direction from the Borrower, the Administrative Lender shall invest the funds held in the L/C Cash Collateral Account (so long as the aggregate amount of such funds exceeds any relevant minimum investment requirement) in one or more types of investments with the consent of the Determining Lenders with such maturities as the Borrower, with the consent of the Determining Lenders, may specify, pending application of such funds on account of Reimbursement Obligations or on account of other Obligations, as the case may be. All such investments shall be made in the Administrative Lender's name for the account of the Lenders. The Borrower recognizes that any losses or taxes with respect to such investments shall be borne solely by the Borrower, and the Borrower agrees to hold the Administrative Lender and the Lenders harmless from any and all such losses and taxes. Administrative Lender may liquidate any investment held in the L/C Cash Collateral Account in order to apply the proceeds of such investment on account of the Reimbursement Obligations (or on account of any other Obligation then due and payable, as the case may be) without regard to whether such investment has matured and without liability for any penalty or other fee incurred (with respect to which the Borrower hereby agrees to reimburse the Administrative Lender) as a result of such application. (v) The Borrower shall pay to the Administrative Lender the fees customarily charged by the Issuing Bank with respect to the maintenance of accounts similar to the L/C Cash Collateral Account in an amount not to exceed $1,000 in aggregate per calendar year. 40 46 ARTICLE 3 Conditions Precedent Section 3.1 Conditions Precedent to Closing and the Initial Advance and the Letter of Credit. The obligation of each Lender to sign this Agreement and to make the initial Advance and the obligation of the Issuing Bank to issue the initial Letter of Credit is subject to receipt by the Administrative Lender of each of the following, in form and substance satisfactory to the Administrative Lender, with a copy (except for the notes) for each Lender: (a) a loan certificate of the Borrower certifying as to the accuracy of its representations and warranties in the Loan Documents, certifying that no Default or Material Adverse Effect, except as listed in Schedule 11 hereto, has occurred since the last financial statements delivered to the Lenders prior to the Agreement Date, certifying Borrower is in compliance with all covenants in the Agreement, and including a certificate of incumbency with respect to each Authorized Signatory, and including (i) a copy of the Articles of Incorporation of the Borrower, certified to be true, complete and correct by the secretary of state of its state of incorporation, (ii) a copy of the By-Laws of the Borrower, as in effect on the Agreement Date, (iii) a copy of the resolutions of the Borrower authorizing it to execute, deliver and perform this Agreement, the Revolving Credit Notes, the Bid Rate Notes, and the other Loan Documents to which it is a party, and (iv) a copy of a certificate of goodstanding and a certificate of existence for its state of incorporation and each state in which it is or should be qualified to do business; (b) a certificate of an officer acceptable to the Lenders of each Restricted Subsidiary, certifying as to the incumbency of the officers signing the Loan Documents to which it is a party, and including (i) a copy of its Articles of Incorporation, certified as true, complete and correct by the secretary of state of its state of incorporation, (ii) a copy of its By-Laws, as in effect on the Agreement Date, (iii) a copy of the resolutions authorizing it to execute, deliver and perform the Loan Documents to which it is a party, and (iv) a copy of a certificate of good standing and a certificate of existence for its state of incorporation and each state in which it is or should be qualified to do business; (c) duly executed Revolving Credit Notes, payable to the order of each Lender and in an amount for each Lender equal to its Specified Percentage of the Commitment; (d) duly executed Bid Rate Notes, payable to the order of each Lender in the principal amount of $300,000,000; (e) a duly executed and completed Borrower Pledge Agreement, dated as of the Agreement Date, granting the Lenders a lien and security interest in (i) the Pledged Stock owned directly by the Borrower and (ii) the Holdings Note; (f) duly executed and completed Subsidiary Pledge Agreements, dated as of the Agreement Date, granting the Lenders a lien and security interest in the (i) Pledged Stock owned 41 47 directly by Holdings, Radio Licenses, Television Licenses, Metroplex Licenses and CCR HoustonNevada, and (ii) the Intercompany Notes (other than the Holdings Note); (g) the Pledged Stock, together with stock powers duly executed in blank; (h) the Intercompany Notes, duly endorsed; (i) a duly executed and completed Subsidiary Guaranty, dated as of the Agreement Date executed by Holdings, Management, Memphis, Radio Licenses, Television Licenses, Metroplex Licenses, Radio, Television, Metroplex, CCRE, CCR Houston-Nevada and Productions; (j) an opinion of counsel and of FCC counsel to the Borrower and its Restricted Subsidiaries addressed to the Lenders and in form and substance satisfactory to the Lenders, dated the Agreement Date; (k) copies of insurance binders or certificates covering the assets of the Borrower and its Subsidiaries, and meeting the requirements of Section 5.5 hereof; (l) reimbursement for Administrative Lender for Special Counsel's reasonable fees and expenses rendered through the date hereof; (m) evidence that all corporate proceedings of the Borrower and its Restricted Subsidiaries taken in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory in form and substance to the Lenders and Special Counsel; and the Lenders shall have received copies of all documents or other evidence which the Administrative Lender, Special Counsel or any Lender may reasonably request in connection with such transactions; (n) copies of the following consolidated and consolidating financial statements for the Borrower and its Subsidiaries, as of and for the period ended June 30, 1995: (i) consolidated and consolidating balance sheets as of the end of such period, and (ii) consolidated and consolidating statements of income and changes in cash for such period; which financial statements shall set forth in comparative form figures for the corresponding periods in the previous fiscal year, all in reasonable detail and certified by an Authorized Signatory to the best of his knowledge to be complete and correct and prepared in accordance with GAAP (other than footnotes thereto), subject to year-end adjustment; (o) the facility fee for the account of each Lender as required pursuant to Section 2.4(b) hereof; (p) all Indebtedness owing by the Borrower under the Existing Credit Agreement shall have been refinanced in full; and 42 48 (q) in form and substance satisfactory to the Lenders and Special Counsel, such other documents, instruments and certificates as the Administrative Lender or any Lender may reasonably require in connection with the transactions contemplated hereby, including without limitation the status, organization or authority of the Borrower or any Restricted Subsidiary, and the enforceability of and security for the Obligation. Section 3.2 Conditions Precedent to All Advances and Letters of Credit. The obligation of each Lender to make each Advance (including the initial Advance) and the obligation of the Issuing Bank to issue each Letter of Credit (including the initial Letter of Credit) hereunder is subject to fulfillment of the following conditions immediately prior to or contemporaneously with each such Advance or issuance: (a) With respect to Advances (other than Refinancing Advances that are Refinancing Advances of Revolving Credit Advances) and each issuance of aLetter of Credit, all of the representations and warranties of the Borrower under this Agreement, which, pursuant to Section 4.2 hereof, are made at and as of the time of such Advance or issuance, shall be true and correct at such time inall material respects, both before and after giving effect to the application of the proceeds of the Advance or issuance; (b) The incumbency of the Authorized Signatories shall be as stated in the certificate of incumbency delivered in the Borrower's loan certificate pursuant to Section 3.1(a) or as subsequently modified and reflected in a certificate of incumbency delivered to the Administrative Lender. The Lenders may, without waiving this condition, consider it fulfilled and a representation by the Borrower made to such effect if no written notice to the contrary, dated on or before the date of such Advance or issuance, is received by the Administrative Lender from the Borrower prior to the making of such Advance or issuance; (c) There shall not exist a Default hereunder, with respect to Advances (other than Refinancing Advances that are Refinancing Advances of Revolving Credit Advances) and with respect to issuance of each Letter of Credit, or an Event of Default, with respect to any Refinancing Advance, and, with respect to each Advance (other than a Refinancing Advance that is a Refinancing Advances of a Revolving Credit Advance) and with respect to issuance of each Letter of Credit, the Administrative Lender shall have received written or telephonic certification thereof by an Authorized Signatory (which certification, if telephonic, shall be followed promptly by written certification); (d) The aggregate Advances and amount available for draws under Letters of Credit, after giving effect to such proposed Advance or Letter of Credit, shall not exceed the maximum principal amount then permitted to be outstanding hereunder; and (e) The Administrative Lender shall have received all such other certificates, reports, statements or other documents as the Administrative Lender or any Lender may reasonably request. 43 49 Each request by the Borrower to the Administrative Lender or the Issuing Bank, as appropriate, for an Advance or the issuance of a Letter of Credit shall constitute a representation and warranty by the Borrower as of the date of the making of such Advance or the issuance of such Letter of Credit that all the conditions contained in this Section 3.2 have been satisfied. ARTICLE 4 Representations and Warranties Section 4.1 Representations and Warranties. The Borrower hereby represents and warrants to each Lender as follows: (a) Organization; Power; Qualification. As of the Agreement Date, (i) the respective jurisdictions of incorporation and percentage ownership by the Borrower or another Subsidiary of the Subsidiaries listed on Schedule 7 are true and correct and (ii) all Subsidiaries are Restricted Subsidiaries. Each of the Borrower and its Restricted Subsidiaries is a corporation or partnership duly organized, validly existing and in good standing under the laws of its state of organization. Each of the Borrower and its Restricted Subsidiaries has the corporate or organizational power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted. Each of the Borrower and its Restricted Subsidiaries is duly qualified, in good standing and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization. (b) Authorization. The Borrower has corporate power and has taken all necessary corporate action to authorize it to borrow hereunder. Each of the Borrower and its Restricted Subsidiaries has corporate power and has taken all necessary corporate action to execute, deliver and perform the Loan Documents to which it is party in accordance with the terms thereof, and to consummate the transactions contemplated thereby. Each Loan Document has been duly executed and delivered by the Borrower or the Restricted Subsidiary executing it. Each of the Loan Documents to which the Borrower and its Restricted Subsidiaries are party is a legal, valid and binding respective obligation of the Borrower or the Restricted Subsidiary, as applicable, enforceable in accordance with its terms, subject, to enforcement of remedies, to the following qualifications: (i) equitable principles generally, and (ii) bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower or any Restricted Subsidiary). (c) Compliance with Other Loan Documents and Contemplated Transactions. The execution, delivery and performance by the Borrower and its Restricted Subsidiaries of the other Loan Documents to which they are respectively a party, and the consummation of the transactions contemplated thereby, do not and will not (i) require any consent or approval not already obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a breach of, or 44 50 constitute a default under the articles of incorporation or by-laws of the Borrower or any Restricted Subsidiary, or under any Necessary Authorization, indenture, agreement or other instrument, to which the Borrower or any Restricted Subsidiary is a party or by which they or their respective properties may be bound, or (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any Restricted Subsidiary, except Permitted Liens. (d) Business. The Borrower and its Restricted Subsidiaries are engaged solely in the communications and media broadcasting business and activities related thereto (including, without limitation, radio and television broadcasting, print, productions, billboards, power transmission rentals and sales and real property rentals and sales, but only to the extent that such real property rentals and sales arise from the lease or sale of properties previously used by the Borrower or its Restricted Subsidiaries in the communications and media broadcasting business). (e) Licenses, etc. All Necessary Authorizations have been duly authorized and obtained, and are in full force and effect. The Borrower and its Restricted Subsidiaries are and will continue to be in compliance in all material respects with all provisions thereof.No Necessary Authorization is the subject of any pending or, to the best of the Borrower's knowledge, threatened challenge or revocation. (f) Compliance with Law. The Borrower and its Restricted Subsidiaries are in compliance with all Applicable Laws, the violation of which could reasonably be expected to have a Material Adverse Effect. The Borrower and its Restricted Subsidiaries have duly and timely filed all reports, statements and filings that are required to be filed by any of them under the Communications Act, and are in all material respects in compliance therewith, including without limitation the rules and regulations of the FCC relating to the operation of television and radio stations. The Borrower and its Restricted Subsidiaries have obtained all appropriate approvals and consents of, and have made all filings with, the FCC in connection with the acquisition and ownership of each of their television and radio stations. No Person has filed or submitted any document or instrument to the FCC challenging or contesting the FCC order approving any assignment of a FCC license to the Borrower or any of its Restricted Subsidiaries. (g) Title to Properties. The Borrower and its Restricted Subsidiaries have good and indefeasible title to, or a valid leasehold interest in, all of their material assets. None of their assets are subject to any Liens, except Permitted Liens. No financing statement or other Lien filing (except relating to Permitted Liens) is on file in any state or jurisdiction that names the Borrower or any of its Restricted Subsidiaries as debtor or covers (or purports to cover) any assets of the Borrower or any of its Restricted Subsidiaries. The Borrower and its Restricted Subsidiaries have not signed any such financing statement or filing, nor any security agreement authorizing any Person to file any such financing statement or filing. (h) Litigation. Except as reflected on Schedule 3 hereto, there is no action, suit, investigation or proceeding pending against, or, to the best of the Borrower's knowledge, threatened against the Borrower or any of its Restricted Subsidiaries, or in any other manner 45 51 relating directly and materially adversely to the Borrower, any of its Restricted Subsidiaries, or any of their material properties, in any court or before any arbitrator of any kind or before or by any governmental body the result of which could reasonably be expected to require the payment of money by the Borrower or any Restricted Subsidiary in an amount of $500,000 or more in any one such action, suit or proceeding or $2,500,000 or more in the aggregate for all such actions, suits or proceedings. (i) Taxes. All federal, state and other tax returns of the Borrower and its Restricted Subsidiaries required by law to be filed have been duly filed and all federal, state and other taxes, assessments and other governmental charges or levies upon the Borrower, its Restricted Subsidiaries or any of their properties, income, profits and assets, which are due and payable, have been paid, unless the same are being diligently contested in good faith by appropriate proceedings, with adequate reserves established therefor, and no Lien (other than a Permitted Lien) has attached and no foreclosure, distraint, sale or similar proceedings have been commenced. The charges, accruals and reserves on the books of the Borrower and its Restricted Subsidiaries in respect of their taxes are, in the judgment of the Borrower, adequate. (j) Financial Statements; Material Liabilities. The Borrower has furnished or caused to be furnished to the Lenders copies of its December 31, 1994, financial statements, which are prepared in good faith and complete in all material respects and present fairly in accordance with GAAP the financial position of the Borrower and its Restricted Subsidiaries as at such dates and the results of operations for the periods then ended, subject to normal year-end adjustments. The Borrower and its Restricted Subsidiaries have no material liabilities, contingent or otherwise, nor material losses, except as disclosed in writing to the Lenders prior to the Agreement Date. (k) No Adverse Change. Since December 31, 1994, no event or circumstances has occurred or arisen that could reasonably be expected to have a Material Adverse Effect except as listed on Schedule 11 hereto. (l) ERISA. None of the Borrower or its Controlled Group maintains or contributes to any Plan other than those disclosed to the Administrative Lender in writing. Each such Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and any other applicable Federal or state law, rule or regulation. With respect to each Plan of the Borrower and each member of its Controlled Group (other than a Multiemployer Plan), all reports required under ERISA or any other Applicable Law to be filed with any governmental authority, the failure of which to file could reasonably result in liability of the Borrower or any member of its Controlled Group in excess of $100,000, have been duly filed. All such reports are true and correct in all material respects as of the date given. No such Plan of the Borrower or any member of its Controlled Group has been terminated nor has any accumulated funding deficiency (as defined in Section 412(a) of the Code) been incurred (without regard to any waiver granted under Section 412 of the Code), nor has any funding waiver from the Internal Revenue Service been received or requested. None of the Borrower or any member of its Controlled Group has failed to make any contribution or pay any amount due or owing as 46 52 required by Section 412 of the Code or Section 302 of ERISA or the terms of any such Plan prior to the due date under Section 412 of the Code and Section 302 of ERISA. There has been no ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C), 4068(f), 4063(a) or 4043(b) of ERISA with respect to any Plan or trust of the Borrower or any member of its Controlled Group since the effective date of ERISA. The value of the assets of each Plan (other than a Multiemployer Plan) of the Borrower and each member of its Controlled Group equaled or exceeded the present value of the benefit liabilities, as defined in Title IV of ERISA, of each such Plan as of the most recent valuation date using Plan actuarial assumptions at such date. There are no pending or, to the best of the Borrower's knowledge, threatened claims, lawsuits or actions (other than routine claims for benefits in the ordinary course) asserted or instituted against, and neither the Borrower nor any member of its Controlled Group has knowledge of any threatened litigation or claims against, (i) the assets of any Plan or trust or against any fiduciary of a Plan with respect to the operation of such Plan, or (ii) the assets of any employee welfare benefit plan within the meaning of Section 3(1) or ERISA, or against any fiduciary thereof with respect to the operation of any such plan. None of the Borrower or any member of its Controlled Group has engaged in any prohibited transactions, within the meaning of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan. None of the Borrower or any member of its Controlled Group has withdrawn from any Multiemployer Plan, nor has incurred or reasonably expects to incur (A) any liability under Title IV of ERISA (other than premiums due under Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event has occurred which with the giving of notice under Section 4219 of ERISA would result in such liability) under Section 4201 of ERISA as a result of a complete or partial withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA. None of the Borrower, any member of its Controlled Group, or any organization to which the Borrower or any member of its Controlled Group is a successor or parent corporation within the meaning of ERISA Section 4069(b), has engaged in a transaction within the meaning of ERISA Section 4069. None of the Borrower or any member of its Controlled Group maintains or has established any welfare benefit plan within the meaning of Section 3(1) of ERISA which provides for continuing benefits or coverage for any participant or any beneficiary of any participant after such participant's termination of employment except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and the regulations thereunder, and at the expense of the participant or the beneficiary of the participant, or retiree medical liabilities. Each of Borrower and its Controlled Group which maintains a welfare benefit plan within the meaning of Section 3(1) of ERISA has complied in all material respects with any applicable notice and continuation requirements of COBRA and the regulations thereunder. (m) Compliance with Regulations G, T, U and X. The Borrower is not engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying any margin stock within the meaning of Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, and no part of the proceeds of the Advances or the Letters of Credit will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. No assets 47 53 of the Borrower and its Restricted Subsidiaries are margin stock, and none of the Pledged Stock is margin stock. None of the Borrower and its Restricted Subsidiaries, nor any agent acting on their behalf, have taken or will knowingly take any action which might cause this Agreement or any Loan Documents to violate any regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as in effect now or as the same may hereafter be in effect. (n) Governmental Regulation. The Borrower and its Restricted Subsidiaries are not required to obtain any Necessary Authorization that has not already been obtained from, or effect any material filing or registration that has not already been effected with, the FCC or any other federal, state or local regulatory authority in connection with the execution and delivery of this Agreement or any other Loan Document, or the performance thereof (other than any enforcement of remedies by the Administrative Lender on behalf of the Lenders), in accordance with their respective terms, including any borrowings hereunder. (o) Absence of Default. The Borrower and its Restricted Subsidiaries are in compliance in all material respects with all of the provisions of their articles of incorporation and by-laws, and no event has occurred or failed to occur, which has not been remedied or waived, the occurrence or nonoccurrence of which constitutes, or which with the passage of time or giving of notice or both would constitute, (i) an Event of Default or (ii) adefault by the Borrower or any of its Restricted Subsidiaries under any material indenture, agreement or other instrument, or any judgment, decree or order to which the Borrower or any of its Restricted Subsidiaries is a party or by which they or any of their material properties is bound. (p) Investment Company Act. The Borrower is not required to register under the provisions of the Investment Company Act of 1940, as amended. Neither the entering into or performance by the Borrower of this Agreement nor the issuance of the Notes violates any provision of such act or requires any consent, approval, or authorization of, or registration with, the Securities and Exchange Commission or any other governmental or public body or authority pursuant to any provisions of such act. (q) Environmental Matters. Neither the Borrower nor any Subsidiary has any actual knowledge or reason to believe that any substance deemed hazardous by any Applicable Environmental Law, has been installed on any real property now owned by the Borrower or any of its Subsidiaries. The Borrower and its Subsidiaries are not in violation of or subject to any existing, pending or, to the best of the Borrower's knowledge, threatened investigation or inquiry by any governmental authority or to any material remedial obligations under any Applicable Environmental Laws, and this representation and warranty would continue to be true and correct following disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any, pertaining to any real property of the Borrower and its Subsidiaries. The Borrower and its Subsidiaries have not obtained and are not required to obtain any permits, licenses or similar authorizations to construct, occupy, operate or use any buildings, improvements, fixtures, and equipment forming a part of any real property of the Borrower or any Subsidiary by reason of any Applicable Environmental Laws. The Borrower and its 48 54 Subsidiaries undertook, at the time of acquisition of any real property, reasonable inquiry into the previous ownership and uses of such real property consistent with good commercial or customary practice. The Borrower and its Subsidiaries have taken all reasonable steps to determine, and the Borrower and its Subsidiaries have no actual knowledge or reason to believe, after reasonable investigation, that any hazardous substances or solid wastes have been disposed of or otherwise released on or to the real property of the Borrower or any of its Subsidiaries in any manner or quantities which would be deemed a violation of the Applicable Environmental Laws. (r) Certain Agreements. The Capitalized Lease Obligations and the Affiliation Agreements have been duly authorized, executed and delivered by the Borrower or its Restricted Subsidiaries, as applicable, and (to the best of the Borrower's knowledge) the other parties thereto. Except as disclosed to each Lender, there is no litigation, or, to the best of the Borrower's knowledge, claim of breach or default, pending or threatened with respect to any Capitalized Lease Obligations or Affiliation Agreement that could reasonably be expected to adversely effect any such lease or contract. The Borrower has no knowledge of any default by any seller of any of the Borrower's or its Restricted Subsidiaries' television or radio stations under any obligations of such seller to the Borrower or any Restricted Subsidiary. The Borrower has no notice of or belief that any party to any Capitalized Lease Obligation or Affiliation Agreement is contemplating a breach, default or termination for any reason of such contract or lease, other than as disclosed in writing and reasonably acceptable to the Lenders. The Borrower has provided, or caused to be provided, to the Administrative Lender complete and correct copies of or access to the Capitalized Lease Obligations and Affiliation Agreements, all as amended, together with all exhibits and schedules thereto. (s) Valid Issuance of Securities. All Pledged Stock has been duly authorized and validly issued, and is fully paid and nonassessable. The Capital Stock described on Exhibit A to the Pledge Agreements constitutes all the issued and outstanding Capital Stock of the Subsidiaries of the Borrower or the Subsidiaries of another Subsidiary. No Person has conversion rights with respect to, or any subscription rights, calls, commitments or claims of any character for, or any repurchase or redemption options relating to, the Pledged Stock, except for those listed on Schedule 5 hereto. The Pledged Stock, when issued or sold, was either (i) registered or qualified under applicable federal or state securities laws, or (ii) exempt therefrom. (t) Certain Fees. No broker's, finder's or other fee or commission will be payable by the Borrower (other than to the Lenders hereunder) with respect to the making of the Commitments or the Advances hereunder or the issuance of any Letters of Credit. The Borrower agrees to indemnify and hold harmless the Administrative Lender and each Lender from and against any claims, demand, liability, proceedings, costs or expenses asserted with respect to or arising in connection with any such fees or commissions. (u) Compliance. Attached as Schedule 4 hereto is a complete list of all material licenses, consents, authorizations, permits and Necessary Authorizations as of the Agreement 49 55 Date. Such licenses, consents, permits and authorizations constitute all that are necessary, appropriate or advisable for each of the Borrower and its Restricted Subsidiaries to operate its business and own its properties, and are in full force and effect. No event has occurred which permits (or with the passage of time would permit) the revocation or termination of any such license, consents, permits and authorizations, or which could result in the imposition of any restriction thereon of such a nature that could reasonably be expected to have a Material Adverse Effect. (v) Patents, Etc. The Borrower and its Restricted Subsidiaries have obtained all patents, trademarks, service- marks, trade names, copyrights, licenses and other rights, free from burdensome restrictions, that are necessary for the operation of their business as presently conducted and as proposed to be conducted, the loss of which could reasonably be expected to have a Material Adverse Effect. Nothing has come to the attention of the Borrower or any of its Restricted Subsidiaries to the effect that (i) any process, method, part or other material presently contemplated to be employed by the Borrower or any Restricted Subsidiary may infringe any patent, trademark, service-mark, trade name, copyright, license or other right owned by any other Person, or (ii) there is pending or overtly threatened any claim or litigation against or affecting the Borrower or any Restricted Subsidiary contesting its right to sell or use any such process, method, part or other material. (w) Disclosure. Neither this Agreement nor any other document, certificate or statement which has been furnished to any Lender by or on behalf of the Borrower or any Restricted Subsidiary in connection herewith contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statement contained herein and therein not misleading at the time it was furnished. There is no fact known to the Borrower and not known to the public generally that could reasonably be expected to materially adversely affect the assets or business of the Borrower and its Restricted Subsidiaries, or in the future could reasonably be expected (so far as the Borrower can now foresee) to have a Material Adverse Effect, which has not been set forth in this Agreement or in the documents, certificates and statements furnished to the Lenders by or on behalf of the Borrower prior to the date hereof in connection with the transaction contemplated hereby. Section 4.2 Survival of Representations and Warranties, etc. All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made at and as of the Agreement Date and at and as of the date of each Advance and each Letter of Credit, and each shall be true and correct when made, except to the extent (a) previously fulfilled in accordance with the terms hereof, (b) applicable to a specific date or otherwise subsequently inapplicable, or (c) previously waived in writing by the Determining Lenders with respect to any particular factual circumstance. All such representations and warranties shall survive, and not be waived by, the execution hereof by any Lender, any investigation or inquiry by any Lender, or by the making of any Advance under this Agreement. 50 56 ARTICLE 5 General Covenants So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled): Section 5.1 Preservation of Existence and Similar Matters. The Borrower shall, and shall cause each Restricted Subsidiary to: (a) preserve and maintain, or timely obtain and thereafter preserveand maintain, its existence, rights, franchises, licenses, authorizations, consents, privileges and all other Necessary Authorizations from federal, state and local governmental bodies and any tribunal (regulatory or otherwise), the loss of which could have a Material Adverse Effect; and (b) qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization, unless the failure to do so could not have a Material Adverse Effect. Section 5.2 Business; Compliance with Applicable Law. The Borrower and its Restricted Subsidiaries shall (a) engage substantially in the media or communication related business and activities related thereto, and (b) comply in all material respects with the requirements of all Applicable Law, the failure of which could reasonably be expected to have a Material Adverse Effect. Section 5.3 Maintenance of Properties. The Borrower shall, and shall cause each Restricted Subsidiary to, maintain or cause to be maintained all its properties (whether owned or held under lease) in reasonably good repair, working order and condition, taken as a whole, and from time to time make or cause to be made all appropriate repairs, renewals, replacements, additions, betterments and improvements thereto. Section 5.4 Accounting Methods and Financial Records. The Borrower shall, and shall cause each Restricted Subsidiary to, maintain a system of accounting established and administered in accordance with GAAP, keep adequate records and books of account in which complete entries will be made and all transactions reflected in accordance with GAAP, and keep accurate and complete records of its respective assets. The Borrower and each of its Restricted Subsidiaries shall maintain a fiscal year ending on December 31. Section 5.5 Insurance. The Borrower shall, and shall cause each Restricted Subsidiary to, maintain insurance from responsible companies in such amounts and against such risks as shall be customary and usual in the industry for companies of similar size and capability, but in no event less than the amount and types insured as of the Agreement Date. Each insurance policy shall provide for at least 30 days' prior notice to the Administrative Lender of any proposed termination or cancellation of such policy, whether on account of default or otherwise, 51 57 the loss of which could, individually or in the aggregate, reasonably be expected to have Material Adverse Effect. Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall cause each Restricted Subsidiary to, pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or its income or properties prior to the date on which penalties attach thereto, and all lawful material claims for labor, materials and supplies which, if unpaid, might become a Lien upon any of its properties; except that no such tax, assessment, charge, levy or claim need be paid which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the appropriate books, but only so long as no Lien (other than a Permitted Lien) shall attach with respect thereto and no foreclosure, distraint, sale or similar proceedings shall have been commenced. The Borrower shall, and shall cause each Restricted Subsidiary to, timely file all information returns required by federal, state or local tax authorities. Section 5.7 Visits and Inspections. The Borrower shall, and shall cause each Restricted Subsidiary to, promptly permit representatives of the Administrative Lender or any Lender from time to time to (a) visit and inspect the properties of the Borrower and Restricted Subsidiary as often as the Administrative Lender or any Lender shall deem advisable, (b) inspect and make extracts from and copies of the Borrower's and each Restricted Subsidiary's books and records, and (c) discuss with the Borrower's and each Restricted Subsidiary's directors, officers, employees and auditors its business, assets, liabilities, financial positions, results of operations and business prospects. Section 5.8 Payment of Indebtedness. Subject to Section 5.6 hereof, the Borrower shall, and shall cause each Restricted Subsidiary to, pay its Indebtedness when and as the same becomes due, other than amounts (other than the Obligations) duly and diligently disputed in good faith. Section 5.9 Use of Proceeds. The Borrower shall use the proceeds of Advances and Letters of Credit to make acquisitions permitted under Section 7.5 hereof, to make Capital Expenditures, to make Investments (including advances to Subsidiaries) permitted pursuant to Section 7.3 hereof, to refinance all outstanding Indebtedness under the Existing Credit Agreement, for working capital and for other general corporate purposes. Section 5.10 Indemnity. (a) The Borrower agrees to defend, protect, indemnify and hold harmless the Administrative Lender, the Issuing Bank, each Lender, each of their respective affiliates, and each of their respective (including such affiliates') officers, directors, employees, agents, attorneys, shareholders and consultants (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth herein) of each of the foregoing (collectively, "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, 52 58 suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto), imposed on, incurred by, or asserted against such Indemnitees (whether direct, indirect or consequential and whether based on any federal, state, or local laws and regulations, under common law or at equitable cause, or on contract, tort or otherwise, arising from or connected with the past, present or future operations of the Borrower or its predecessors in interest, or the past, present or future environmental condition of property of the Borrower), in any manner relating to or arising out of this Agreement, the Loan Documents, or any act, event or transaction or alleged act, event or transaction relating or attendant thereto, the making of or any participations in the Advances or the Letters of Credit and the management of the Advances and the Letters of Credit, including in connection with, or as a result, in whole or in part, of any ordinary or mere negligence of Administrative Lender, the Issuing Bank or any Lender (other than those matters raised exclusively by a participant against the Administrative Lender, the Issuing Bank or any Lender and not the Borrower), or the use or intended use of the proceeds of the Advances and the Letters of Credit hereunder, or in connection with any investigation of any potential matter covered hereby, but excluding any claim or liability that arises as the result of the gross negligence or willful misconduct of any Indemnitee, as finally judicially determined by a court of competent jurisdiction, but excluding matters raised by one Lender against another Lender or by any shareholders of a Lender against a Lender or its management (collectively, "Indemnified Matters"); provided however, that so long as no Event of Default shall have occurred and be continuing, there shall be no settlement by the Indemnitees or any of them with respect to any Indemnified Matter without prior consultation with the Borrower. (b) In addition, the Borrower shall periodically, upon request, reimburse each Indemnitee for its reasonable legal and other actual expenses (including the cost of any investigation and preparation) incurred in connection with any Indemnified Matter; provided, however, that the Indemnitees agree that they shall endeavor to use legal counsel common to all Indemnitees in connection with any Indemnified Matter unless any such Indemnitee shall reasonably determine, in its sole discretion, that the use of such common legal counsel would conflict with its interests in such Indemnified Matter. If for any reason the foregoing indemnification is unavailable to any Indemnitee or insufficient to hold any Indemnitee harmless with respect to Indemnified Matters, then the Borrower shall contribute to the amount paid or payable by such Indemnitee as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Borrower and the Borrower's stockholders on the one hand and such Indemnitee on the other hand but also the relative fault of the Borrower and such Indemnitee, as well as any other relevant equitable considerations. The reimbursement, indemnity and contribution obligations under this Section shall be in addition to any liability which the Borrower may otherwise have, shall extend upon the same terms and conditions to each Indemnitee, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Borrower, the Administrative 53 59 Lender, the Issuing Bank, the Lenders and all other Indemnitees. This Section shall survive any termination of this Agreement and payment of the Obligations. Section 5.11 Environmental Law Compliance. The use which the Borrower or any Subsidiary intends to make of any real property owned by it will not result in the disposal or other release of any hazardous substance or solid waste on or to such real property in any manner or quantities which would be deemed a violation of the Applicable Environmental Laws. Borrower further agrees to exercise reasonable due diligence in the acquisition of real property in connection with compliance with Applicable Environmental Laws. As used herein, the terms "hazardous substance" and "release" as used in this Section shall have the meanings specified in CERCLA (as defined in the definition of Applicable Environmental Laws), and the terms "solid waste" and "disposal" shall have the meanings specified in RCRA (as defined in the definition of Applicable Environmental Laws); provided, however, that if CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment; and provided further, to the extent that any other law applicable to the Borrower, any Subsidiary or any of their properties establishes a meaning for "hazardous substance," "release," "solid waste," or "disposal" which is broader than that specified in either CERCLA or RCRA, such broader meaning shall apply. The Borrower agrees to indemnify and hold the Administrative Lender, the Issuing Bank and each Lender harmless from and against, and to reimburse them with respect to, any and all claims, demands, causes of action, loss, damage, liabilities, costs and expenses (including attorneys' fees and courts costs) of any kind or character, known or unknown, fixed or contingent, asserted against or incurred by any of them at any time and from time to time by reason of or arising out of (a) the failure of the Borrower or any Subsidiary to perform any obligation hereunder regarding asbestos or Applicable Environmental Laws, (b) any violation on or before the Release Date of any Applicable Environmental Law in effect on or before the Release Date, and (c) any act, omission, event or circumstance existing or occurring on or prior to the Release Date (including without limitation the presence on such real property or release from such real property of hazardous substances or solid wastes disposed of or otherwise released on or prior to the Release Date), resulting from or in connection with the ownership of the real property, regardless of whether the act, omission, event or circumstance constituted a violation of any Applicable Environmental Law at the time of its existence or occurrence, or whether the act, omission, event or circumstance is caused by or relates to the negligence of any Indemnified Person; provided that, the Borrower shall not be under any obligation to indemnify the Administrative Lender, the Issuing Bank or any Lender to the extent that any such liability arises as the result of the gross negligence or willful misconduct of such Person, as finally judicially determined by a court of competent jurisdiction. The provisions of this paragraph shall survive the Release Date and shall continue thereafter in full force and effect. 54 60 ARTICLE 6 Information Covenants So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled), the Borrower shall furnish or cause to be furnished to the Administrative Lender: Section 6.1 Quarterly Financial Statements and Information. Within 45 days after the end of each fiscal quarter, consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at the end of such quarter and the related consolidated and consolidating statements of income and consolidated statements of changes in cash flow for such quarter and for the elapsed portion of the year ended with the last day of such quarter, all of which shall be certified by the president or chief financial officer of the Borrower, to be, in his or her opinion, complete and correct in all material respects and to present fairly, in accordance with GAAP, the financial position and results of operations of the Borrower and its Subsidiaries as at the end of and for such period, and for the elapsed portion of the year ended with the last day of such period, subject only to normal year-end adjustments. In addition, the Borrower shall furnish within such time period a reconciliation of such financial statements setting forth the difference in financial position and results of operations between its Subsidiaries and its Restricted Subsidiaries for such period and for the elapsed portion of the year ended with the last day on such period, subject to sound year-end adjustments. Section 6.2 Annual Financial Statements and Information; Certificate of No Default. (a) Within 90 days after the end of each fiscal year, a copy of (i) the consolidated balance sheet of the Borrower and its Subsidiaries, as of the end of the current and prior fiscal years and (ii) consolidated statements of earnings, statements of changes in shareholders' equity, and statements of changes in cash flow as of and through the end of such fiscal year, all of which are prepared in accordance with GAAP, and certified by independent certified public accountants acceptable to the Lenders, whose opinion shall be in scope and substance in accordance with generally accepted auditing standards and shall be unqualified. In addition, the Borrower shall furnish within such time period an unaudited reconciliation of such financial statements setting forth the difference in financial position and results of operations between its Subsidiaries and its Restricted Subsidiaries as of and through the end of such fiscal year. (b) Simultaneously with the delivery of the statements required by this Section 6.2, a letter from the Borrower's public accountants certifying that no Default was detected during the examination of the Borrower and its Restricted Subsidiaries, and authorizing the Borrower to deliver such financial statements and opinion thereon to the Administrative Lender and Lenders pursuant to this Agreement. 55 61 (c) As soon as available, but in any event within 60 days following the end of each fiscal year, a copy of the annual consolidated operating budget of the Borrower and its Subsidiaries for the succeeding fiscal year. Section 6.3 Compliance Certificates. At the time financial statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of an Authorized Signatory: (a) setting forth at the end of such period, a calculation of the Leverage Ratio, as well as certifications and arithmetical calculations required to establish whether the Borrower and its Restricted Subsidiaries were in compliance with the requirements of Sections 7.1(d), (e), (f), (g) and (h), 7.3(h), 7.6, 7.7, 7.10, 7.11, 7.12, 7.13 and 7.14 hereof, which shall be substantially in the form of Exhibit H hereto; (b) setting forth the aggregate amount of outstanding Advances and Reimbursement Obligations and certifying as to compliance herewith; and (c) stating that, to the best of his or her knowledge after due inquiry, no Default has occurred as at the end of such period, or if a Default has occurred, disclosing each such Default and its nature, when it occurred, whether it is continuing and the steps being taken with respect to such Default. Section 6.4 Copies of Other Reports and Notices. (a) Promptly upon their becoming available, a copy of (i) all material reports or letters submitted to the Borrower or any Restricted Subsidiary by accountants in connection with any annual, interim or special audit, including without limitation any report prepared in connection with the annual audit referred to in Section 6.2 hereof, and any other comment letter submitted to management in connection with any such audit, (ii) each financial statement, report, notice or proxy statement sent by the Borrower or any Restricted Subsidiary to stockholders generally, (iii) each regular or periodic report and any registration statement (other than statements on Form S-8) or prospectus (or material written communication in respect of any thereof) filed by the Borrower or any subsidiary with any securities exchange, with the Securities and Exchange Commission or any successor agency, and (iv) all press releases concerning material financial aspects of the Borrower or any Restricted Subsidiary; (b) Promptly upon becoming aware that (i) the holder(s) of any note(s) or other evidence of indebtedness or other security of the Borrower or any Restricted Subsidiary in excess of $750,000 in the aggregate has given notice or taken any action with respect to a breach, failure to perform, claimed default or event of default thereunder, (ii) any party to any Capitalized Lease Obligations or any Local Marketing Agreement has given notice or taken any action with respect to a breach, failure to perform, claimed default or event of default thereunder, (iii) any occurrence or non-occurrence of any event which constitutes or which with the passage of time or giving of notice or both could constitute a material breach by the Borrower or any Restricted Subsidiary under any material agreement or instrument which could 56 62 reasonably be expected to result in a liability in excess of $750,000, other than this Agreement to which the Borrower or any Restricted Subsidiary is a party or by which any of their properties may be bound, or (iv) any event, circumstance or condition which could reasonably be expected to have a Material Adverse Effect, a written notice specifying the details thereof (or the nature of any claimed default or event of default) and what action is being taken or is proposed to be taken with respect thereto; provided, however, no notice shall be required to be delivered hereunder with respect to any event, circumstance or condition set forth in clause (i), (ii) or (iii) immediately preceding if, in the opinion of counsel to the Borrower or such Restricted Subsidiary, there is no reasonable possibility of an adverse determination with respect to such event, circumstance or condition; (c) Promptly upon receipt thereof, information with respect to and copies of any notices received from the FCC or any other federal, state or local regulatory agencies or any tribunal relating to any order, ruling, law, information or policy that relates to a breach of or noncompliance with the Communications Act, or could reasonably be expected to result in the payment of money by the Borrower or any Restricted Subsidiary in an amount of $750,000 or more in the aggregate, or otherwise have a Material Adverse Effect, or result in the loss or suspension of any Necessary Authorization; provided, however, no information shall be required to be delivered hereunder if, in the opinion of counsel to the Borrower or such Restricted Subsidiary, there is no reasonable possibility of an adverse determination with respect to such notice; (d) Promptly upon receipt from any governmental agency, or any government, political subdivision or other entity, any material notice, correspondence, hearing, proceeding or order regarding or affecting the Borrower, any Subsidiary, or any of their properties or businesses; and (e) From time to time and promptly upon each request, such data, certificates, reports, statements, opinions of counsel, documents or further information regarding the assets, business, liabilities, financial position, projections, results of operations or business prospects of the Borrower and its Subsidiaries, as the Administrative Lender or any Lender may reasonably request. Section 6.5 Notice of Litigation, Default and Other Matters. Prompt notice of the following events after the Borrower has knowledge or notice thereof: (a) The commencement of all proceedings and investigations by or before the FCC or any other governmental body, and all actions and proceedings in any court or before any arbitrator involving claims for damages, fines or penalties (including punitive damages) in excess of $750,000 in the aggregate (after deducting the amount with respect to the Borrower or any Restricted Subsidiary such Person is insured, provided such claim has not been denied), against or in any other way relating directly to the Borrower, any Restricted Subsidiary, or any of their properties or businesses; provided, however, no notice shall be required to be delivered 57 63 hereunder if, in the opinion of counsel to the Borrower or such Restricted Subsidiary, there is no reasonable possibility of an adverse determination in such action or proceeding; (b) Promptly upon the happening of any condition or event which constitutes a Default, a written notice specifying the nature and period of existence thereof and what action is being taken or is proposed to be taken with respect thereto; and (c) Any material adverse change with respect to the business, assets, liabilities, financial position, results of operations or prospective business of the Borrower or any Subsidiary, other than changes in the ordinary course of business which have not had and are not likely to have a Material Adverse Effect. Section 6.6 ERISA Reporting Requirements. (a) Promptly and in any event (i) within 30 days after the Borrower or any member of its Controlled Group knows or has reason to know that any ERISA Event described in clause (a) of the definition of ERISA Event or any event described in Section 4063(a) of ERISA with respect to any Plan of the Borrower or any member of its Controlled Group has occurred, and (ii) within 10 days after the Borrower or any member of its Controlled Group knows or has reason to know that any other ERISA Event with respect to any Plan of the Borrower or any member of its Controlled Group has occurred or a request for a minimum funding waiver under Section 412 of the Code with respect to any Plan of the Borrower or any member of its Controlled Group, a written notice describing such event and describing what action is being taken or is proposed to be taken with respect thereto, together with a copy of any notice of event that is given to the PBGC; (b) Promptly and in any event within two Business Days after receipt thereof by the Borrower or any member of its Controlled Group from the PBGC, copies of each notice received by the Borrower or any member of its Controlled Group of the PBGC's intention to terminate any Plan or to have a trustee appointed to administer any Plan; (c) Promptly and in any event within 30 days after the filing thereof by the Borrower or any member of its Controlled Group with the United States Department of Labor, the Internal Revenue Service or the PBGC, copies of each annual and other report (including Schedule B thereto) with respect to each Plan; (d) Promptly and in any event within 30 days after receipt thereof, a copy of any notice, determination letter, ruling or opinion the Borrower or any member of its Controlled Group receives from the PBGC, the United States Department of Labor or the Internal Revenue Service with respect to any Plan; (e) Promptly, and in any event within 10 Business Days after receipt thereof, a copy of any correspondence the Borrower or any member of its Controlled Group receives from the Plan Sponsor (as defined by Section 4001(a)(10) of ERISA) of any Plan concerning potential 58 64 withdrawal liability pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief financial officer of the Borrower or such member of its Controlled Group setting forth details as to the events giving rise to such potential withdrawal liability and the action which the Borrower or such member of its Controlled Group is taking or proposes to take with respect thereto; (f) Notification within 30 days of any material increases in the benefits of any existing Plan which is not a Multiemployer Plan, or the establishment of any new Plans, or the commencement of contributions to any Plan to which the Borrower or any member of its Controlled Group was not previously contributing; (g) Notification within three Business Days after the Borrower or any member of its Controlled Group knows or has reason to know that the Borrower or any such member of its Controlled Group has or intends to file a notice of intent to terminate any Plan under a distress termination within the meaning of Section 4041(c) of ERISA and a copy of such notice; and (h) Promptly after receipt of written notice of commencement thereof, notice of all actions, suits and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Borrower or any member of its Controlled Group with respect to any Plan, except those which, in the aggregate, if adversely determined could not have a Material Adverse Effect. ARTICLE 7 Negative Covenants So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled): Section7.1 Indebtedness. The Borrower shall not, and shall not permit any Restricted Subsidiary to, create, assume, incur or otherwise become or remain obligated in respect of, or permit to be outstanding, or suffer to exist any Indebtedness, except: (a) Indebtedness under the Loan Documents; (b) Accounts payable (including film right payables), accrued expenses, deferred revenue items, pension liabilities and customer advance payments incurred in the ordinary course of business; (c) Guaranties to the extent permitted under Section 7.6 hereof; (d) Capitalized Lease Obligations and Indebtedness incurred to purchase tangible personal property, in an aggregate amount not to exceed $7,500,000 at any time; 59 65 (e) Indebtedness evidenced by the Intercompany Notes; and (f) Institutional Debt in an aggregate amount not to exceed $300,000,000 at any time outstanding; provided, that, (i) such debt is unsecured, (ii) such debt is at all times on terms and conditions to the reasonable satisfaction of the Determining Lenders, (iii) such debt has a final maturity and Weighted Average Life to Maturity (computed from the date of incurrence of such debt) at least one day longer than the Maturity Date and the Weighted Average Life to Maturity of the Obligations, and (iv) the Net Cash Proceeds of such issuance are applied in accordance with Section 2.5(d) hereof; (g) Indebtedness set forth on Schedule 9 hereto, and all renewals and extensions (but not increases) thereof; (h) Indebtedness not to exceed $60,000,000 United States dollars in the aggregate principal amount outstanding at any time, provided that the terms of such Indebtedness are reasonably acceptable to the Administrative Lender; (i) Indebtedness (in addition to Indebtedness otherwise permitted pursuant to this Section 7.1) of its Restricted Subsidiaries not to exceed $10,000,000 in aggregate principal amount outstanding at any time; and (j) Indebtedness (in addition to the Indebtedness otherwise permitted pursuant to this Section 7.1) of the Borrower and its Restricted Subsidiaries not to exceed in aggregate principal amount outstanding at any time 100% of Operating Cash Flow for the immediately preceding four fiscal quarters, provided, however, the incurrence of Indebtedness otherwise permitted pursuant to clauses (c), (d), (e), (f), (h), (i) and (j) immediately preceding shall be permitted only if there shall exist no Default prior to or after giving effect to any such proposed Indebtedness. Section 7.2 Liens. The Borrower shall not, and shall not permit any Restricted Subsidiary to, create, assume, incur, permit or suffer to exist, directly or indirectly, any Lien on any of its assets, whether now owned or hereafter acquired, except Permitted Liens. The Borrower shall not, and shall not permit any Restricted Subsidiary to, agree with any other Person that it shall not create, assume, incur, permit or suffer to exist or to be created, assumed, incurred or permitted to exist, directly or indirectly, any Lien on any of its assets. Section 7.3 Investments. The Borrower shall not, and shall not permit any Subsidiary to, make, own or maintain any Investment, except that the Borrower may purchase or otherwise acquire and own and maintain: (a) Marketable, direct obligations of, or guaranteed by, the United States of America and maturing within 365 days of the date of purchase; 60 66 (b) Commercial paper issued by U.S. corporations that have a rating of A-1/P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; (c) Certificates of deposit of domestic banks maturing within 365 days of the date of purchase, which banks' debt obligations have one of the two highest ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation; (d) Securities issued by U.S. corporations that have one of the two highest ratings obtainable from Moody's or S&P; (e) Investments in newly-formed or existing Restricted Subsidiaries (i) that are subject to the provisions hereof, (ii) that are or immediately become party to the Subsidiary Guaranty (iii) whose Capital Stock is pledged to the Lenders to secure the Obligations, and (iv) whose Intercompany Notes are pledged to the Lenders to secure the Obligations; (f) Accounts receivable that arise in the ordinary course of business and are payable on standard terms; (g) Investments which are described on Schedule 8 hereto; and (h) Provided there shall exist no Default prior to or after giving effect to any such proposed Investments (which may include, without limitation, Investments in Unrestricted Subsidiaries), other Investments in communication or media related businesses not to exceed, at any time outstanding, an aggregate amount (determined using the purchase price or cost of such Investments without any adjustment for depreciation or amortization) equal to the sum of (i) 150% of Operating Cash Flow for the immediately preceding four fiscal quarters, plus (ii) 100% of the first $50,000,000 of Net Cash Proceeds received by the Borrower and its Subsidiaries from the issuance of Equity after the Agreement Date, plus (iii) 50% of Net Cash Proceeds in excess of $50,000,000 received by the Borrower and its Subsidiaries from the issuance of Equity (including any conversion of subordinated convertible debentures, which constitutes Subordinated Debt, into Equity) after the Agreement Date, plus (iv) 50% of the Net Cash Proceeds received by the Borrower and its Subsidiaries from the issuance of any subordinated convertible debentures after the Agreement Date. Section 7.4 Amendment and Waiver. The Borrower shall not, and shall not permit any Restricted Subsidiary to, enter into any amendment of any material term or provision of its articles of incorporation or by-laws. In addition, the Borrower shall not, and shall not permit any Restricted Subsidiary to, enter into any amendment of, or agree to or accept any waiver of any of the provisions of, any Necessary Authorization, unless (a) the Determining Lenders consent to such amendment and (b) the Lenders are provided with 10 days' written notice prior to the execution or effectiveness of the proposed amendment or waiver. 61 67 Section 7.5 Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries. The Borrower shall not, and shall not permit any Restricted Subsidiary to, at any time: (a) liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up; or sell, lease, abandon, transfer or otherwise dispose of all or any part of its assets, properties or business, other than immaterial assets sold in the ordinary course of business, or dispositions whose proceeds are applied in accordance with Section 2.5(c) hereof; (b) acquire (i) all or any substantial part of the assets, property or business of any other Person, or (ii) any assets that constitute a division or operating unit of the business of any other Person; provided, however, that, so long as there shall exist no Default prior to or after giving effect to a proposed transaction, the Borrower or any Restricted Subsidiary may, subject to the limitations set forth in Section 7.3(h) hereof and in this Section 7.5(b), purchase assets, property or business of another Person, so long as (i) the Lenders shall have received prior written notice at least 20 Business Days prior to the date of such purchase, (ii) the Administrative Lender shall have received at least 10 Business Days prior to the date of such purchase a compliance certificate in the form required by Section 6.3 hereof, but setting forth the covenant calculations described in Section 6.3(a) hereof both prior to and after giving effect to the proposed purchase, (iii) such acquisition shall be pursuant to documentation acceptable to the Administrative Lender, (iv) such assets, property or business shall be in or relate to the communications or media related business, and (v) the Administrative Lender shall have received copies of all documents, instruments, opinions and other information relating to the seller and assets to be acquired as it may reasonably request; (c) subject to the limitations set forth in Section 7.3(h) hereof, enter into any merger or consolidation; provided, however, that, so long as there shall exist no Default prior to or after giving effect to a proposed transaction, the Borrower or any Restricted Subsidiary may merge or consolidate with another Person, so long as (i) the Lenders shall have received prior written notice at least 20 Business Days prior to the date of such transaction, (ii) the Administrative Lender shall have received at least 10 Business Days prior to the date of such transaction a compliance certificate in the form required by Section 6.3 hereof, but setting forth the covenant calculations described in Section 6.3(a) hereof both prior to and after giving effect to the proposed merger or consolidation, (iii) such merger or consolidation shall be pursuant to documentation acceptable to the Administrative Lender, (iv) the Person with whom such merger or consolidation is being consummated with shall be engaged in a communication or media related business, (v) the Borrower or such Restricted Subsidiary shall be the surviving entity, provided, that if the Borrower merges or consolidates with a Restricted Subsidiary, the Borrower shall be the surviving entity, and (vi) the Administrative Lender shall have received copies of all documents, instruments, opinions and other information relating to the seller and assets to be acquired as it may reasonably request; or (d) create or acquire any Subsidiary, except as permitted by Sections 7.3(e) and (h) hereof. 62 68 Section 7.6 Guaranties. Other than those guaranties referenced on Schedule 10 hereto, the Borrower shall not, and shall not permit any Restricted Subsidiary to, at any time make or issue any Guaranty, or assume, be obligated with respect to, or permit to be outstanding any Guaranty, of any obligation of any other Person except Guaranties in an aggregate amount not to exceed $10,000,000 at any time; provided, however, such Guaranties shall be permitted only if prior to such proposed Guaranty or after giving effect thereto there shall exist no Default. Section 7.7 Dividends. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly declare or pay any Dividend; provided, however, (a) any Subsidiary may declare and pay Dividends to the Borrower or any Restricted Subsidiary and (b) the Borrower may declare and pay Dividends (including amounts which become Dividends as a result of the proviso in the definition of Dividends) on any date in an amount not to exceed the sum of (y) 25% of Excess Cash Flow for the immediately preceding twenty four month period ending on the date of such proposed Dividend minus (z) the aggregate amount of Dividends previously declared and paid during such twenty-fourth month period; provided, further, however, notwithstanding clause (b) immediately preceding to the contrary, the Borrower shall pay no such Dividends unless there shall exist no Default prior to or after giving effect to any such proposed Dividend. Section 7.8 Affiliate Transactions. The Borrower shall not, and shall not permit any Subsidiary to, at any time engage in any transaction with an Affiliate, nor make an assignment or other transfer of any of its assets or properties to any Affiliate, on terms materially less advantageous to the Borrower or Subsidiary than would be the case if such transaction had been effected with a nonAffiliate (other than advances to employees in the ordinary course of business). The Borrower shall not, and shall not permit any Subsidiary to, in any event incur or suffer to exist any Indebtedness or Guaranty in favor of any Affiliate, unless such Affiliate shall subordinate the payment and performance thereof on terms satisfactory to the Lenders in their sole discretion, and otherwise upon terms, conditions and documentation, and in a manner satisfactory to Determining Lenders. Notwithstanding the foregoing, the Borrower may loan the proceeds of Advances to Subsidiaries that are Restricted Subsidiaries, so long as (a) there shall exist no Default prior to or after giving effect to such proposed loan and (b) such advances are evidenced by Intercompany Notes that have been pledged pursuant to the Pledge Agreements and for which entries in the financial records of the Borrower and its Restricted Subsidiaries are made evidencing such loans and repayments thereof. Section 7.9 Compliance with ERISA. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, or permit any member of its Controlled Group to directly or indirectly, (a) terminate any Plan so as to result in any material (in the opinion of the Determining Lenders) liability to the Borrower or any member of its Controlled Group, (b) permit to exist any ERISA Event, or any other event or condition which presents the risk of a material (in the opinion of the Determining Lenders) liability of the Borrower or any member of its Controlled Group, (c) make a complete or partial withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan so as to result in any material (in the opinion of the Determining Lenders) liability to the Borrower or any member of its Controlled 63 69 Group, (d) enter into any new Plan or modify any existing Plan so as to increase its obligations thereunder except in the ordinary course of business consistent with past practice which could result in any material (in the opinion of the Determining Lenders) liability to the Borrower or any member of its Controlled Group, or (e) permit the present value of all benefit liabilities, as defined in Title IV of ERISA, under each Plan of the Borrower or any member of its Controlled Group (using the actuarial assumptions utilized by the PBGC upon termination of aplan) to materially (in the opinion of the Determining Lenders) exceed the fair market value of Plan assets allocable to such benefits all determined as of the most recent valuation date for each such Plan. Section 7.10 Leverage Ratio. At the end of each fiscal quarter occurring during the periods indicated below, the Borrower shall not permit the Leverage Ratio to be greater than:
Period Ratio From date hereof through December 31, 1996 5.25 to 1 Thereafter through December 31, 1997 5.00 to 1 Thereafter through December 31, 1998 4.75 to 1 Thereafter 4.50 to 1
Provided, that in the event the Collateral is released at any time during the period from the Agreement Date through December 31, 1996, the Leverage Ratio during such period shall not be greater than 5.00 to 1. Section 7.11 Fixed Charges Coverage Ratio. The Borrower shall not permit the ratio of (a) Operating Cash Flow for the four consecutive fiscal quarters then ending to (b) Fixed Charges for such fiscal quarters as of the last day of any fiscal quarter during the term of this Agreement, to be less than 1.10 to 1. Section 7.12 Interest Coverage Ratio. At the end of each fiscal quarter, the Borrower shall not permit the ratio of (a) Operating Cash Flow for the four consecutive fiscal quarters then ending, to (b) interest expense of the Borrower and its Subsidiaries for such quarters, to be less than 2.0 to 1. Section7.13 Debt Service Coverage Ratio. The Borrower shall not permit the ratio of (a) Operating Cash Flow for the four consecutive fiscal quarters then ending, to (b) Pro-Forma Debt Service for the four succeeding fiscal quarters, to be less than 1.25 to 1 at the end of each fiscal quarter during the term of this Agreement. Section 7.14 Capital Stock of the Borrower. The Borrower shall not, and shall not permit any Restricted Subsidiary to, make or permit any issuance, transfer, assignment, distribution, 64 70 mortgage, pledge or gift of any shares of Pledged Stock, except in connection with issuances permitted by Schedule 5 hereto and then only if such shares are pledged and delivered to the Administrative Lender pursuant to the pledge agreements. Section 7.15 Sale and Leaseback. The Borrower shall not, and shall not permit any Restricted Subsidiary to, enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or leases such assets. Section 7.16 Sale or Discount of Receivables. The Borrower shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly sell, with or without recourse, for discount or otherwise, any notes or accounts receivable. Section 7.17 Business of Television Licenses and Radio Licenses and Metroplex Licenses. Notwithstanding anything in this Agreement to the contrary, Borrower shall not permit Television Licenses, Radio Licenses, or Metroplex Licenses to engage in any business other than the ownership of (i) FCC licenses and Necessary Authorizations for the operation of Television, Radio and Metroplex, respectively, and (ii) at least 95% of the Capital Stock of Television and 100% of the Capital Stock of Radio and Metroplex, respectively. Section 7.18 Subordinated Debt. The Borrower shall not, and shall not permit any Subsidiary to, (a) make any payment of principal, interest, premium, fee or otherwise with respect to Subordinated Debt except in strict accordance with the terms of the Subordinated Debt documentation, (b) prepay, redeem, repurchase or defease, or set aside funds for the prepayment, redemption, repurchase or defeasance of all or any portion of the Subordinated Debt or (c) amend or change (or take any action or fail to take any action the result of which is an effective amendment or change) or accept any waiver or consent with respect to, any document or instrument in connection with any Subordinated Debt that would result in (i) an increase in the outstanding principal amount of the Subordinated Debt, (ii) a change in any principal, interest, fees, or other amounts payable under the Subordinated Debt (including without limitation a waiver or action that results in the waiver of any payment default under the Subordinated Debt), (iii) a change in any date fixed for any payment of principal, interest, fees, or other amounts payable under the Subordinated Debt (including, without limitation, as a result of any redemption, defeasance or otherwise), (iv) a change in any percentage of holders of the Subordinated Debt required to take (or refrain from taking) any action, (v) a change in any financial covenant, (vi) a change in any remedy or right of the holders of the Subordinated Debt, (vii) a change in any covenant, term or provision which would result in such term or provision being more restrictive than the terms of this Agreement and the other Loan Documents, (viii) a change that grants or permits the granting of any security interest or Lien on any asset or property of the Borrower or any Subsidiary to secure any Subordinated Debt, or (ix) a change in any term or provision of any document or instrument in connection with any Subordinated Debt that could have, in any material respect, an adverse effect on the interests of Lenders. Section 7.19 Other Agreements. Except as otherwise provided in this Agreement, neither Borrower nor any Restricted Subsidiary shall enter into any agreement pursuant to which the 65 71 ability of the Borrower or a Restricted Subsidiary to pay any money, dividend or other type of advance to, or otherwise make any other Investment in, the Borrower or any Restricted Subsidiary shall be limited or in which such payment would be a default or event of default. ARTICLE 8 Default Section 8.1 Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event, and whether voluntary, involuntary, or effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any governmental or non-governmental body: (a) Any representation or warranty made under any Loan Document shall prove to have been incorrect or misleading in any material respect when made; (b) The Borrower shall default in the payment of (i) any interest under any Note or any fees payable hereunder or any other costs, fees, expenses or other amounts payable hereunder or under the Loan Documents, when due, which Default is not cured within three days from the date such payment became due by payment of such late amount, or (ii) any principal under any of the Notes; (c) The Borrower or any Restricted Subsidiary shall default in the performance or observance of any agreement or covenant contained in Section 5.1 or Article 7 hereof; (d) The Borrower or any Restricted Subsidiary shall default in the performance or observance of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 8.1, and such default shall not be cured within a period of 30 days after the earlier of written notice from the Administrative Lender thereof or actual notice thereof; (e) There shall occur any default or breach in the performance or observance of any agreement or covenant (after the expiration of any applicable grace period) or breach of any representation or warranty contained in any of the Loan Documents (other than this Agreement); (f) There shall be entered a decree or order by a court having jurisdiction in the premises constituting an order for relief in respect of the Borrower or any Subsidiary under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official of the Borrower or any Subsidiary, or of any substantial part of their respective properties, or ordering the winding-up or liquidation of the affairs of the Borrower or any Subsidiary, and any such decree or order shall continue unstayed and in effect for a period of 60 consecutive days; 66 72 (g) The Borrower or any Subsidiary shall file a petition, answer or consent seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, or the Borrower or any Subsidiary shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking of possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Borrower or any Subsidiary or of any substantial part of their respective properties, or the Borrower or any Subsidiary shall fail generally to pay its debts as they become due, or the Borrower or any Subsidiary shall take any action in furtherance of any such action; (h) A final judgment or judgments shall be entered by any court against the Borrower or any Subsidiary for the payment of money which exceeds $500,000 in the aggregate, or a warrant of attachment or execution or similar process shall be issued or levied against property of the Borrower or any Subsidiary which, together with all other such property of the Borrower and its Subsidiaries subject to other such process, exceeds in value $500,000 in the aggregate, and if such judgment or award is not insured or, within 30 days after the entry, issue or levy thereof, such judgment, warrant or process shall not have been paid or discharged or stayed pending appeal, or if, after the expiration of any such stay, such judgment, warrant or process shall not have been paid or discharged; (i) With respect to any Plan of the Borrower or any member of its Controlled Group: (i) the Borrower, any such member, or any other party-in interest or disqualified person shall engage in transactions which in the aggregate would reasonably result in a direct or indirect liability to the Borrower or any member of its Controlled Group in excess of $750,000 under Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or any member of its Controlled Group shall incur any accumulated funding deficiency, as defined in Section 412 of the Code, in the aggregate in excess of $750,000, or request a funding waiver from the Internal Revenue Service for contributions in the aggregate in excess of $750,000; (iii) the Borrower or any member of its Controlled Group shall incur any withdrawal liability in the aggregate in excess of $250,000 as a result of a complete or partial withdrawal within the meaning of Section 4203 or 4205 of ERISA; (iv) the Borrower or any member of its Controlled Group shall fail to make a required contribution by the due date under Section 412 of the Code or Section 302 of ERISA which would result in the imposition of a lien under Section 412 of the Code or Section 302 of ERISA; (v) the Borrower, any member of its Controlled Group or any Plan sponsor shall notify the PBGC of an intent to terminate, or the PBGC shall institute proceedings to terminate, or the PBGC shall institute proceedings to terminate, any Plan; (vi) a Reportable Event shall occur with respect to a Plan, and within 15 days after the reporting of such Reportable Event to the Administrative Lender, the Administrative Lender shall have notified the Borrower in writing that the Determining Lenders have made a determination that, on the basis of such Reportable Event, there are reasonable grounds for the termination of such Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer such Plan and as a result thereof an Event of Default shall have occurred hereunder; (vii) a trustee shall be appointed by a court of competent jurisdiction to administer any Plan or the assets thereof; (viii) the benefits of any Plan shall be increased, or the Borrower 67 73 or any member of its Controlled Group shall begin to maintain, or begin to contribute to, any Plan, without the prior written consent of the Determining Lenders; or (ix) any ERISA Event with respect to a Plan shall have occurred, and 30 days thereafter (A) such ERISA Event, other than such event described in clause (vi) of the definition of ERISA Event herein, (if correctable) shall not have been corrected and (B) the then present value of such Plan's benefit liabilities, as defined in Title IV of ERISA, shall exceed the then current value of assets accumulated in such Plan; provided, however, that the events listed in subsections (v) through (ix) shall constitute Events of Default only if, as of the date thereof or any subsequent date, the maximum amount of liability that the Borrower or any member of its Controlled Group could incur in the aggregate under Section 4062, 4063, 4064, 4219 or 4023 of ERISA or any other provision of law with respect to all such Plans, computed by the actuary of the Plan taking into account any applicable rules and regulations of the PBGC at such time, and based on the actuarial assumptions used by the Plan, resulting from or otherwise associated with such event exceeds $750,000; (j) All or any material portion of the Collateral or the Loan Documents shall be the subject of any proceeding instituted by any Person other than a Lender (except in connection with any Lender's exercise of any remedies under the Loan Documents), or there shall exist any litigation or threatened litigation with respect to all or any material portion of the Collateral or the Loan Documents, or any Person shall challenge in any manner whatsoever the validity or enforceability of all or any portion of the Loan Documents or the Collateral; provided, however, that during any such time any such circumstance shall be bonded or stayed in accordance with Applicable Law and to the satisfaction of the Determining Lenders, such circumstance shall not be an Event of Default; (k) The Borrower or any Restricted Subsidiary shall default in the payment of any Indebtedness in an aggregate amount of $750,000 or more beyond any grace period provided with respect thereto, or shall default in the performance of any agreement or instrument under which such Indebtedness is created or evidenced beyond any applicable grace period, if the effect of such default is to permit or cause the holder of such Indebtedness (or a trustee on behalf of any such holder) to cause such Indebtedness to become due prior to its date of maturity; (l) Less than 90% of the issued and outstanding Capital Stock of the Restricted Subsidiaries of the Borrower shall be owned, directly or indirectly, by the Borrower and by management of the Borrower; except that, with respect to the Australian subsidiaries, Borrower shall own less than 50% of the Capital Stock of such subsidiaries, and with respect to CCC-Houston, Borrower shall own less than 79% of such subsidiary; (m) The Borrower or any Subsidiary shall fail to comply in any material respect with the Communications Act, or any rule or regulation promulgated by the FCC; (n) Any material Necessary Authorization shall be revoked; or there shall occur a material default under any material Necessary Authorization by the Borrower or any Subsidiary beyond any applicable grace period; or any proceedings shall in any way be brought by any 68 74 Person to challenge the validity or enforceability of any material Necessary Authorization and the FCC shall designate the Necessary Authorization for a revocation hearing; or proceedings for the renewal of any material Necessary Authorization shall not be commenced at least 90 days prior to the expiration thereof; or any material Necessary Authorization shall expire due to termination, nonrenewal or for any other reason, or shall be designated for a revocation hearing; (o) Any lease of the Borrower or any Restricted Subsidiary shall terminate or cease to be effective, and termination or cessation thereof could reasonably be expected to have a Material Adverse Effect; provided, however, that termination or cessation of a lease shall not constitute an Event of Default if another lease reasonably satisfactory to the Determining Lenders is contemporaneously substituted therefor; (p) Any material provision of any Loan Document shall for any reason cease to be valid and binding on or enforceable against any party to it (other than the Administrative Lender or any Lender) in all material respects, or any such party shall so state in writing; or (q) There shall exist any breach or default of any management agreement or contract of the Borrower or any Restricted Subsidiary, or any such management agreement or contract shall terminate in accordance with its terms and shall not be renewed among the parties upon substantially similar terms, and such breach, default or termination could reasonably be expected to have a Material Adverse Effect. Section 8.2 Remedies. If an Event of Default shall have occurred and shall be continuing: (a) With the exception of an Event of Default specified in Section 8.1(f) or (g) hereof, the Administrative Lender shall, upon the direction of the Determining Lenders, terminate the Commitments and/or declare the principal of and interest on the Advances and all Obligations and other amounts owed under the Loan Documents to be forthwith due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, anything in the Loan Documents to the contrary notwithstanding. (b) Upon the occurrence of an Event of Default specified in Section 8.1(f) or (g) hereof, such principal, interest and other amounts shall thereupon and concurrently therewith become due and payable and the Commitments shall forthwith terminate, all without any action by the Administrative Lender, any Lender or any holders of the Notes and without presentment, demand, protest or other notice of any kind, all of which are expressly waived, anything in the Loan Documents to the contrary notwithstanding. (c) If any Letter of Credit shall be then outstanding, the Administrative Lender may (or, upon the direction of the Determining Lenders, shall) demand upon the Borrower to, and forthwith upon such demand, the Borrower shall, pay to the Administrative Lender in same day funds at the office of the Administrative Lender on such demand for deposit in the L/C Cash Collateral Account, an amount equal to the maximum amount available to be drawn under the 69 75 Letters of Credit then outstanding; provided, however, that upon the occurrence of an Event of Default pursuant to Section 8.1(f) or 8.1 (g) hereof, such amount shall become immediately due and payable without the requirement of any action on the part of Administrative Lender. (d) The Administrative Lender, and the Lenders may exercise all of the post-default rights granted to them under the Loan Documents or under Applicable Law. (e) The rights and remedies of the Administrative Lender and the Lenders hereunder shall be cumulative, and not exclusive. ARTICLE 9 Changes in Circumstances Section 9.1 LIBOR Basis Determination Inadequate. If with respect to any proposed LIBOR Advance for any Interest Period, any Lender determines that (i) deposits in dollars (in the applicable amount) are not being offered to that Lender in the relevant market for such Interest Period or (ii) the LIBOR Basis for such proposed LIBOR Advance does not adequately cover the cost to such Lender of making and maintaining such proposed LIBOR Advance for such Interest Period, such Lender shall forthwith give notice thereof to the Borrower, whereupon until such Lender notifies the Borrower that the circumstances giving rise to such situation no longer exist, the obligation of such Lender to make LIBOR Advances shall be suspended. Section 9.2 Illegality. If any applicable law, rule or regulation, or any change therein or adoption thereof, or interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, shall make it unlawful or impossible for such Lender (or its LIBOR Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall so notify the Borrower and the Administrative Lender. Before giving any notice to the Borrower pursuant to this Section, the notifying Lender shall designate a different LIBOR Lending Office or other lending office if such designation will avoid the need for giving such notice and will not, in the sole judgment of the Lender, be materially disadvantageous to the Lender. Upon receipt of such notice, notwithstanding anything contained in Article 2 hereof, the Borrower shall repay in full the then outstanding principal amount of each LIBOR Advance owing to the notifying Lender, together with accrued interest thereon, on either (a) the last day of the Interest Period applicable to such Advance, if the Lender may lawfully continue to maintain and fund such Advance to such day, or (b) immediately, if the Lender may not lawfully continue to fund and maintain such Advance to such day. Concurrently with repaying each affected LIBOR Advance owing to such Lender, notwithstanding anything contained in Article 2 hereof, the Borrower shall borrow a Base Rate Advance from such Lender, and such Lender shall make such Base Rate Advance, in an amount 70 76 such that the outstanding principal amount of the Advances owing to such Lender shall equal the outstanding principal amount of the Advances owing immediately prior to such repayment. Section 9.3 Increased Costs. (a) If any applicable law, rule or regulation, or any change in or adoption of any law, rule or regulation, or any interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or compliance by any Lender (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or compatible agency: (i) shall subject a Lender (or its LIBOR Lending Office) to any tax, duty or other charge (net of any tax benefit engendered thereby) with respect to its LIBOR Advances or its obligation to make such Advances, or shall change the basis of taxation of payments to a Lender (or to its LIBOR Lending Office) of the principal of or interest on its LIBOR Advances or in respect of any other amounts due under this Agreement, as the case may be, or its obligation to make such Advances (except for changes in the rate of tax on the overall net income of the Lender or its LIBOR Lending Office and franchise taxes imposed upon such Lender); or (ii) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, a Lender's LIBOR Lending Office or shall impose on the Lender (or its LIBOR Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its LIBOR Advances or its obligation to make such Advances; and the result of any of the foregoing is to increase the cost to a Lender (or its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to reduce the amount of any sum received or receivable by a Lender (or its LIBOR Lending Office) with respect thereto, by an amount deemed by a Lender to be material, then, within 15 days after demand by a Lender, the Borrower agrees to pay to such Lender such additional amount as will compensate such Lender for such increased costs or reduced amounts. The affected Lender will as soon as practicable notify the Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different LIBOR Lending Office or other lending office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of the affected Lender made in good faith, be disadvantageous to such Lender. (b) A certificate of any Lender claiming compensation under this Section and setting forth the additional amounts to be paid to it hereunder and calculations therefor shall be conclusive in the absence of manifest error. In determining such amount, a Lender may use any reasonable averaging and attribution methods. If a Lender demands compensation under this 71 77 Section, the Borrower may at any time, upon at least five Business Days' prior notice to the Lender, after reimbursement to the Lender by the Borrower in accordance with this Section of all costs incurred, prepay in full the then outstanding LIBOR Advances of the Lender, together with accrued interest thereon to the date of prepayment, along with any reimbursement required under Section 2.9 hereof. Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a Base Rate Advance from the Lender, and the Lender shall make such Base Rate Advance, in an amount such that the outstanding principal amount of the Advances owing to such Lender shall equal the outstanding principal amount of the Advances owing immediately prior to such prepayment. Section 9.4 Effect On Base Rate Advances. If notice has been given pursuant to Section 9.1, 9.2 or9.3 hereof suspending the obligation of a Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or prepaid, then, unless and until the Lender notifies the Borrower that the circumstances giving rise to such repayment no longer apply, all Advances which would otherwise be made by such Lender as LIBOR Advances shall be made instead as Base Rate Advances. Section 9.5 Capital Adequacy. If either (a) the introduction of or any change in or in the interpretation of any law, rule or regulation or (b) compliance by a Lender with any law, rule or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by a Lender or any corporation controlling such Lender (any event or occurrence in clauses (a) or (b) above being a "Regulatory Modification"), and such Lender reasonably determines that the amount of such capital is increased by or based upon the existence of such Lender's commitment or Advances hereunder and other commitments or advances of such Lender of this type, then, upon demand by such Lender, subject to Section 11.10, the Borrower shall immediately pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender with respect to such circumstances (collectively, "Additional Costs"), to the extent that such Lender reasonably determines in good faith such increase in capital to be allocable to the existence of such Lender's Commitment hereunder. Notwithstanding the foregoing, any Lender's demand for Additional Costs shall not include any Additional Costs with respect to any period more than 180 days prior to the date that such Lender gives notice to the Borrower of such Additional Costs unless the effective date of the Regulatory Modification which results in the right to receive Additional Costs is retroactive (the "Regulatory Modification Retroactive Effective Date"). If any Regulatory Modification has a Regulatory Modification Retroactive Effective Date and any Lender demands compensation within 180 days after the date setting the Regulatory Modification Retroactive Effective Date (the "Regulatory Modification Set Date"), such Lender shall have the right to receive such Additional Costs from the Regulatory Modification Retroactive Effective Date. If a Lender does not demand such Additional Costs within 180 days after the Regulatory Modification Set Date, such lender may not receive payment of Additional Costs with respect to any period more than 180 days prior to such demand. A certificate as to such amounts submitted to the Borrower by a Lender hereunder, shall, in the absence of demonstrable error, be conclusive and binding for all purposes. 72 78 ARTICLE 10 AGREEMENT AMONG LENDERS Section 10.1 Agreement Among Lenders. The Lenders agree among themselves that: (a) Administrative Lender. Each Lender hereby appoints the Administrative Lender as its nominee in its name and on its behalf, to receive all documents and items to be furnished hereunder; to act as nominee for and on behalf of all Lenders under the Loan Documents; to take such action as may be requested by Determining Lenders, provided that, unless and until the Administrative Lender shall have received such requests, the Administrative Lender may take such administrative action, or refrain from taking such administrative action, as it may deem advisable and in the best interests of the Lenders; to arrange the means whereby the proceeds of the Advances of the Lenders are to be made available to the Borrower; to distribute promptly to each Lender information, requests and documents received from the Borrower, and each payment (in like funds received) with respect to any of such Lender's Advances, fee or other amount; and to deliver to the Borrower requests, demands, approvals and consents received from the Lenders. Administrative Lender agrees to promptly distribute to each Lender, at such Lender's address set forth below information, requests, documents and payments received from the Borrower. (b) Replacement of Administrative Lender. Should the Administrative Lender or any successor Administrative Lender ever cease to be a Lender hereunder, or should the Administrative Lender or any successor Administrative Lender ever resign as Administrative Lender, or should the Administrative Lender or any successor Administrative Lender ever be removed with or without cause by the Determining Lenders, then the Lender appointed by the other Lenders shall forthwith become the Administrative Lender, and the Borrower and the Lenders shall execute such documents as any Lender may reasonably request to reflect such change. Any resignation or removal of the Administrative Lender or any successor Administrative Lender shall become effective upon the appointment by the Lenders of a successor Administrative Lender; provided, however, that if the Lenders fail for any reason to appoint a successor within 60 days after such removal or resignation, the Administrative Lender or any successor Administrative Lender (as the case may be) shall thereafter have no obligation to act as Administrative Lender hereunder. (c) Expenses. Each Lender shall pay its pro rata share, based on its Specified Percentage, of any reasonable expenses paid by the Administrative Lender directly and solely in connection with any of the Loan Documents if Administrative Lender does not receive reimbursement therefor from other sources within 60 days after the date incurred, unless payment of such fees is being diligently disputed by such Lender or the Borrower in good faith. Any amount so paid by the Lenders to the Administrative Lender shall be returned by the Administrative Lender pro rata to each paying Lender to the extent later paid by the Borrower or any other Person on the Borrower's behalf to the Administrative Lender. 73 79 (d) Delegation of Duties. The Administrative Lender may execute any of its duties hereunder by or through officers, directors, employees, attorneys or agents, and shall be entitled to (and shall be protected in relying upon) advice of counsel concerning all matters pertaining to its duties hereunder. (e) Reliance by Administrative Lender. The Administrative Lender and its officers, directors, employees, attorneys and agents shall be entitled to rely and shall be fully protected in relying on any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype message, statement, order, or other document or conversation reasonably believed by it or them in good faith to be genuine and correct and to have been signed or made by the proper Person and, with respect to legal matters, upon opinions of counsel selected by the Administrative Lender. The Administrative Lender may, in its reasonable judgment, deem and treat the payee of any Note as the owner thereof for all purposes hereof. (f) Limitation of Administrative Lender's Liability. Neither the Administrative Lender nor any of its officers, directors, employees, attorneys or agents shall be liable for any action taken or omitted to be taken by it or them hereunder in good faith and believed by it or them to be within the discretion or power conferred to it or them by the Loan Documents or be responsible for the consequences of any error of judgment, except for its or their own gross negligence or wilful misconduct. Except as aforesaid, the Administrative Lender shall be under no duty to enforce any rights with respect to any of the Advances, or any security therefor. The Administrative Lender shall not be compelled to do any act hereunder or to take any action towards the execution or enforcement of the powers hereby created or to prosecute or defend any suit in respect hereof, unless indemnified to its satisfaction against loss, cost, liability and expense. The Administrative Lender shall not be responsible in any manner to any Lender for the effectiveness, enforceability, genuineness, validity or due execution of any of the Loan Documents, or for any representation, warranty, document, certificate, report or statement made herein or furnished in connection with any Loan Documents, or be under any obligation to any Lender to ascertain or to inquire as to the performance or observation of any of the terms, covenants or conditions of any Loan Documents on the part of the Borrower. To the extent not reimbursed by the Borrower, each Lender hereby severally, but not jointly, indemnifies and holds harmless the Administrative Lender, pro rata according to its Specified Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and/or disbursements of any kind or nature whatsoever which may be imposed on, asserted against, or incurred by the Administrative Lender in any way with respect to any Loan Documents or any action taken or omitted by the Administrative Lender under the Loan Documents (including any negligent action of the Administrative Lender), except to the extent the same result from gross negligence or wilful misconduct by the Administrative Lender. (g) Liability Among Lenders. No Lender shall incur any liability (other than the sharing of expenses and other matters specifically set forth herein and in the other Loan Documents) to any other Lender, except for acts or omissions in bad faith. 74 80 (h) Rights as Lender. With respect to its commitment hereunder, the Advances made by it and Note issued to it, the Administrative Lender shall have the same rights as a Lender and may exercise the same as though it were not the Administrative Lender, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include the Administrative Lender in its individual capacity. The Administrative Lender or any Lender may accept deposits from, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower and any of its Affiliates, and any Person who may do business with or own securities of the Borrower or any of its Affiliates, all as if the AdministrativeLender were not the Administrative Lender hereunder and without any duty to account therefor to the Lenders. Section 10.2 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Lender or any other Lender and based upon the financial statements referred to in Sections 4.1(j), 6.1 and 6.2 hereof, and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Lender or any other Lender and based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. Section 10.3 Benefits of Article. None of the provisions of this Article shall inure to the benefit of any Person other than Lenders or the Borrower, as applicable; consequently, no Person other than Lenders or the Borrower shall be entitled to rely upon, or to raise as a defense, in any manner whatsoever, the failure of the Administrative Lender or any Lender to comply with such provisions. ARTICLE 11 Miscellaneous Section 11.1 Notices. (a) All notices and other communications under this Agreement shall be in writing and shall be deemed to have been given on the date personally delivered or sent by telecopy (answerback received), or three days after deposit in the mail, designated as registered mail, return receipt requested, postage-prepaid, or one day after being entrusted to a reputable commercial overnight delivery service, or one day after being delivered to the telegraph office or sent out by telex addressed to the party to which such notice is directed at its address determined as provided in this Section. All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses: 75 81 (i) If to the Borrower, at: Clear Channel Communications, Inc. 7710 Jones-Maltsberger, Suite 600 San Antonio, Texas 78216 Attn: Randall T. Mays, Vice President-Treasurer (ii) If to the Administrative Lender, at: NationsBank of Texas, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Thomas E. Carter, Senior Vice President (iii) If to a Lender, at its address shown below its name on the signature pages hereof, or if applicable, set forth in its Assignment Agreement. (b) Any party hereto may change the address to which notices shall be directed by giving 10 days' written notice of such change to the other parties. Section 11.2 Expenses. The Borrower shall promptly pay: (a) all reasonable out-of-pocket expenses of the Administrative Lender in connection with the preparation, negotiation, execution and delivery of thisAgreement and the other Loan Documents, the transactions contemplated hereunder and thereunder, and the making of Advances and the issuance of Letters of Credit hereunder, including without limitation the reasonable fees and disbursements of Special Counsel; (b) all reasonable out-of-pocket expenses of the Administrative Lender in connection with the administration of the transactions contemplated in this Agreement and the other Loan Documents, the preparation, negotiation, execution and delivery of any waiver, amendment or consent by the Lenders relating to this Agreement or the other Loan Documents; and (c) all reasonable costs, out-of-pocket expenses and attorneys' fees of the Administrative Lender and each Lender incurred for enforcement, collection, restructuring, refinancing and "work-out", or otherwise incurred in obtaining performance under the Loan Documents, and all reasonable costs and out-ofpocket expenses of collection if default is made in the payment of the Notes, which in each case shall include without limitation reasonable fees and expenses of consultants,counsel for the Administrative Lender and any Lender, and administrative fees for the Administrative Lender. Section 11.3 Waivers. The rights and remedies ofthe Lenders under this Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies which they would otherwise have. No failure or delay by the Administrative Lender or any Lender 76 82 in exercising any right shall operate as a waiver of such right. The Lenders expressly reserve the right to require strict compliance with the terms of this Agreement in connection with any funding of a request for an Advance and the Issuing Bank expressly reserves the right to require strict compliance with the terms of this Agreement in connection with any issuance of aLetter of Credit. In the event that any Lender decides to fund an Advance or the Issuing Bank decides to issue a Letter of Credit at a time when the Borrower is not in strict compliance with the terms of this Agreement, such decision by such Lender shall not be deemed to constitute an undertaking by the Lender to fund any further requests for Advances or by the Issuing Bank to issue any additional Letter of Credit or preclude the Lenders from exercising any rights available under the Loan Documents or at law or equity. Any waiver or indulgence granted by the Lenders shall not constitute a modification of this Agreement, except to the extent expressly provided in such waiver or indulgence, or constitute a course of dealing by the Lenders at variance with the terms of the Agreement such as to require further notice by the Lenders of the Lenders' intent to require strict adherence to the terms of this Agreement in the future. Any such actions shall not in any way affect the ability of the Administrative Lender or the Lenders, in their discretion, to exercise any rights available to them under this Agreement or under any other agreement, whether or not the Administrative Lender or any of the Lenders are a party thereto, relating to the Borrower. Section 11.4 Determination by the Lenders Conclusive and Binding. Any material determination required or expressly permitted to be made by the Administrative Lender or any Lender under this Agreement shall be made in its reasonable judgment and in good faith, and shall when made, absent manifest error, be conclusive and binding on all parties. Section 11.5 Set-Off. In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender and any subsequent holder of any Note, and any assignee or participant in any Note is hereby authorized by the Borrower at any time or from time to time, without notice to the Borrower or any other Person, any such notice being hereby expressly waived, to set-off, appropriate and apply any deposits (general or special (except trust and escrow accounts), time or demand, including without limitation Indebtedness evidenced by certificates of deposit, in each case whether matured or unmatured) and any other Indebtedness at any time held or owing by such Lender or holder to or for the credit or the account of the Borrower, against and on account of the Obligations and other liabilities of the Borrower to such Lender or holder, irrespective of whether or not (a) the Lender or holder shall have made any demand hereunder, or (b) the Lender or holder shall have declared the principal of and interest on the Advances and other amounts due hereunder to be due and payable as permitted by Section 8.2 and although such obligations and liabilities, or any of them, shall be contingent or unmatured. Any sums obtained by any Lender or by any assignee, participant or subsequent holder of any Note shall be subject to pro rata treatment of all Obligations and other liabilities hereunder. 77 83 Section 11.6 Assignment. (a) The Borrower may not assign or transfer any of its rights or obligations hereunder or under the other Loan Documents without the prior written consent of the Lenders. (b) No Lender shall be entitled to assign its interest in this Agreement, its Notes or its Advances, except as hereinafter set forth. (c) A Lender may at any time sell participations in all or any part of its Advances (collectively, "Participations") to any banks or other financial institutions ("Participants") provided that such Participation shall not confer on any Person (other than the parties hereto) any right to vote on, approve or sign amendments or waivers, or any other independent benefit or any legal or equitable right, remedy or other claim under this Agreement or any other Loan Documents, other than the right to vote on, approve, or sign amendments or waivers or consents with respect to items that would result in (i) any increase in the commitment of any Participant; or (ii)(A) the extension of the date of maturity of, or (B) the extension of the due date for any payment of principal, interest or fees respecting, or (C) the reduction of the amount of any installment of principal or interest on or the change or reduction of any mandatory reduction required hereunder, or (D) a reduction of the rate of interest on, the Advances, the Letters of Credit, or the Reimbursement Obligations, or change in Applicable Margin; or (iii) the release of security for the Obligations, including without limitation any guarantee or Pledged Stock; or (iv) the reduction of any fees payable hereunder. Notwithstanding the foregoing, the Borrower agrees that the Participants shall be entitled to the benefits of Article 9 and Section 11.5 hereof as though they were Lenders and the Lenders may provide copies of all financial information received from the Borrower to such Participants. To the fullest extent it may effectively do so under Applicable Law, the Borrower agrees that any Participant may exercise any and all rights of banker's lien, set-off and counterclaim with respect to this Participation as fully as if such Participant were the holder of the Advances in the amount of its Participation. (d) Each Lender may assign to one or more financial institutions or funds organized under the laws of the United States, or any state thereof, or under the laws of any other country that is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, which is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business (each, an "Assignee") its rights and obligations under this Agreement and the other Loan Documents up to a total of 49% of its Specified Percentage of the Commitment; provided, however, that (i) each such assignment shall be subject to the prior written consent of the Administrative Lender and Borrower, which approval shall not be unreasonably withheld (provided that without the consent of the Borrower or the Administrative Lender, any Lender may make assignments to its Affiliates or another Lender), (ii) each such assignment shall be of a constant, and not a varying, percentage of the Lender's rights and obligations under this Agreement, (iii) the amount of the Commitment, Advances and Reimbursement Obligations being assigned pursuant to each such assignment (determined as of the date of the assignment with respect to such assignment) shall in no event be less than $5,000,000 and which is an integral multiple of $1,000,000, (iv) the applicable 78 84 Lender, Administrative Lender and applicable Assignee shall execute and deliver to the Administrative Lender an Assignment and Acceptance Agreement (an "Assignment Agreement") in substantially the form of Exhibit I hereto, together with the Notes subject to such assignment, (v) the Assignee or the Lender executing the Assignment as the case may be, shall deliver to the Administrative Lender a processing fee of $2,500 and (vi) notwithstanding anything herein to the contrary, any Lender may assign up to a total of 100% of its Specified Percentage of the Commitment with the prior written consent of the Borrower and the Administrative Lender, which consent may be withheld for any reason or for no reason. Upon such execution, delivery and acceptance from and after the effective date specified in each Assignment, which effective date shall be at least three Business Days after the execution thereof, (A) the Assignee thereunder shall be party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment, have the rights and obligations of a Lender hereunder and (B) the assigning Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment, relinquish such rights and be released from such obligations under this Agreement. The Borrower shall not be liable for any fees or expenses of the Administrative Lender, any Lender, or any Assignee, incurred in connection with such an Assignment. (e) Notwithstanding anything in clause (d) above to the contrary, any Lender may assign and pledge all or any portion of its Advances and Note to any Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank; provided, however, that no such assignment under this clause (e) shall release the assignor Lender from its obligations hereunder. (f) Upon its receipt of an Assignment Agreement executed by a Lender and an Assignee, and any note or notes subject to such assignment, the Borrower shall, within three Business Days after its receipt of such Assignment Agreement, at its own expense, execute and deliver to the Administrative Lender in exchange for the surrendered Notes new Notes to the order of such Assignee in an amount equal to the portion of the Advances, Reimbursement Obligations and Commitment assigned to it pursuant to such Assignment Agreement and new Notes to the order of the Administrative Lender in an amount equal to the portion of the Advances and Commitment retained by it hereunder. Such new notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Notes, shall be dated the effective date of such Assignment Agreement and shall otherwise be in substantially the form of Exhibit A hereto. (g) No Lender may, without the prior consent of the Borrower, which shall not be unreasonably withheld, in connection with any assignment or Participation or proposed assignment or Participation pursuant to this Section 11.6, disclose to the Assignee or Participant or proposed Assignee or Participant, any information (which is not otherwise publicly available) relating to the Borrower furnished to such Lender by or on behalf of the Borrower, unless such proposed assignee or participant agrees to keep such information confidential and signs a confidentiality agreement in a form substantially similar to the confidentiality agreement signed 79 85 by the Persons who were Lenders on the Agreement Date. The Borrower may not prohibit any Participation by withholding its consent pursuant to this Section 11.6(g). (h) Except as specifically set forth in this Section 11.6, nothing in this Agreement or any other Loan Documents, expressed or implied, is intended to or shall confer on any Person other than the respective parties hereto and thereto and their successors and assignees permitted hereunder and thereunder any benefit or any legal or equitable right, remedy or other claim under this Agreement or any other Loan Documents. Section 11.7 Release of Collateral. At the Borrower's option, Borrower may request that the lien on the Capital Stock of Borrower's Subsidiaries be released in the event that (i) Borrower obtains a senior unsecured debt rating of at least BBB- from S&P or Baa3 from Moody's and (ii) no Default or Event of Default has occurred and is continuing. Upon receipt of such request, the Administrative Lender shall release such Collateral. Section 11.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Section 11.9 Severability. Any provision of this Agreement which is for any reason prohibited or found or held invalid or unenforceable by any court or governmental agency shall be ineffective to the extent of such prohibition or invalidity or unenforceability without invalidating the remaining provisions hereof in such jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Section 11.10 Interest and Charges. It is not the intention of any parties to this Agreement to make an agreement in violation of the laws of any applicable jurisdiction relating to usury. Regardless of any provision in any Loan Documents, no Lender shall ever be entitled to receive, collect or apply, as interest on the Obligations, any amount in excess of the Maximum Amount. If any Lender or participant ever receives, collects or applies, as interest, any such excess, such amount which would be excessive interest shall be deemed a partial repayment of principal and treated hereunder as such; and if principal is paid in full, any remaining excess shall be paid to the Borrower. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the Maximum Amount, the Borrower and the Lenders shall, to the maximum extent permitted under Applicable Law, (a) characterize any nonprincipal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) amortize, prorate, allocate and spread in equal parts, the total amount of interest throughout the entire contemplated term of the Obligations so that the interest rate is uniform throughout the entire term of the Obligations; provided, however, that if the Obligations are paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, the Lenders shall refund to the Borrower the amount of such excess or credit the amount of such excess against the total principal amount of the Obligations owing, and, in such event, the Lenders shall not be subject to any penalties provided by any laws for contracting for, charging 80 86 or receiving interest in excess of the Maximum Amount. This Section shall control every other provision of all agreements pertaining to the transactions contemplated by or contained in the Loan Documents. Section 11.11 Headings. Headings used in this Agreement are for convenience only and shall not be used in connection with the interpretation of any provision hereof. Section 11.12 Amendment and Waiver. The provisions of this Agreement may not be amended, modified or waived except by the written agreement of the Borrower and the Determining Lenders; provided, however, that no such amendment, modification or waiver shall be made (a) without the consent of all Lenders, if it would (i) increase the Specified Percentage or commitment of any Lender, or (ii) extend or postpone any Commitment Reduction, extend or postpone the date of payment or maturity of, extend the due date for any payment of principal or interest on, reduce the amount of any installment of principal or interest on, or reduce the rate of interest on, any Advance, the Reimbursement Obligations, fees or other amounts owing under any Loan Documents, or (iii) release any security for or guaranty of the Obligations (except pursuant to this Agreement), or (iv) reduce the fees payable hereunder, or (v) revise this Section 11.12, or (v) waive the date for payment of any of the Obligations, or (vi) amend the definition of Determining Lenders, (vii) revise Sections 2.5(b), (c) or (d) hereof or (vii) revise Sections 2.6(b) or (c) hereof; or (b) without the consent of the Administrative Lender, if it would alter the rights, duties or obligations of the Administrative Lender. Neither this Agreement nor any term hereof may be amended orally, nor may any provision hereof be waived orally but only by an instrument in writing signed by the Administrative Lender and, in the case of an amendment, by the Borrower. Section 11.13 Exception to Covenants. Neither the Borrower nor any Restricted Subsidiary shall be deemed to be permitted to take any action or fail to take any action which is permitted as an exception to any of the covenants contained herein or which is within the permissible limits of any of the covenants contained herein if such action or omission would result in the breach of any other covenant contained herein. Section 11.14 No Liability of Issuing Bank. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither the Issuing Bank nor any Lender nor any of their respective officers or directors shall be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit, except for any payment made upon the Issuing Bank's gross negligence or willful misconduct; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to the 81 87 Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit other than pursuant to the Uniform Commercial Code Section 5-114. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. Section 11.15 Credit Agreement Governs. In the event of any conflict between the terms of this Agreement and any terms of any other Loan Document, the terms of this Agreement shall control. SECTION 11.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(b), TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVELENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER. SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL 82 88 AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 83 89 IN WITNESS WHEREOF, this Amended and Restated Credit Agreement is executed as of the date first set forth above. BORROWER: CLEAR CHANNEL COMMUNICATIONS, INC. By /s/ RANDY MAYS ------------------------------ Title: Vice President ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as Administrative Lender By /s/ THOMAS E. CARTER ------------------------------ Thomas E. Carter, Senior Vice President LENDERS: NATIONSBANK OF TEXAS, N.A. as a Lender Specified Percentage: 0.09167 By /s/ THOMAS E. CARTER ------------------------------ Thomas E. Carter, Senior Vice President 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Thomas E. Carter, Senior Vice President 90 BANK OF BOSTON Specified Percentage: 0.05833 By ILLEGIBLE ------------------------------ Title Assistant Vice President --------------------------- 100 Federal Street Boston, Massachusetts 02110 Attn: Mark S. Denomme, Vice President 91 BANK OF MONTREAL, CHICAGO BRANCH Specified Percentage: 0.05833 By /s/ RENE ENCARNACION ---------------------------- Title Director ------------------------ 430 Park Avenue 16th Floor New York, New York 10022 Attn: Ola Anderssen 92 THE BANK OF NEW YORK Specified Percentage 0.06833 By /s/ JOHN MATTIO ------------------------------ Title Vice President --------------------------- One Wall Street, 16th Floor South New York, New York 10286 Attn: Edward F. Ryan, Jr., Vice President 93 ABN AMRO BANK N.V., HOUSTON AGENCY Specified Percentage: 0.05833 By /s/ MICHAEL N. OAKES ------------------------------- Title Vice President ---------------------------- By /s/ ILLEGIBLE ------------------------------- Title Assistant Vice President ---------------------------- 3 Riverway, Suite 1700 Houston, Texas 77056 Attn: Michael N. Oakes, Vice President 94 THE BANK OF CALIFORNIA, N.A. Specified Percentage: 0.05 By /s/ GAIL L. FLETCHER ------------------------------ Title Vice President --------------------------- 400 California Street San Francisco, California 94104 Attn: Gail Fletcher Vice President 95 CITIBANK, N.A. Specified Percentage: 0.04167 By /s/ ROBERT A. KELLER ------------------------------ Title Vice President --------------------------- 399 Park Avenue, 4th Floor New York, New York 10043 Attn: Robert Keller 96 NATWEST BANK N.A. Specified Percentage: 5.83333% By /s/ JEFFREY H. HOFF ------------------------------ Title Jeffrey H. Hoff, Vice President --------------------------- 175 Water Street New York, New York 10038 Attn: Jeffrey H. Hoff, Vice President 97 CORESTATES BANK, N.A. Specified Percentage: 0.03333 By /s/ ILLEGIBLE ----------------------------- Title Vice President -------------------------- 1339 Chestnut Street, 10th Floor Philadelphia, Pennsylvania 19101 Attn: Douglas E. Blackman, Vice President 98 SOCIETY NATIONAL BANK Specified Percentage: 0.04167 By /s/ JASON R. WEAVER ------------------------------ Title Assistant Vice President --------------------------- Media Finance Division 127 Public Square Cleveland, Ohio 44114-1306 Attn: Jason R. Weaver Assistant Vice President 99 CIBC INC. Specified Percentage: 0.05833 By /s/ PAMELA H. FRIEDMAN -------------------------------- Title Vice President ---------------------------- 425 Lexington Avenue New York, New York 10017 Attn: Pamela H. Friedman Vice President 100 TORONTO DOMINION (TEXAS), INC. Specified Percentage: .05 By /s/ DIANE BAILEY ------------------------------- Title Vice President ---------------------------- Houston Agency 909 Fannin Street, 17th Floor Houston, Texas 77010 Attn: Diane Bailey 101 FIRST UNION NATIONAL BANK OF NORTH CAROLINA Specified Percentage 0.04167 By /s/ ILLEGIBLE ------------------------------- Title Vice President ---------------------------- Specialized Industries/Communications One First Union Center TW-19 301 South College Street Charlotte, North Carolina 28288-0735 Attn: Lloyd R. Sams, Vice President 102 BANQUE PARIBAS Specified Percentage: 0.03333 By /s/ THOMAS G. BRANDT ----------------------------------- Title Group Vice President/Vice President ----------------------------------- 2029 Century Park East, Suite 3900 Los Angeles, California 90067 Attn: Thomas G. Brandt 103 FIRST INTERSTATE BANK OF TEXAS, N.A. Specified Percentage: 0.04167 By /s/ Chuck Bridgeman -------------------------------- Title Vice President ----------------------------- 700 North St. Mary's #300 San Antonio, Texas 78205 Attn: Charles Bridgeman 104 SOCIETE GENERALE Specified Percentage: 0.04167 By /s/ Bryan G. Petermann --------------------------- Title Bryan G. Peterman ----------------------- Vice President 1221 Avenue of the Americas New York, New York 10020 Attn: Bryan Petermann 105 THE SUMITOMO BANK, LIMITED Specified Percentage: 0.03333 /s/ Harumitsu Seki By Harumitsu Seki ----------------------------------- Title General Manager -------------------------------- 700 Louisiana, Suite 1750 Houston, Texas 77002 Attn: Michael Shyrock 106 THE LONG-TERM CREDIT BANK OF JAPAN LIMITED, NEW YORK BRANCH Specified Percentage: 0.03333 /s/ Satoru Otsubo By Satoru Otsubo ---------------------------------- Title Joint General Manager ------------------------------ 165 Broadway New York, New York 10006 Attn: Mr. T.J. Fukunaga 107 MELLON BANK, N.A. Specified Percentage: 0.04167 By /s/ LISA M. PELLOW ----------------------------- Title Vice President -------------------------- One Mellon Bank Center, Room 4440 Pittsburgh, PA 15258-0001 Attn: Lisa M. Pellow with a copy to: Three Mellon Bank Center, 23rd Floor Pittsburgh, PA 15259 Attn: Loan Administration 108 PNC BANK, NATIONAL ASSOCIATION Specified percentage 0.03333 By /s/ Marlene S. Dooner ---------------------------------- Title Marlene S. Dooner ------------------------------- Vice President Broad & Chestnut Streets Philadelphia, PA 19101 Attn: Marlene S. Dooner 109 SHAWMUT BANK CONNECTICUT, N.A. Specified Percentage: 0.03333 By /s/ Robert F. West ------------------------------- Title Director ---------------------------- 777 Main Street, MSN 397 Hartford, Connecticut 06115 Attn: Wendy E. Klepper EX-99.(C)(1) 11 TENDER OFFER AGREEMENT 1 EXHIBIT 99(c)(1) TENDER OFFER AGREEMENT BETWEEN CLEAR CHANNEL RADIO, INC. AND HEFTEL BROADCASTING CORPORATION 2 TABLE OF CONTENTS
Page ---- ARTICLE 1 THE OFFER.................................................... 1 1.1 The Offer.................................................... 1 1.2 Schedule 14D-1............................................... 2 1.3 Shareholder Lists............................................ 2 1.4 Company Action............................................... 3 1.5 Stock Options and Warrants................................... 3 1.6 Closing...................................................... 4 ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PARENT..................... 4 2.1 Organization, Standing and Power............................. 4 2.2 Authority.................................................... 4 2.3 Brokers...................................................... 5 2.4 Financing.................................................... 5 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 5 3.1 Organization................................................. 5 3.2 Capitalization............................................... 5 3.3 Authority.................................................... 6 3.4 Brokers...................................................... 6 3.5 Board Actions................................................ 6 3.6 Financial Statements......................................... 6 ARTICLE 4 PRE-CLOSING COVENANTS........................................ 7 4.1 Conduct of Business by the Company Pending the Closing...................................................... 7 4.2 No Other Bids................................................ 9 4.3 Control of Stations.......................................... 10 4.4 Renewal Application.......................................... 11 ARTICLE 5 ADDITIONAL AGREEMENTS........................................ 11 5.1 Access to Information of the Company; Confidentiality.............................................. 11 5.2 Fees and Expenses............................................ 11 5.3 Additional Agreements........................................ 11 5.4 Consents and Filings......................................... 12 5.5 Indemnification.............................................. 12 5.6 Company Indebtedness......................................... 14 5.7 Convertible Securities....................................... 14 5.8 Parent Commission Filings.................................... 14 5.9 Maintain Listing............................................. 14 5.10 Independent Directors........................................ 15 ARTICLE 6 FCC APPROVAL................................................. 15 ARTICLE 7 CONDITIONS................................................... 15
3
Page ---- ARTICLE 8 TERMINATION.................................................. 16 8.1 Termination.................................................. 16 8.2 Effect of Termination........................................ 17 ARTICLE 9 DEFINITIONS.................................................. 19 ARTICLE 10 GENERAL PROVISIONS........................................... 19 10.1 Amendment.................................................... 19 10.2 Waiver....................................................... 20 10.3 Public Statements............................................ 20 10.4 Assignment and Binding Effect................................ 20 10.5 Governing Law................................................ 20 10.6 Entire Agreement............................................. 20 10.7 Severability................................................. 20 10.8 Titles....................................................... 21 10.9 Attorneys' Fees.............................................. 21 10.10 Multiple Counterparts........................................ 21 10.11 Notices...................................................... 21 10.12 Incorporation by Reference................................... 22 10.13 Representations and Warranties............................... 22
-ii- 4 TENDER OFFER AGREEMENT THIS TENDER OFFER AGREEMENT (this "Agreement") is made and entered into on June 1, 1996, by and between CLEAR CHANNEL RADIO, INC., a Nevada corporation ("Parent") and HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the "Company"), with reference to the following facts: RECITALS: A. Parent desires to make a tender offer (the "Offer") to purchase all of the outstanding shares of the Class A Common Stock, par value $.001 per share, of the Company (the "Class A Common Stock") and Class B Common Stock, par value $.001 per share, of the Company (the "Class B Common Stock" and together with the Class A Common Stock, the "Company Common") for a price of $23 per share (the "Offer Price") on the terms and conditions contained herein. B. The Board of Directors of the Company, deeming the Offer to be desirable and in the best interests of the Company and its stockholders has authorized and approved the Offer, subject to the terms and conditions set forth herein, and the execution and delivery of this Agreement. C. The Board of Directors of Parent, deeming the Offer to be desirable and in the best interests of Parent and its stockholders, has authorized and approved the Offer, subject to the terms and conditions set forth herein, and the execution and delivery of this Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing facts and the mutual covenants, representations, warranties and agreements herein contained, the parties hereto agree as follows: ARTICLE 1 THE OFFER 1.1 The Offer. Subject to the provisions of this Agreement, as promptly as practicable, but in no event later than five business days after the announcement of the Offer by Parent, Parent shall commence the Offer. Subject to Article 8, the Offer shall remain open for 40 days; provided, however, if at any time prior to the end of such 40 day period, shares of Company Common are tendered to Parent which when combined with the shares of Class A Common Stock owned by affiliates of Parent total 80% of the outstanding shares of Company Common, Parent shall publish notice of such fact and shall extend the termination date for the Offer by 10 days. Parent expressly reserves the right to modify the terms of the Offer, except that, without the consent of the 5 Company, Parent shall not (a) reduce the Offer Price, (b) amend or add to the conditions to the obligations of Parent to complete the transactions contemplated hereby set forth in Article 7 (the "Closing Conditions"), (c) change the number of shares of Company Common subject to the Offer, (d) change the form of consideration payable in the Offer, (e) except as set forth in this Section 1.1, extend the termination date for the Offer, or (e) terminate the Offer except in accordance with Section 8.1. Subject to the terms and conditions of this Agreement, on the Closing Date, Parent shall pay for all shares of Company Common validly tendered and not withdrawn prior to the termination of the Offer. 1.2 Schedule 14D-1. As promptly as reasonably practicable following the execution of this Agreement, Parent shall file with the Securities and Exchange Commission (the "Commission") a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule 14D-1 and the documents therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, are referred to herein as the "Offer Documents"). Parent covenants that the Offer Documents (i) shall comply as to form in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder and (ii) on the date filed with the Commission and on the date first published, sent or given to the holders of shares of Company Common, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation is made by Parent with respect to information supplied by the Company specifically for inclusion in the Offer Documents. Each of Parent and the Company agrees promptly to correct any information supplied by it specifically for inclusion in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent further agrees to take all steps necessary to cause the Offer Documents as so corrected to be filed with the Commission and to be disseminated to holders of shares of Company Common, in each case as and to the extent required by applicable Federal securities laws. Parent agrees to provide the Company and its counsel in writing with any comments Parent or its counsel may receive from the Commission or its staff with respect to the Offer Documents promptly after the receipt of such comments. 1.3 Shareholder Lists. In connection with the Offer, the Company shall (a) cause its transfer agent to furnish Parent with mailing labels containing the names and addresses of the record holders of Company Common as of a recent date and of those persons becoming record holders after such date, together with copies of all security position listings and computer files and all other information in the Company's possession or control -2- 6 regarding the beneficial owners of Company Common, and (b) furnish to Parent such information and assistance as Parent may reasonably request in communicating the Offer to the Company's stockholders. Subject to the requirements of law, and except for such steps as are necessary to disseminate the Offer, Parent shall hold in confidence the information contained in any such labels and lists, will use such information only in connection with the Offer and, if this Agreement is terminated, will, upon request, deliver to the Company all copies of, and any extracts or summaries from, such information then in its possession. 1.4 Company Action. The Company hereby consents to the Offer. The Company shall, on the date of commencement of the Offer, file with the Commission a Solicitation/Recommendation Statement on Schedule 14D-9 (as amended from time to time, the "Schedule 14D-9") which shall reflect the recommendation of the Company's Board of Directors to accept the Offer. Parent shall include copies of such Schedule 14D-9 (excluding exhibits) with the Offer Documents to be mailed to stockholders of the Company in connection with the Offer. The Company covenants that the Schedule 14D-9 (i) shall comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder and (ii) on the date filed with the Commission and on the date first published, sent or given to the holders of shares of Company Common, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation is made by the Company with respect to information supplied by Parent specifically for inclusion in the Schedule 14D-9. Each of the Company and Parent agrees promptly to correct any information supplied by it specifically for inclusion in the Schedule 14D-9 which shall have become false or misleading in any material respect and the Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the Commission and disseminated to holders of shares of Company Common, in each case as and to the extent required by applicable Federal securities laws. The Company agrees to provide Parent and its counsel in writing with any comments the Company or its counsel may receive from the Commission or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments. 1.5 Stock Options and Warrants. Whether or not then exercisable or vested, each option to purchase Class A Common Stock of the Company or warrant to purchase Class B Common Stock of the Company listed on Schedule 1.5 attached hereto (collectively, "Convertible Securities" and individually, a "Convertible Security") outstanding immediately prior to the Closing Date shall be cancelled at the Closing Date and in settlement thereof on the Closing Date Parent shall pay each holder of any such Convertible Security, upon receipt by Parent of any consent of the holder thereof necessary to effect -3- 7 cancellation of such Convertible Security and written acknowledgement of such security holder of the cancellation of such Convertible Securities in accordance with this Section (a "Security Holder Consent and Acknowledgement"), an amount equal to (x) the product of (i) the Offer Price minus the exercise price per share of the Convertible Security and (ii) the total number of shares of Company Common for which such Convertible Security is exercisable (without regard as to whether the Convertible Security is then exercisable as to all such shares), less (y) any federal, state, local or foreign taxes required to be withheld from such payment. The Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt such resolutions or take such other actions as are necessary, subject to obtaining the applicable Security Holder Consent and Acknowledgment to reflect the terms set forth in the prior sentence. 1.6 Closing. Unless this Agreement shall have been terminated pursuant to the provisions of Section 8.1, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Jeffer, Mangels, Butler & Marmaro LLP, 2121 Avenue of the Stars, 10th Floor, Los Angeles, California 90067 on the first business day after satisfaction or waiver of the conditions set forth in Article 7 or at such other place, time and date as the parties may mutually agree. The date and time of such Closing are herein referred to as the "Closing Date." ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PARENT Parent represents and warrants to the Company as follows: 2.1 Organization, Standing and Power. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to carry on its business as it is now being conducted. 2.2 Authority. (a) Parent has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent and the consummation by Parent of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly executed and delivered by Parent and constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms. -4- 8 (b) No consent, approval, order or authorization of, notice to, or registration, declaration or filing with, any governmental entity is necessary in connection with the execution and delivery of this Agreement by Parent or the consummation by Parent of the transactions contemplated hereby other than (i) the consent of the Federal Communications Commission (the "FCC") to the transfer of control of the FCC licenses for the stations owned by the Company's subsidiaries ("Company FCC Licenses"); (ii) compliance with the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and (iii) compliance with the applicable requirements of the Exchange Act. 2.3 Brokers. Parent has not entered into any contract, agreement, arrangement or understanding with any person or entity which will result in the obligation to pay any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement. 2.4 Financing. Parent has the funds, or has commitments or agreements with financial institutions to provide the funds, in an aggregate amount not less than the amount necessary to purchase the shares of Company Common in the Offer, plus the amounts payable under Section 1.5 plus the aggregate amount of payments due to the Co-Chief Executive Officers of the Company in exchange for termination of their employment agreements with the Company and delivery of an agreement not to compete at the Closing. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent as follows: 3.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to carry on its business as it is now being conducted. 3.2 Capitalization. The authorized capital stock of the Company and the number, class and/or series of the shares of the capital stock of the Company outstanding or reserved as of the date hereof is as set forth on Schedule 3.2 attached hereto. All of the outstanding shares of the capital stock of the Company are validly issued, fully paid, nonassessable and free of preemptive rights and all outstanding Convertible Securities are duly authorized and validly issued. Except as set forth on Schedules 1.5 and 3.2, there are no shares of capital stock or other securities of the Company outstanding and no outstanding options, warrants, subscription rights (including any preemptive rights), calls or commitments of any character whatsoever to which the Company is a party or is bound, requiring the issuance, -5- 9 sale or transfer by the Company of any shares of capital stock of the Company or any securities convertible into or exchangeable or exercisable for, or rights to purchase or otherwise acquire, any shares of capital stock of the Company. 3.3 Authority. (a) The Company has the requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (b) No consent, approval, order or authorization of, notice to, or registration, declaration of filing with, any governmental entity is necessary in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, other than (i) the consent of the FCC to the transfer of control of the Company FCC Licenses; (ii) compliance with the HSR Act; and (iii) compliance with the applicable requirements of the Exchange Act. 3.4 Brokers. The Company has not entered into any contract, agreement, arrangement or understanding with any person or entity which will result in the obligation to pay any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement, except as set forth on Schedule 3.4 attached hereto. 3.5 Board Actions. The Board of Directors of the Company (at a meeting duly called and held) has resolved to recommend acceptance of the Offer. 3.6 Financial Statements. As of their respective dates, the Company's Annual Reports on Form 10-K for the fiscal years ended September 30, 1994 and 1995, and Quarterly Reports for the quarters ended December 31, 1995 and March 31, 1996, and all other forms, reports, statements and documents filed by the Company with the Commission since July 27, 1994 did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. All of the consolidated financial statements of the Company included or incorporated by reference in the Forms 10-K and 10Q filed with the Commission prior to the date hereof were prepared in accordance with generally accepted accounting principles consistently applied (except, as to the quarterly financials, for normal year-end -6- 10 adjustments), and present fairly the financial position, results of operations and changes in financial position of the Company and its consolidated subsidiaries as of the dates and for the periods indicated. All of the consolidated financial statements of the Company included or incorporated by reference in the Forms 10-K and 10Q filed with the Commission between the date hereof and the Closing Date will be prepared in accordance with generally accepted accounting principles consistently applied (except, as to the quarterly financials, for normal year-end adjustments), and will present fairly the financial position, results of operations and changes in financial position of the Company and its consolidated subsidiaries as of the dates and for the periods indicated. ARTICLE 4 PRE-CLOSING COVENANTS 4.1 Conduct of Business by the Company Pending the Closing. Except as otherwise expressly contemplated hereby, the Company covenants and agrees that prior to the Closing Date, unless Parent shall otherwise consent in writing: (a) The Company and the Company's subsidiaries (individually, a "Company Subsidiary") shall conduct its business and keep its books and accounts, records and files in the usual and ordinary manner in which such business has been conducted in the past; (b) The Company shall not directly or indirectly do, or permit any Company Subsidiary to do, any of the following: (i) issue, sell, pledge, dispose of or encumber any shares of, or any options, warrants or rights of any kind to acquire any shares of or any securities convertible into or exchangeable or exercisable for any shares of, capital stock of the Company or any Company Subsidiary, except for shares of Company Common issuable upon exercise of the issued and outstanding Convertible Securities set forth on Schedule 1.5; (ii) except (A) in the ordinary course of business and consistent with prior practice, (B) for transactions with non-affiliates of the Company which involves payments up to $500,000 in the aggregate, and (C) the sale of KLTY-TV, sell, pledge, dispose of or encumber any assets of the Company or any Company Subsidiary which are material to the Company or any Company Subsidiary; (iii) split, combine, subdivide or reclassify any shares of the Company's capital stock or declare, set aside or pay any dividend or distribution, payable in cash, stock, property or otherwise, with respect to any of the Company's capital stock, other than the payment in cash of any accrued dividends on the Series A Preferred Stock; (iv) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any of the Company's capital stock; (v) adopt a plan of complete or partial liquidation or resolutions providing for the complete or partial liquidation or dissolution of the Company or any Company Subsidiary, except for the transactions set forth in Schedule -7- 11 4.1(b) attached hereto (collectively, the "Subsidiary Reorganizations"); (vi) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division or any material assets thereof or, other than cash management transactions in the ordinary course of business and consistent with prior practice, make any investment either by purchase of stock or securities, contributions to capital, property transfer or purchase of any property or assets of any other individual or entity; (vii) amend or modify the corporate charter, bylaws or other organizational documents of any Company Subsidiary, except in connection with the Subsidiary Reorganizations, (viii) enter into any agreement or transaction with any, or modify the terms of any existing agreement with any, affiliate, (ix) terminate or fail to renew any Company FCC License, (x) fail to operate any radio station owned by the Company or a Company Subsidiary in accordance with the Communications Act, the rules, regulations and policies of the FCC and the terms of the Company FCC Licenses, other than failures which, individually or in the aggregate, are not reasonably anticipated to have a material adverse effect on the business, assets, results of operations, financial condition or prospects of the Company on a consolidated basis, (xi) cancel, discount or otherwise compromise any accounts receivable except in the ordinary course of business consistent with past practice, (xii) fail to file in a timely manner any applications to renew a Company FCC License, (xiii) (other than agreements for the sale of air time) enter into any agreement which involves payments by the Company of $50,000 or more, unless such agreement provides for cancellation thereof by the Company on 60 or fewer days notice and the amount payable by the Company during the period from the date of delivery of notice of cancellation until the date of cancellation plus any penalty for early termination does not exceed $50,000, (xiv) enter into any barter or trade agreement that is prepaid, (xv) apply to the FCC for any construction permit that would restrict the current operations of any of the radio stations owned by the Company's subsidiaries (individually, a "Station") or make any change in any Station's buildings, leasehold improvements or fixtures, except in the ordinary course of business or as necessary to comply with the Company's affirmative covenants in Section 4.4(h) or (xvi) enter into any contract, agreement, commitment or arrangement to do any of the foregoing; (c) Except (i) for salary increases or other employee benefit arrangements in the ordinary course of business and consistent with prior practice, (ii) as may be required pursuant to any agreements in effect on the date hereof, (iii) as may be required by law, neither the Company nor any Company Subsidiary shall (1) grant any severance or termination pay to, or enter into any new employment or severance agreement with, any officer or employee of the Company or any Company Subsidiary, (2) adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employee benefit plan, agreement, trust fund or other arrangement for the -8- 12 benefit or welfare of employees or former employees or (3) increase the compensation or fringe benefits of any employee or former employee or pay any benefit not required by any existing plan, arrangement or agreement; (d) The Company shall not directly or indirectly do, or permit any Company Subsidiary to do, any of the following: make or revoke any material tax election, settle or compromise any material federal, state, local or foreign tax liability (or any other tax liability which may have a material effect on taxable years ending after the Closing Date) or change (or make a request to any taxing authority to change) any aspect of accounting for tax purposes in any material respect; (e) The Company shall deliver to Parent copies of any report, statement or schedule filed with the Commission subsequent to the date hereof; (f) The Company shall provide Parent with copies of the regular monthly internal operating statements relating to the Company for the monthly accounting periods between the date of this Agreement and the Closing Date by the 20th day of each calendar month for the preceding calendar month, which shall present fairly the financial position of the Company and the results of operations for the period indicated in accordance with generally accepted accounting principles consistently applied. Such monthly statements shall: (i) show the actual results and budget for such month by line item, and (ii) account for items of non-recurring income and expense separately and (iii) account for and separately state all intercompany allocations of expenses relating to the Company, all of which shall be presented fairly and in accordance with generally accepted accounting principles consistently applied; (g) The Company shall make all commercially reasonable efforts to preserve the business organization of each Station intact, to retain substantially as at present each Station's employees, consultants and agents, and to preserve the goodwill of each Station's suppliers, advertisers, customers and other having business relations with it; and (h) The Company shall keep all tangible personal property and real property in good operating condition (ordinary wear and tear excepted) and repair and maintain adequate and usual supplies of inventory, office supplies, spare parts and other materials as have been customarily maintained in the past. The Company shall maintain in effect the casualty and liability insurance on its assets heretofore in force. 4.2 No Other Bids. The Company shall not, directly or indirectly, solicit, initiate or encourage (including by way of furnishing information or assistance) any inquiry or the making of any proposal that constitutes, or -9- 13 may reasonably be expected to lead to, any inquiry or proposal that constitutes, or may reasonably be expected to lead to, any Competing Transaction (a "Takeover Proposal") or enter into any discussions, contracts or negotiations with respect to any Competing Transaction and the Company shall not authorize or knowingly permit any of its officers, directors, employees, investment bankers, attorneys, accountants or other advisors or representatives to take any such action and the Company will direct such parties not to take any such action. The Company promptly shall advise Parent in writing of any Takeover Proposal and shall, in such notice, indicate the identity of the offeror and the material terms and conditions of any such Takeover Proposal, including, without limitation, price. Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the Board of Directors of the Company or any committee thereof from (a) (i) furnishing or causing to be furnished information concerning the Company and its businesses, properties or assets to a third party, (ii) engaging in negotiations with a third party, (iii) taking and disclosing to the Company's stockholders a position with respect to any Takeover Proposal (and, in connection therewith, withdrawing or modifying the approval or recommendation by the Board of Directors of the Offer) or (iv) entering into a Competing Transaction, but in each case referred to in the foregoing clauses (i) through (iv) only to the extent that prior to furnishing such information to, or entering into discussions or negotiations with, such person or entity (A) the Board of Directors of the Company shall conclude, after consultation with its outside legal counsel (which may be the Company's regularly engaged legal counsel), in good faith that such action is required under applicable law for the discharge of its fiduciary duties, and (B) the Company provides written notice to Parent to the effect that it is furnishing information, or affording access to properties, books or records to, or entering into discussions or negotiations with, such person or entity or (b) complying with Rule 14e-2 promulgated under the Exchange Act. As used in this Agreement, "Competing Transaction" shall mean any merger, consolidation, reorganization, share exchange or other business combination involving the Company or any Company Subsidiary or any acquisition in any manner of beneficial ownership of 20% or more of the outstanding shares of any class of capital stock of the Company, or any class of the capital stock of any Company Subsidiary, or of all or a significant portion of the assets of the Company and the Company Subsidiaries, taken as a whole. 4.3 Control of Stations. Notwithstanding Section 4.1, until the grant of the FCC Consent Parent shall not directly or indirectly control, manage, supervise or direct the operation of the Company's radio stations or the conduct of the Company's business, including, but not limited to, matters relating to programming, personnel and finances, all of which shall remain and be solely the responsibility of and under the complete discretion and control of each licensee of the Company's radio stations. -10- 14 4.4 Renewal Application. In the event at the Closing the application for renewal of the license for WAMR-FM, Miami, Florida (the "Renewal Application") remains pending or has not become a Final Order, the parties agree the Closing shall occur and each party hereto agrees to abide by the procedures established in Stockholders of CBS, Inc., FCC 95-469 (rel. Nov. 22, 1995) P. P. 34-35, for processing applications for transfer of control of a license during the pendency of an application for renewal of a station license. Without limiting the generality of the foregoing, the Company agrees to use commercially reasonable efforts to cooperate with Parent with the prosecution of the Renewal Application, and Parent agrees that any interest it may acquire in such license at Closing is subject to whatever action the FCC may ultimately take with respect to the Renewal Application. Notwithstanding anything in this Agreement to the contrary, this Section 4.4 shall survive the Closing until any order issued by the FCC with respect to the Renewal Application becomes a Final Order (for purposes hereof, "Final Order" shall have the same meaning as in Article 6 except "grant of the Renewal Application" shall be substituted for "FCC Consent"). ARTICLE 5 ADDITIONAL AGREEMENTS 5.1 Access to Information of the Company; Confidentiality. From the date hereof to the Closing Date, the Company shall afford, and shall cause its officers, directors, employees and agents to afford, to Parent and to the officers, employees and agents of Parent complete access during normal business hours at all reasonable times to the Company's officers, employees, agents, properties, books, records and contracts, and shall furnish, and cause each Company Subsidiary to furnish, to Parent all financial, operating and other data and information as Parent, through its officers or employees, may reasonably request. All information provided to Parent shall be subject to the Confidentiality Letter Agreement, dated May 31, 1996, between Clear Channel Radio, Inc. and the Company (the "Confidentiality Agreement"). 5.2 Fees and Expenses. All costs and expenses incurred in connection with the Offer and this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses; provided, however, if the Closing occurs, Parent shall be responsible for paying all of fees and costs payable to the investment bankers set forth on Schedule 3.4 attached hereto. 5.3 Additional Agreements. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. -11- 15 5.4 Consents and Filings. In addition to Article 8, each party will (a) within ten business days after the date hereof, make any required filings and submissions under the HSR Act with respect to the Offer, (b) substantially comply with any request for additional information issued by the Federal Trade Commission, the Department of Justice or any other antitrust authority in connection with the Offer, including the requests for production of documents and production of witnesses for interviews or depositions, and (c) take all reasonable actions to obtain any other consent, authorization, order or approval of, or any exemption by, any governmental entity required to be obtained or made in connection with the Offer and the other transactions contemplated by this Agreement. Each party will cooperate with and promptly furnish information to the other party in connection with obtaining such consents or making any such filings and will promptly furnish to the other party a copy of all filings made with a governmental agency, including, without limitation, any filings under the HSR Act. 5.5 Indemnification. (a) Parent shall indemnify, defend and hold harmless the Company, each stockholder who executes the Stockholder Purchase Agreement of even date herewith and each person who is now, or who becomes prior to the Closing Date, an officer or director of Company or any Company Subsidiary (the "Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or judgments, or amounts that are paid in settlement with the approval of Parent (which approval shall not be unreasonably withheld), arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of this Agreement or the transactions contemplated hereby. Notwithstanding the foregoing, no indemnity shall be available to the extent a court of competent jurisdiction finally determines that the claim for indemnity is caused by the Company knowingly and intentionally misrepresenting that it may enter into this Agreement. Without limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is brought against any Indemnified Party, (i) any counsel retained by the Indemnified Parties shall be reasonably satisfactory to Parent; (ii) Parent shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; and (iii) Parent will use all reasonable efforts to assist in the vigorous defense of any such matter, provided that Parent shall not be liable for any settlement of any claim effected without its written consent, which consent shall not be unreasonably withheld. Any Indemnified Party wishing to claim indemnification under this Section, upon learning of any such claim, action, suit, proceeding or investigation, shall notify Parent (but the failure so to notify Parent shall not relieve it from any liability which it may have under this Section except to the extent such failure materially prejudices Parent). The Indemnified Parties as a group may -12- 16 retain only one law firm to represent them with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any issue between the positions of any two or more Indemnified Parties. In addition to the foregoing, and without limiting in any manner the foregoing, any Indemnified Party shall be entitled to indemnification pursuant to any indemnification agreement set forth on Schedule 5.5 attached hereto. (b) From and after the Closing, Parent shall indemnify, defend and hold harmless each person who is now, or who becomes prior to the Closing Date, an officer or director of Company or any Company Subsidiary (the "D&O Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or judgments, or amounts that are paid in settlement with the approval of Parent (which approval shall not be unreasonably withheld), arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of the fact that such person is or was a director or officer of the Company or any Company Subsidiary, whether pertaining to any matter existing or occurring at or prior to the Closing Date (including, without limitation, any matter relating to the transactions contemplated hereby) and whether asserted or claimed prior to, or at or after, the Closing Date, in each case to the full extent the Company or the applicable Company Subsidiary would have been permitted under the law of the State of its incorporation and its Certificate, or Articles, of Incorporation and Bylaws to indemnify such person (and Parent shall pay expenses in advance of the final disposition of any such action or proceeding to each D&O Indemnified Party upon receipt of any undertaking by or on behalf of such D&O Indemnified Party to repay such amount if it shall ultimately be determined that he or she is not entitled to indemnification). Without limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is brought against any D&O Indemnified Party (whether arising before or after the Closing Date), (i) any counsel retained by the Indemnified Parties for any period after the Closing Date shall be reasonably satisfactory to Parent; (ii) after the Closing Date, Parent shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; and (iii) after the Closing Date, Parent will use all reasonable efforts to assist in the vigorous defense of any such matter, provided that Parent shall not be liable for any settlement of any claim effected without its written consent, which consent shall not be unreasonably withheld. Any D&O Indemnified Party wishing to claim indemnification under this Section, upon learning of any such claim, action, suit, proceeding or investigation, shall notify Parent (but the failure so to notify Parent shall not relieve it from any liability which it may have under this Section except to the extent such failure materially prejudices Parent). The Indemnified Parties as a group may retain only one law firm to represent them with respect to each such matter unless there is, under applicable standards -13- 17 of professional conduct, a conflict on any issue between the positions of any two or more Indemnified Parties. In addition to the foregoing, and without limiting in any manner the foregoing, after the Closing Date any D&O Indemnified Party shall be entitled to indemnification pursuant to any indemnification agreement set forth on Schedule 5.5 attached hereto. (c) The provisions of this Section 5.5 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and each D&O Indemnified Party, and each Indemnified Party's and each D&O Indemnified Party's heirs and representatives. 5.6 Company Indebtedness. Concurrently with the Closing, Parent shall repay or cause to be repaid all outstanding indebtedness under the Credit Agreement, dated as of August 19, 1994, as amended and restated as of March 13, 1996, among the Company, its subsidiaries and the lenders signatory thereto (the "Credit Agreement") or, at Parent's option, obtain the consent of the Company's lenders under the Credit Agreement to have such indebtedness remain outstanding. 5.7 Convertible Securities. The Company and the Company Subsidiaries shall take such action as may be permitted under the Company's Stock Option Plan and/or the terms of the Convertible Securities to effect the cancellation of the Convertible Securities on the Closing Date and shall comply with all requirements regarding income tax withholding in connection therewith. In addition to the foregoing, the Company will use its best efforts to obtain the Security Holder Consents and Acknowledgements referred to in Section 1.5 and to provide Parent with such other evidence requested by Parent that no holder of any Convertible Security will have any right to acquire any equity interest in the Company, Parent or any of their respective subsidiaries as a result of the exercise or conversion of any Convertible Security or other rights after the Closing Date. 5.8 Parent Commission Filings. Between the date hereof and the Closing Date, the Company shall, and shall cause each Company Subsidiary to, cooperate with Parent in connection with the preparation and filing of, and provide to Parent for inclusion or incorporation by reference in, any reports, filings, schedules or registration statements (including any prospectus contained in any such registration statement) to be filed by Parent with the Commission ("Parent Filings"). Without limiting the foregoing, the Company shall, and shall cause each Company Subsidiary to, take all reasonable actions requested by Parent to enable Parent to include or incorporate by reference in the Parent Filings any financial statement of the Company or any Company Subsidiary and any auditors' report thereon. 5.9 Maintain Listing. For period of one year from and after the Closing, Parent shall use its best efforts to cause the shares of Class A Common Stock to remain listed or quoted on -14- 18 a recognized national exchange or National Association of Securities Dealers, Inc. quotation system. 5.10 Independent Directors. From and after the Closing and until the later of one year from the Closing Date or the date on which the Company no longer is a reporting company under the Exchange Act, Parent shall cause the Company to maintain two independent directors. ARTICLE 6 FCC APPROVAL Within five business days after execution of this Agreement, the parties shall file with the FCC applications (the "FCC Applications") for the consent of the FCC to the change in control of the holders of the Company FCC Licenses ("FCC Consent"). The parties shall thereafter prosecute the FCC Applications with all reasonable diligence and otherwise use commercially reasonable efforts to obtain the FCC Consent as expeditiously as practicable and shall use commercially reasonable efforts to cause the FCC Consent to become a "Final Order." Each party will use commercially reasonable efforts to comply with the reasonable requests of the FCC for further information in connection with the FCC Applications. If reconsideration or judicial review is sought with respect to the FCC Consent, the party affected shall vigorously oppose such efforts for reconsideration or judicial review. Nothing in this Article 6 shall be construed to limit a party's right to terminate this Agreement pursuant to Article 8 hereof. As used herein, the term "Final Order" means a written action or order issued by the FCC setting forth the FCC Consent (a) which has not been reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with respect to which (i) no requests have been filed for administrative or judicial review, reconsideration, appeal or stay, and the time for filing any such requests and for the FCC to set aside the action on its own motion (whether upon reconsideration or otherwise) has expired, or (ii) in the event of the filing of any such request for review, reconsideration, appeal or stay, the action granting the FCC Consent shall have been reaffirmed or upheld and the time for further review, reconsideration or appeal has expired without the filing of any such action for further review or such requests have been withdrawn or denied. ARTICLE 7 CONDITIONS The obligations of Parent to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions: -15- 19 7.1 The applicable waiting period under the HSR Act shall have expired or terminated. 7.2 Subject to Section 4.4, the FCC Consent shall have become a Final Order; provided, however, if the primary lenders for Parent do not require that the FCC Consent becomes a Final Order in order to consummate the Closing, then Parent's condition shall be that the FCC shall have granted the FCC Consent and shall have given public notice of the grant of the FCC Consent. 7.3 No temporary restraining order, preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a government, regulatory or administrative agency or commission shall be in effect which restrains or prohibits the transactions contemplated hereby. 7.4 All representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date, except those representations and warranties which address matters only as of a particular date shall remain true and correct in all material respects as of such date. The Company shall have performed in all material respects all agreements and covenants required hereby to be performed by it prior to or at the Closing Date. ARTICLE 8 TERMINATION 8.1 Termination. This Agreement and the Offer may be terminated, by written notice promptly given to the other parties hereto, at any time prior to the Closing Date: (a) By mutual written consent of the parties; (b) By either Parent or the Company, if the FCC denies or dismisses the FCC Applications and the time for reconsideration or court review under the Communications Act of 1934 with respect to such denial or dismissal has expired and there is not pending with respect thereto a timely filed petition for reconsideration or request for review; or (c) By either the Company or Parent, if the Board of Directors of the Company concludes, after taking into account the advice of outside legal counsel (which may be the Company's regularly engaged legal counsel), that accepting a proposed Competing Transaction is required under applicable law for the discharge of its fiduciary duties and the Company enters into an agreement for such Competing Transaction; provided, however, that the Company may not terminate this Agreement pursuant to this Section 8.1(c) earlier than 48 hours after furnishing notice to Parent of such Competing Transaction in accordance with Section 4.2; -16- 20 (d) By either the Company or Parent if (i) the Company shall have determined, pursuant to duly adopted resolutions of its Board of Directors, not to recommend acceptance of the Offer, or the Company's recommendation to accept the Offer is withdrawn or modified, or resolved to be withdrawn or modified, by reason of receipt of a Takeover Proposal, or (ii) the Company recommends, pursuant to duly adopted resolutions, any Takeover Proposal from a person or entity other than Parent or its affiliates; provided, however, that Parent shall not terminate this Agreement pursuant to this subsection if as a result of the Company's receipt of a Takeover Proposal from a third-party the Company, as required by applicable law as advised by outside counsel, withdraws, modifies or amends its approval or recommendation of acceptance of the Offer but within five business days thereafter the Company publicly reconfirms to all of its stockholders its recommendation of acceptance of the Offer; (e) By Parent, if the Company fails to perform or breaches any of its material obligations or duties under this Agreement and the Company has not cured such failure to perform or breach within 15 days after delivery of written notice from Parent or upon a material breach of any representation and warranty of the Company contained herein; (f) By the Company, if Parent fails to perform or breaches any of its material obligations or duties under this Agreement, and the defaulting party has not cured such failure to perform or breach within 15 days after delivery of written notice from the Company or upon a material breach of any representation and warranty of Parent contained herein; and (g) By either Parent or the Company, if the Closing shall not have occurred on or before October 31, 1996 (the "Termination Date"); provided, however, the right to terminate this Agreement under this Section 8.1(g) shall not be available to any party whose failure to fulfill any obligation hereunder has been the cause of, or results in, the failure of the Closing to have occurred on or before the Termination Date. 8.2 Effect of Termination. (a) In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability or obligations on the part of any party hereto, except for the agreements set forth in Sections 5.1 and 5.5(a) and except (i) liability for any wilful breach of any obligation, covenant or agreement contained herein or any intentional failure of the representations and warranties contained hereto to have been true, and (ii) (x) if the stockholders who are parties to the Stockholder Purchase Agreement of even date herewith among such stockholders and Parent terminate such agreement and (y) (1) the Company terminates this Agreement pursuant to Section 8.1(c) or -17- 21 8.1(d), or (y) Parent terminates this Agreement and the Offer pursuant to Section 8.1(c) or 8(d), the Company will pay to Parent $13.5 million within five business days after the conditions contained in the foregoing clauses (x) and (y) are satisfied; provided, however, if the Company is prohibited by its principal senior lender or lenders from paying the sum required under this clause (ii) in cash, then in lieu of such payment, the Company shall immediately issue to the Parent a number of shares of Class A Common Stock having a fair market value equal to such sum (determined by taking the average closing price of the Class A Common Stock on the Nasdaq National Market for the ten (10) business days immediately following the public announcement of the termination of this Agreement). If the Company shall issue shares to Parent as contemplated in the preceding sentence, such shares shall be registered under the Securities Act and freely tradeable upon delivery, or if the foregoing is not reasonably practicable, shall be subject to a registration rights agreement enabling Parent to sell such shares without undue delay or expense. (b) The Company acknowledges that the agreements contained in Section 8.2(a)(ii) are an integral part of the transactions contemplated in this Agreement, and that, without these agreements, Parent would not enter into this Agreement. Accordingly, if the Company fails to promptly pay any amounts under Section 8.2(a)(ii) when due, the Company shall in addition thereto pay to Parent all costs and expenses (including fees and disbursements of counsel) incurred in collecting such amounts together with interest on the unpaid amount from the date such payment was required to be made until the date such payment is received by the party entitled to such payment at a per annum rate equal to the prime rate, published in The Wall Street Journal under the heading "Money Rates" or a successor heading, as in effect from time to time during such period. (c) Parent agrees that recovery of damages shall be the sole and exclusive remedy of Parent in connection with a termination of this Agreement for the reasons set forth in Section 8.2(a)(i). Parent also agrees recovery of the amount set forth in Section 8.2(a)(ii) shall be the sole and exclusive remedy of Parent in connection with a termination of this Agreement for the reasons set forth in Section 8.2(a)(ii), regardless of the actual damages sustained. The Company agrees that recovery of damages shall be the sole and exclusive remedy of the Company in connection with a termination of this Agreement for the reasons set forth in Section 8.2(a)(i). Parent hereby waives the remedy of specific performance of the consummation of the transactions contemplated hereby. -18- 22 ARTICLE 9 DEFINITIONS The following terms shall have the meanings set forth in the Sections opposite such term.
Term Section ---- ------- Agreement Preamble Class A Common Stock Recital A Class B Common Stock Recital A Closing 1.6 Closing Conditions 1.1 Closing Date 1.6 Commission 1.2 Company Preamble Company Common Recital A Company FCC Licenses Section 2.2 Company Subsidiary 4.1(a) Competing Transaction 4.2 Confidentiality Agreement 5.1 Convertible Security or Convertible Securities 1.5 Credit Agreement 5.6 Closing Date 1.5 D&O Indemnified Parties 5.5(b) Exchange Act 1.2 FCC 2.2 FCC Applications Article 6 FCC Consent Article 6 Final Order Article 6 HSR Act 2.2 Indemnified Parties 5.5(a) Offer Recital A Offer Documents 1.2 Offer Price Recital A Parent Preamble Parent Filings 5.8 Renewal Application 4.4 Schedule 14D-9 1.4 Security Holder Consent and Acknowledgement 1.5 Subsidiary Reorganizations 4.1(b)(v) Takeover Proposal 4.2 Termination Date 8.1(g)
ARTICLE 10 GENERAL PROVISIONS 10.1 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. -19- 23 10.2 Waiver. Any party hereto may (a) extend the time for the performance of any of the obligations or other acts of any other party hereto or (b) waive compliance with any of the agreements of any other party or with any conditions to its own obligations. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of the party making the waiver or granting the extension by a duly authorized officer. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 10.3 Public Statements. Each of the parties hereto promptly shall advise, consult and cooperate with the other prior to issuing, or permitting any of its subsidiaries, directors, officers, employees or agents to issue, any press release or other statement to the press or any third-party with respect to this Agreement or the transactions contemplated hereby; provided, however, if a party is advised in writing by its counsel that applicable law requires such party to make a press release or statement, such party may do so only after consultation with the other parties hereto. 10.4 Assignment and Binding Effect. Prior to Closing, neither this Agreement nor any of the rights or obligations hereunder may be assigned by any party without the prior written consent of the other parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees, assigns, representatives, and agents and no other person shall have any right, benefit or obligation hereunder. Notwithstanding the foregoing, the Indemnified Parties and D&O Indemnified Parties shall be third-party beneficiaries of Section 5.5. 10.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. 10.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. Notwithstanding the foregoing, this Agreement does not supersede the Confidentiality Agreement, which shall remain in full force and effect; provided, however, at the Closing Date, the Company shall be deemed to have waived any provision in the Confidentiality Agreement which restricts Parent from acquiring any shares of capital stock of the Company. 10.7 Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to -20- 24 be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 10.8 Titles. The titles, captions or headings of the Articles and Sections herein are for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 10.9 Attorneys' Fees. Should any party hereto institute any action or proceeding at law or in equity to enforce any provision of this Agreement, including an action for declaratory relief, or for damages by reason of an alleged breach of any provision of this Agreement, or otherwise in connection with this Agreement, or any provision hereof, the prevailing party shall be entitled to recover from the losing party or parties reasonable attorneys' fees and costs for services rendered to the prevailing party in such action or proceeding. 10.10 Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 10.11 Notices. Unless applicable law requires a different method of giving notice, any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing. Assuming that the contents of a notice meet the requirements of the specific Section of this Agreement which mandates the giving of that notice, a notice shall be validly given or made to another party if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, or if transmitted by telegraph, telecopy or other electronic written transmission device or if sent by overnight courier service, and if addressed to the applicable party as set forth below. If such notice, demand or other communication is served personally, service shall be conclusively deemed given at the time of such personal service. If such notice, demand or other communication is given by mail, service shall be conclusively deemed given seventy-two (72) hours after the deposit thereof in the United States mail. If such notice, demand or other communication is given by overnight courier, or electronic transmission, service shall be conclusively deemed given at the time of confirmation of delivery. The addresses for the parties are as follows: -21- 25 If to Parent: Clear Channel Radio, Inc. 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Attention: Randal Mays Telecopier No.: (210) 829-8080 with a copy to: Patton Boggs, L.L.P. 2550 M Street, N.W. Washington, D.C. 20037 Attention: Gerald J. Laporte, Esq. Telecopier No.: (202) 457-6315 If to the Company: 6767 West Tropicana Avenue, Suite 102 Las Vegas, Nevada 89103 Attention: Mr. Carl Parmer Telecopier: (702) 367-3491 with a copy to: Jeffer, Mangels, Butler & Marmaro LLP 2121 Avenue of the Stars, Tenth Floor Los Angeles, California 90067 Attention: Bruce P. Jeffer, Esq. Telecopier No.: (310) 203-0567 Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided, by a written notice given in the aforesaid manner to the other parties hereto. 10.12 Incorporation by Reference. All Schedules attached hereto or to be delivered in connection herewith are incorporated herein by this reference. 10.13 Representations and Warranties. All representations and warranties of the parties contained herein shall expire, and be terminated and extinguished, on the Closing Date. -22- 26 IN WITNESS WHEREOF, each of Parent and the Company has caused this Agreement to be executed as of the date first written above by its officer thereunto duly authorized. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS --------------------------- Name: Mark P. Mays ----------------------- Title: Senior Vice President ---------------------- HEFTEL BROADCASTING CORPORATION By: /s/ CARL PARMER --------------------------- Name: Carl Parmer ----------------------- Title: President -- Co-CEO ---------------------- -23- 27 LIST OF SCHEDULES 1.5 Holders of Convertible Securities 3.2 Capitalization 3.4 Fees 4.1 Subsidiary Reorganizations 5.5 Indemnification Agreements -24- 28 SCHEDULE 1.5 HOLDERS OF CONVERTIBLE SECURITIES OPTIONS
NUMBER OF EXERCISE EXPIRATION SHARES PRICE DATE --------- -------- ---------- Cecil Heftel 271,075 $15.25 12/14/2005 Carl Parmer 48,264 $15.25 12/14/2005 Richard Heftel 30,000 $15.25 12/14/2005 William Tanner 30,000 $15.25 12/14/2005 David DuBose 10,000 $15.25 12/14/2005 David Haymore 5,000 $15.25 12/14/2005 Javier Luevano 5,000 $15.25 12/14/2005 Jose Valle 10,000 $15.25 12/14/2005 Julio Omana 25,000 $15.25 12/14/2005 John Kendrick 30,000 $15.25 12/14/2005 Carlos Rubio 30,000 $15.25 12/14/2005 John Mason* 10,000 $15.25 12/14/2005 Madison Graves 5,000 $18.63 11/19/2005 Javier Romero 15,000 $15.50 12/05/2005 Luis Diaz- 37,500 $14.00 06/30/2005 Albertini John Kendrick 25,000 $10.00 08/02/2004 John Mason 5,000 $10.00 08/02/2004 ------- Total 591,839
WARRANTS 1. Cecil Heftel has a warrant to purchase 806,678 shares of Class B Common Stock of the Company at an exercise price of $1.05 per share. The expiration date of the warrant is April 27, 1997.* 2. Mr. Robert Sevey has a warrant to purchase 43,428 shares of Class B Stock of the Company at an exercise price of $2.29 per share. The expiration date of the warrant is April 27, 1997.* - ----------------------------- * Not granted under the Company's Stock Option Plan. 29 SCHEDULE 3.2 COMPANY CAPITALIZATION
COMPANY CLASS AUTHORIZED OUTSTANDING ----- ---------- ----------- Class A Common 30,000,000 6,336,610 Stock $0.001 par value Class B Common 7,000,000 3,769,176 Stock $0.001 par value Preferred Stock 5,000,000 335,634 $0.001 par value shares of Series A
The Company has outstanding options to purchase 591,839 shares of Class A Common Stock and outstanding warrants to purchase 850,106 shares of Class B Common Stock. 30 SCHEDULE 3.4 FEES 1. Letter Agreement dated February 16, 1995, between Alex. Brown & Sons Incorporated and the Company. 2. Letter Agreement dated March 7, 1996, between Donaldson, Lufkin & Jenrette and the Company. 31 SCHEDULE 4.1(B) SUBSIDIARY REORGANIZATIONS 1. La Oferta, Inc., an Illinois corporation, will be merged into HBC Chicago, Inc., a Delaware corporation. 2. Viva Broadcasting Corporation, a Florida corporation, and Viva Acquisition Corporation, a Florida corporation, will be merged into HBC Florida, Inc., a Delaware corporation ("HFI"). Immediately thereafter Viva America Media Group, a Florida general partnership will be dissolved, with HFI assuming all liabilities and receiving all assets. 32 SCHEDULE 5.5 INDEMNIFICATION AGREEMENTS 1. Indemnification Agreement dated November 20, 1995 by and between the Company and Madison B. Graves, II. 2. Indemnification Agreement dated January 1, 1993 by and between the Company and John E. Mason. 3. Indemnification Agreement dated January 1, 1993 by and between the Company and Carl Parmer. 4. Indemnification Agreement dated January 1, 1993 by and between the Company and Cecil Heftel. 5. Indemnification Agreement dated January 1, 1993 by and between the Company and Richard Heftel. 6. Indemnification Agreement dated January 1, 1993 by and between the Company and Susan Heftel-Liquido. 7. Indemnification Agreement dated July 27, 1994 by and between the Company and Jeffrey Amling. EX-99.(C)(2) 12 STOCKHOLDER PURCHASE AGREEMENT 1 EXHIBIT 99(c)(2) STOCKHOLDER PURCHASE AGREEMENT This STOCKHOLDER PURCHASE AGREEMENT (this "Agreement") is made and entered into on June 1, 1996, by and among Clear Channel Radio, Inc., a Nevada corporation ("Purchaser"), and the stockholders listed on Exhibit A attached hereto (each a "Stockholder", and collectively the "Stockholders") with reference to the following facts: A. Each Stockholder owns (1) the number of shares of Class A Common Stock, $.001 par value per share, and Class B Common Stock, $.001 par value per share, of the Company (collectively, the "Common Stock") set forth opposite such Stockholder's name on Exhibit A attached hereto, in the aggregate totaling 3,516,529 shares of the Common Stock and (2) the number of shares of the Series A Preferred Stock set forth opposite such Stockholder's name on Exhibit A hereto (the Series A Preferred Stock and the Common Stock are collectively referred to as the "Stocks"); and B. The Purchaser desires to purchase and the Stockholders desire to sell the Stocks on the terms and conditions set forth herein; and C. In connection with this transaction, Purchaser and Heftel Broadcasting Corporation, a Delaware corporation (the "Company"), are simultaneously entering into a Tender Offer Agreement of even date herewith (the "Tender Offer Agreement") providing for the making of a cash tender offer (the "Offer") by the Purchaser for all of the outstanding shares of Common Stock. 2 NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements herein contained, the parties agree as follows: 1. Definitions. Except as otherwise defined in this Agreement, all terms, the first letters of which are capitalized, shall have the meanings assigned to them in the Tender Offer Agreement. 2. Purchase of Stock. Subject to the terms and conditions set forth herein, each Stockholder hereby agrees to sell and the Purchaser hereby agrees to purchase, all the shares of Common Stock owned by each Stockholder (the "Shares") on the terms set forth in the Tender Offer Agreement and the Series A Preferred Stock for $1.00 per share plus accrued but unpaid dividends thereon. The Closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Jeffer, Mangels, Butler & Marmaro LLP, 2121 Avenue of the Stars, 10th Floor, Los Angeles, California 90067 on the first business day after satisfaction or waiver of the conditions set forth in Sections 11 and 12 or at such other place, time and date as the parties may mutually agree. The date and time of such Closing are herein referred to as the "Closing Date." 3. Stock Options and Warrants. Each Stockholder hereby consents to the treatment prescribed by the Tender Offer Agreement with respect to each option or warrant to purchase shares of Common Stock held by such Stockholder. -2- 3 4. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants to the Purchaser as follows: (a) Authority. This Agreement has been duly executed and delivered by such Stockholder and constitutes such Stockholder's valid and binding obligation enforceable in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, and other similar laws affecting the enforcement of creditors' right generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding therefor may be brought. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to him or to his property or assets. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required by or with respect to him in connection with the execution and delivery of this Agreement or the consummation by him of the transactions contemplated hereby. -3- 4 (b) The Shares. Such Stockholder has, and the sale by such Stockholder of the Shares hereunder will pass to the Purchaser, upon acceptance for payment and payment therefore, good title to the Shares, free and clear of any claims, liens, encumbrances and security interests whatsoever. Such Stockholder does not own any share of Common Stock other than the Shares. 5. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Stockholders as follows: (a) Authority. The Purchaser has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Purchaser and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes a valid and binding obligation of Purchaser enforceable in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding therefor may be brought. (b) Securities Act. Any Shares purchased by the Purchaser pursuant to this Agreement will be acquired for investment only and not with a view to any public distribution thereof and the Purchaser will not offer to sell or otherwise -4- 5 dispose of any Shares so acquired by it in violation of any of the registration requirements of the Securities Act of 1933, as amended. 6. Covenants of the Stockholders. (a) Each Stockholder agrees in his capacity as a Stockholder, until the termination of this Agreement, not to (i) sell, transfer, pledge, assign or otherwise dispose of, or tender or agree to tender into any tender offer with respect to, or enter into any contract, option or other arrangement with respect to the sale, transfer, pledge, assignment or other disposition of such Stockholder's Shares to any person other than the Purchaser or the Purchaser's designee; (ii) acquire any additional shares of Common Stock without the prior consent of the Purchaser; (iii) deposit any Shares into a voting trust or grant a proxy or enter into a voting agreement with respect to any Shares; (iv) hold discussions with any person other than the Purchaser and it's affiliates with respect to any offer or potential offer for the Shares other than the Offer; or (v) solicit, encourage or take any other action to facilitate (including by way of furnishing information) any inquires or proposals for -5- 6 any merger or consolidation involving the Company, the acquisition of any shares of Common Stock or the acquisition of all or substantially all the assets of the Company by any person other than the Purchaser or its sole stockholder. (b) Each Stockholder agrees to notify the Purchaser promptly and to provide all details requested by the Purchaser if such Stockholder shall be approached or solicited, directly or indirectly, by any person with respect to any matter described in Section 6(a)(iv) or 6(a)(v). (c) Each Stockholder agrees that, unless this Agreement has been terminated or the Purchaser has purchased all the Shares, at any annual or special meeting of the shareholders of the Company and in any action by written consent of the shareholders of the Company, such Stockholder will vote such Stockholder's Shares against any action or agreement which would result in a breach of any representation, warranty or covenant of the Company in the Tender Offer Agreement or which would otherwise, in the sole judgment of the Purchaser, impede, interfere with or attempt to discourage the Offer. 7. No Brokers. Except for such fees as may be payable as set forth in the Tender Offer Agreement, each of the Stockholders, and the Purchaser represents, as to himself, herself or itself and his, her or its affiliates, that no agent, broker, investment banker or other firm or person is or will be entitled to any broker's or finder's fees or any other commission -6- 7 or similar fee in connection with any of the transactions contemplated by this Agreement and respectively agrees to indemnify and hold the others harmless from and against any and all claims, liabilities or obligations with respect to any such fees, commissions or expenses asserted by any person on the basis of any act or statement alleged to have occurred or been made by such party or its affiliates. 8. Survival of Representations. All representations, warranties and agreements made by the parties to this Agreement shall survive the closings hereunder notwithstanding any investigation at any time made by or on behalf of any party hereto. 9. Legend. Promptly after the request of Purchaser each Stockholder shall cause all certificates representing Shares to bear in a conspicuous place the following legend: "The shares represented by this certificate may not be sold, exchanged or otherwise transferred or disposed of except, in compliance with the terms and conditions of the Stockholders' Purchase Agreement, dated as of June 1, 1996, among Clear Channel Radio, Inc, and, inter alia, the registered holder of this certificate. 10. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that the Purchaser may assign in its sole discretion, any or all of its rights, interests and obligations hereunder to it's sole stockholder or to any direct or indirect wholly-owned subsidiary of such stockholder. Subject to the preceding sentence, this Agreement will be binding upon, inure to -7- 8 the benefit of and be enforceable by the parties and their respective successors and assigns. 11. Conditions to Obligations of Certain Stockholders. The obligations of Cecil Heftel ("Heftel") and Carl Parmer ("Parmer") to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions: (a) the amounts set forth in Paragraph 1 of each of the Agreements Not to Compete entered into between the Company and Heftel and Parmer of even date herewith shall have been paid. (b) the amounts set forth in Paragraph 1 of each of the Settlement Agreements between the Company and Heftel and Parmer of even date herewith shall have been paid. 12. Conditions to Obligations of Purchaser. The obligations of Purchaser to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions: (a) The applicable waiting period under the HSR Act shall have expired or terminated. (b) The FCC Consent shall have become a Final Order; provided, however, if the primary lenders for Purchaser do not require that the FCC Consent becomes a Final Order in order to consummate the Closing, then Purchaser's condition shall be that the FCC shall have granted the FCC Consent and shall have given public notice of the grant of the FCC Consent. Notwithstanding the foregoing, in the event at the Closing the application for renewal of the license for WAMR-FM, Miami, -8- 9 Florida remains pending or has not become a Final Order, the parties agree the Closing shall occur. (c) No temporary restraining order, preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a government, regulatory or administrative agency or commission shall be in effect which restrains or prohibits the transactions contemplated hereby. (d) All representations and warranties of the Stockholders contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date, except those representations and warranties which address matters only as of a particular date shall remain true and correct in all material respects as of such date. The Stockholders shall have performed in all material respects ass agreements and covenants required by this Agreement to be performed by them prior to or at the Closing Date. 13. Termination. This agreement may be terminated, by written notice promptly given to the other parties hereto, at any time prior to the Closing Date: (a) by mutual written consent of all of the parties hereto; (b) by any Stockholder as to his individual obligations if the Company is able to terminate the Tender Offer Agreement pursuant to any of subparagraphs 8.1(b), (c), (d), (f), or (g) of the Tender Offer Agreement; and -9- 10 (c) by the Purchaser if the Purchaser has terminated the Tender Offer Agreement pursuant to any of subparagraphs 8.1(b), (c), (d), (e), or (g) of the Tender Offer Agreement. 14. Indemnification. Purchaser shall indemnify, defend and hold harmless each Stockholder (the "Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or judgments, or amounts that are paid in settlement with the approval of Purchaser (which approval shall not be unreasonably withheld), arising out of or related to any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of this Agreement or the Tender Offer Agreement or the transactions contemplated hereby or thereby. Notwithstanding the foregoing, no indemnity shall be available to the extent a court of competent jurisdiction finally determines that the claim for indemnity is caused by the Indemnified Party knowingly and intentionally misrepresenting that it may enter into this Agreement. Without limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is brought against any Indemnified Party, (i) any counsel retained by the Indemnified Parties shall be reasonably satisfactory to Purchaser; (ii) Purchaser shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; and (iii) Purchaser will use all reasonable efforts to assist in the vigorous defense of any such matter, provided that Purchaser shall not be liable for any -10- 11 settlement of any claim effected without its written consent, which consent shall not be unreasonably withheld. Any Indemnified Party wishing to claim indemnification under this Section, upon learning of any such claim, action, suit, proceeding or investigation, shall notify Purchaser (but the failure to so notify Purchaser shall not relieve it from any liability which it may have under this Section except to the extent such failure materially prejudices Purchaser). The Indemnified Parties as a group may retain only one law firm to represent them with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any issue between the positions of any two or more Indemnified Parties. 15. General Provisions. (a) Specific Performance. The parties hereto acknowledge that damages would be an inadequate remedy for any breach of the provisions of this Agreement and agree that the obligations of the parties hereunder shall be specifically enforceable. (b) Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense. (c) Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto. (d) Notices. All notices and other communications hereunder shall be in writing and shall be deemed -11- 12 given if delivered personally or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (i) if to the Purchaser, to 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Attention: Randal Mays (ii) if to a Stockholder, to the address set forth below such Stockholder's name on Exhibit A. (e) Interpretation. When a reference is made in this Agreement to Sections or Exhibits, such reference shall be to a Section or Exhibit to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". (f) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more the counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. (g) Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and instruments referred to herein) (i) constitutes the entire agreement and supersedes -12- 13 all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. (i) Partial Invalidity. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. In any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. -13- 14 IN WITNESS WHEREOF, the Purchaser and the Stockholders have executed this Agreement as of the date first written above. Clear Channel Radio, Inc. By: /s/ MARK P. MAYS ---------------------------- Name: Mark P. Mays ------------------------ Title: Senior Vice President ----------------------- /s/ CATHERINE ROLPH - -------------------------------- Catharine Rolph /s/ MARGARET A.H. WILSON - -------------------------------- Margaret A.H. Wilson, individually and as custodian for each of Nalani Wilson, Ryan Wilson and Deven Wilson, under the Hawaii Uniform Transfers to Minors Act /s/ SUSAN HEFTEL-LIQUIDO - -------------------------------- Susan Heftel-Liquido, as trustee of the Susan Heftel-Liquido Trust u/t/d 2/1/93 and as custodian for each of Francisco Liquido, Tiara Liquido, Carlo Liquido and Fernando Liquido under Hawaii Uniform Transfers to Minors Act /s/ CHRISTOPHER LEE HEFTEL - -------------------------------- Christopher Lee Heftel, individually and as custodian for each of Logan Heftel, Brannon Heftel and Hayden Heftel under the Tennessee Uniform Transfers to Minors Act /s/ TERRY HEFTEL - -------------------------------- Terry Heftel, individually and as custodian for each of Jonathan Heftel, Jeffrey Welch and Jeremy Heftel under the Utah Uniform Transfers to Minors Act -14- 15 /s/ RICHARD HEFTEL - ----------------------------------- Richard Heftel, as trustee of the Richard Heftel Living Trust dated January 9, 1996, and as custodian for each of Kawika Heftel, Christian Heftel and Brittany Heftel, under the California Uniform Transfers to Minors Act /S/ CECIL HEFTEL - --------------------------- Cecil Heftel /s/ MICHELLE LOPEZ HENDRICK - --------------------------- Michelle Lopez Hendrick /s/ MICHAEL DONOHOE - --------------------------- Michael Donohoe /s/ JAMES DONOHOE - --------------------------- James Donohoe /s/ LANI DONOHOE - ----------------------------------- Lani Donohoe, as custodian for Josh Donohoe, under the California Uniform Transfers to Minors Act /s/ CARL PARMER - ----------------------------------- Carl Parmer -15- 16 EXHIBIT "A"
Name Number of Shares of Class B - ---- --------------------------- Catharine Rolph 232,146 Margaret A.H. Wilson 445,649 Susan Heftel-Liquido, as trustee of the Susan Heftel-Liquido Trust u/t/d 2/1/93 503,727 Christopher Lee Heftel 321,872 Terry Heftel 96,810 Richard Heftel, as trustee of the Richard Heftel Living Trust dated January 9, 1996 559,118 Cecil Heftel 696,181 Michele Lopez 4,400 Michael Donohoe 4,400 James Donohoe 4,400 Lani Donohoe, as custodian for Josh Donohoe, under the California Uniform Transfers to Minors Act 4,400 Margaret Wilson, as custodian for Nalani Wilson, under the Hawaii Uniform Transfers to Minors Act 4,400 Margaret Wilson, as custodian for Ryan Wilson, under the Hawaii Uniform Transfers to Minors Act 4,400 Margaret Wilson, as custodian for Deven Wilson, under the Hawaii Uniform Transfers to Minors Act 4,400 Susan Heftel-Liquido, as custodian for Francisco Liquido, under Hawaii Uniform Transfers to Minors Act 4,400 Susan Heftel-Liquido, as custodian for Tiara Liquido, under the Hawaii Uniform Transfers to Minors Act 4,400
-16- 17
Name Number of Shares of Class B - ---- --------------------------- Susan Heftel-Liquido, as custodian for Carlo Liquido, under the Hawaii Uniform Transfers to Minors Act 4,400 Susan Heftel-Liquido, as custodian for Fernando Liquido, under the Hawaii Uniform Transfers to Minors Act 4,400 Christopher Lee Heftel, as custodian for Logan Heftel, under the Tennessee Uniform Transfers to Minors Act 4,400 Christopher Lee Heftel, as custodian for Brannon Heftel, under the Tennessee Uniform Transfers to Minors Act 4,400 Christopher Lee Heftel, as custodian for Hayden Heftel, under the Tennessee Uniform Transfers to Minors Act 4,400 Terry Heftel, as custodian for Jonathan Heftel, under the Utah Uniform Transfers to Minors Act 4,400 Terry Heftel, as custodian for Jeffrey Welch, under the Utah Uniform Transfers to Minors Act 4,400 Terry Heftel, as custodian for Jeremy Heftel, under the Utah Uniform Transfers to Minors Act 4,400 Richard Heftel, as custodian for Kawika Heftel, under the California Uniform Transfers to Minors Act 4,400 Richard Heftel, as custodian for Christian Heftel, under the California Uniform Transfers to Minors Act 4,400 Richard Heftel, as custodian for Brittany Heftel, under the California Uniform Transfers to Minors Act 4,400
Carl Parmer owns 413,026 shares of Class B Common Stock and 160,000 shares of Class A Common Stock. Catharine Rolph owns 335,635 shares of Series A Preferred Stock. -17- EX-99.(C)(3) 13 AGREEMENT NOT TO COMPETE 1 EXHIBIT 99(c)(3) AGREEMENT NOT TO COMPETE THIS AGREEMENT NOT TO COMPETE (the "Agreement") is made and entered on June 1, 1996, by and between CECIL HEFTEL ("Covenantor") and HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the "Company"), with reference to the following facts: The parties hereto hereby agree as follows: 1. Covenant Not to Compete. For a period of five years commencing on the Closing Date (as defined in the Stockholder Purchase Agreement of even date herewith among Covenantor, the Company and other parties), Covenantor, without the prior written consent of the Company, will not, directly or indirectly, own (except that Covenantor may own securities which constitute not more than five percent (5%) of a publicly traded company's issued and outstanding capital stock), work for, act as consultant or advisor to, manage, operate, or control or participate in the ownership, management, operation or control of, any radio station in the markets set forth in Exhibit A attached hereto which broadcasts predominantly in Spanish. In consideration of the covenant set forth in the first sentence of this Section, on the Closing Date, the Company shall pay $2.5 million to Covenantor by wire-transfer of immediately available funds to an account designated by Covenantor. 2. Interpretation of Scope of Covenant. The parties hereto agree that the duration and area for which the covenant not to compete set forth herein is to be effective are reasonable. The parties intend for the provisions of this Agreement to be construed, interpreted and enforced to the maximum extent permitted by law. In the event that any provision of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, or that the time period or the area, or both of them, are unreasonable and that this Agreement is to that extent unenforceable, the parties hereto agree that this Agreement shall remain in full force and effect for the greatest time period and the greatest area that would not render it unenforceable. 3. Remedies for Breach. Covenantor acknowledges and agrees that the Company shall be entitled, in addition to any other remedies it may have at law, to the remedies of injunction, specific performance and other equitable relief for a breach of this Agreement by Covenantor. This provision shall not, however, be construed as a waiver of any of the rights which the Company may have for damages or otherwise. 4. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. -1- 2 5. Governing Law. This Agreement and the rights of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware without giving effect to the choice of law principles thereof. 6. Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 7. Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 8. Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 9. Waivers. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 10. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto relating to the matters provided for herein and supersedes any and all prior agreements, arrangements, negotiations, discussions and understandings relating to the matters provided for herein. 11. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors, heirs, assigns and representatives. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. HEFTEL BROADCASTING CORPORATION By /s/ CARL PARMER ----------------------------- Name: Carl Parmer ----------------------- Title: President & Co-CEO ----------------------- /s/ Cecil Heftel ------------------------------- CECIL HEFTEL -2- 3 The undersigned hereby guarantees the obligations of Heftel Broadcasting Corporation under the attached Agreement Not To Compete. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------- Name: Mark P. Mays ---------------------- Title: Senior Vice President ---------------------- -3- 4 EXHIBIT A Markets Dallas/Ft. Worth Miami Los Angeles Chicago New York Las Vegas -4- EX-99.(C)(4) 14 AGREEMENT NOT TO COMPETE 1 EXHIBIT 99(c)(4) AGREEMENT NOT TO COMPETE THIS AGREEMENT NOT TO COMPETE (the "Agreement") is made and entered on June 1, 1996, by and between CARL PARMER ("Covenantor") and HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the "Company"), with reference to the following facts: The parties hereto hereby agree as follows: 1. Covenant Not to Compete. For a period of five years commencing on the Closing Date (as defined in the Stockholder Purchase Agreement of even date herewith among Covenantor, the Company and other parties), Covenantor, without the prior written consent of the Company, will not, directly or indirectly, own (except that Covenantor may own securities which constitute not more than five percent (5%) of a publicly traded company's issued and outstanding capital stock), work for, act as consultant or advisor to, manage, operate, or control or participate in the ownership, management, operation or control of, any radio station in the markets set forth in Exhibit A attached hereto which broadcasts predominantly in Spanish. In consideration of the covenant set forth in the first sentence of this Section, on the Closing Date, the Company shall pay $4.5 million to Covenantor by wire-transfer of immediately available funds to an account designated by Covenantor. 2. Interpretation of Scope of Covenant. The parties hereto agree that the duration and area for which the covenant not to compete set forth herein is to be effective are reasonable. The parties intend for the provisions of this Agreement to be construed, interpreted and enforced to the maximum extent permitted by law. In the event that any provision of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, or that the time period or the area, or both of them, are unreasonable and that this Agreement is to that extent unenforceable, the parties hereto agree that this Agreement shall remain in full force and effect for the greatest time period and the greatest area that would not render it unenforceable. 3. Remedies for Breach. Covenantor acknowledges and agrees that the Company shall be entitled, in addition to any other remedies it may have at law, to the remedies of injunction, specific performance and other equitable relief for a breach of this Agreement by Covenantor. This provision shall not, however, be construed as a waiver of any of the rights which the Company may have for damages or otherwise. 4. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. -1- 2 5. Governing Law. This Agreement and the rights of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware without giving effect to the choice of law principles thereof. 6. Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 7. Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 8. Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 9. Waivers. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 10. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto relating to the matters provided for herein and supersedes any and all prior agreements, arrangements, negotiations, discussions and understandings relating to the matters provided for herein. 11. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors, heirs, assigns and representatives. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. HEFTEL BROADCASTING CORPORATION By /s/ CECIL HEFTEL ----------------------------- Name: Cecil Heftel ------------------------ Title: Chairman & Co-CEO ----------------------- /s/ CARL PARMER ------------------------------- CARL PARMER -2- 3 The undersigned hereby guarantees the obligations of Heftel Broadcasting Corporation under the attached Agreement Not To Compete. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------- Name: Mark P. Mays ----------------------- Title: Senior Vice President ---------------------- -3- 4 EXHIBIT A Markets Dallas/Ft. Worth Miami Los Angeles Chicago New York Las Vegas -4- EX-99.(C)(5) 15 SETTLEMENT AGREEMENT 1 EXHIBIT 99(c)(5) SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (this "Agreement") is made and entered into on June 1, 1996, by and between HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the "Company"), and CECIL HEFTEL ("Executive"), with reference to the following facts. Recitals A. Executive is employed the Company under an Employment Agreement dated as of December 1, 1993, between Executive and the Company (the "Employment Agreement"). B. Executive and Clear Channel Radio, Inc. ("Parent") have entered into a Stockholder Purchase Agreement of even date herewith (the "Stockholder Purchase Agreement") contemplating a sale of the stock of the Company owned by Executive and other parties to Parent (the "Stock Sale"). C. Executive has offered to continue service and to complete his obligations under the Employment Agreement following consummation of the Stock Sale. Parent has rejected that offer and informed Executive that it will cause the Company to terminate his employment with the Company and the Employment Agreement immediately following consummation of the Stock Sale, without cause. D. The parties acknowledge and agree that Executive will suffer substantial damages as a result of such termination in addition to damages which Executive may be able to mitigate by obtaining alternative employment. E. Pursuant to this Agreement, the parties agree to compromise and settle Executive's claim for damages resulting from the Company's repudiation and intended termination of the Employment Agreement and Executive's employment thereunder as provided herein. Agreements The parties agree as follows: 1. In consideration of the release given by Executive in Paragraph 2 below, concurrently with the Closing (as defined in the Stockholder Purchase Agreement), the Company will pay to Executive the sum of $11,861,069 (the "Fixed Amount") plus all amounts payable under the Employment Agreement for services rendered up to the Closing Date, minus all amounts owed to the Company by Executive on the Closing Date by wire transfer of immediately available funds to an account designated by Executive. The parties acknowledge and agree that the Fixed Amount is less than the amount by which the present value as of 2 the Closing Date (as defined in the Stockholder Purchase Agreement) of the total compensation which Executive would earn if he were allowed to continue service and complete performance of his duties under the Employment Agreement following the Stock Sale exceeds the present value of the maximum compensation Executive may be able to earn by obtaining alternative employment throughout the unexpired term of the Employment Agreement after the Closing Date (as defined in the Stockholder Purchase Agreement). 2. In consideration of and subject to receipt of the payment specified in Paragraph 1 above at the Closing, Executive hereby releases the Company from all damages, liabilities, and claims resulting from termination of Executive's employment with the Company and the Employment Agreement following consummation of the Stock Sale. 3. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without regard to conflicts of law principles. 4. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 5. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 6. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 7. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 8. This Agreement constitutes the entire agreement and understanding of the parties hereto relating to the matters provided for herein and supersedes any and all prior agreements, arrangements, negotiations, discussions and understandings relating to the matters provided for herein. 9. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors, heirs, assigns and representatives. -2- 3 IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above. HEFTEL BROADCASTING CORPORATION By: /s/ CARL PARMER ---------------------------- Name: Carl Parmer -------------------------- Title: President & Co-CEO ------------------------- /s/ CECIL HEFTEL ------------------------------- CECIL HEFTEL -3- 4 The undersigned hereby guarantees the obligations of Heftel Broadcasting Corporation under the attached Settlement Agreement. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------- Name: Mark P. Mays ----------------------- Title: Senior Vice President ---------------------- -4- EX-99.(C)(6) 16 SETTLEMENT AGREEMENT 1 EXHIBIT 99(c)(6) SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (this "Agreement") is made and entered into on June 1, 1996, by and between HEFTEL BROADCASTING CORPORATION, a Delaware corporation (the "Company"), and CARL PARMER ("Executive"), with reference to the following facts. Recitals A. Executive is employed the Company under an Employment Agreement dated as of December 1, 1993, between Executive and the Company (the "Employment Agreement"). B. Executive and Clear Channel Radio, Inc. ("Parent") have entered into a Stockholder Purchase Agreement of even date herewith (the "Stockholder Purchase Agreement") contemplating a sale of the stock of the Company owned by Executive and other parties to Parent (the "Stock Sale"). C. Executive has offered to continue service and to complete his obligations under the Employment Agreement following consummation of the Stock Sale. Parent has rejected that offer and informed Executive that it will cause the Company to terminate his employment with the Company and the Employment Agreement immediately following consummation of the Stock Sale, without cause. D. The parties acknowledge and agree that Executive will suffer substantial damages as a result of such termination in addition to damages which Executive may be able to mitigate by obtaining alternative employment. E. Pursuant to this Agreement, the parties agree to compromise and settle Executive's claim for damages resulting from the Company's repudiation and intended termination of the Employment Agreement and Executive's employment thereunder as provided herein. Agreements The parties agree as follows: 1. In consideration of the release given by Executive in Paragraph 2 below, concurrently with the Closing (as defined in the Stockholder Purchase Agreement), the Company will pay to Executive the sum of $6,941,960 (the "Fixed Amount") plus all amounts payable under the Employment Agreement for services rendered up to the Closing Date, minus all amounts owed to the Company by Executive on the Closing Date by wire transfer of immediately available funds to an account designated by Executive. The parties acknowledge and agree that the Fixed Amount is less than the amount by which the present value as of 2 the Closing Date (as defined in the Stockholder Purchase Agreement) of the total compensation which Executive would earn if he were allowed to continue service and complete performance of his duties under the Employment Agreement following the Stock Sale exceeds the present value of the maximum compensation Executive may be able to earn by obtaining alternative employment throughout the unexpired term of the Employment Agreement after the Closing Date (as defined in the Stockholder Purchase Agreement). 2. In consideration of and subject to receipt of the payment specified in Paragraph 1 above at the Closing, Executive hereby releases the Company from all damages, liabilities, and claims resulting from termination of Executive's employment with the Company and the Employment Agreement following consummation of the Stock Sale. 3. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without regard to conflicts of law principles. 4. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 5. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 6. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 7. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 8. This Agreement constitutes the entire agreement and understanding of the parties hereto relating to the matters provided for herein and supersedes any and all prior agreements, arrangements, negotiations, discussions and understandings relating to the matters provided for herein. 9. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors, heirs, assigns and representatives. -2- 3 IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above. HEFTEL BROADCASTING CORPORATION By: /s/ CECIL HEFTEL ------------------------------- Name: Cecil Heftel -------------------------- Title: Chairman & Co-CEO ------------------------- /s/ CARL PARMER ------------------------------- CARL PARMER -3- 4 The undersigned hereby guarantees the obligations of Heftel Broadcasting Corporation under the attached Settlement Agreement. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------- Name: Mark P. Mays ----------------------- Title: Senior Vice President ---------------------- -4- EX-99.(C)(7) 17 LETTER AGREEMENT DATED MARCH 23, 1995 1 EXHIBIT 99(c)(7) HEFTEL BROADCASTING CORPORATION 6767 West Tropicana Avenue Las Vega, Nevada 89103 (702) 367-3322 May 23, 1995 L. Lowry Mays President and Chief Executive Officer Clear Channel Communications, Inc. 200 Concord Plaza Suite 600 San Antonio, Texas 75216 Dear Lowry: We understand from you that Clear Channel Communications, Inc., a Texas corporation ("Clear Channel") has entered into a letter agreement dated May 16, 1995 (the "GRC-Clear Channel Agreement") with Grupo Radio Centro, A Mexican corporation ("GRC"), to acquire GRC's holdings of Class A shares (such shares are referred to as the "GRC Stockholdings") of Heftel Broadcasting Corporation, a Delaware corporation ("HBC"). The GRC-Clear Channel Agreement provides a number of contingencies to the purchase of the GRC Stockholdings, including without limitation, an agreement between HBC and Clear Channel regarding voting rights and registration rights. This letter is intended to evidence those agreements between HBC and Clear Channel, as follows: 1. Effective Date of Agreement. This Agreement between HBC and Clear Channel shall be effective, if at all, upon the consummation of the transactions contemplated by the GRC-Clear Channel Agreement; provided, however, that this Agreement shall automatically expire on June 15, 1995 if the GRC-Clear Channel Agreement has not then closed in accordance with its terms. In addition, this Agreement shall not be effective unless and until HBC and GRC shall have reached a settlement of certain current disputes between the companies on a basis that provides for release of HBC from any liability to GRC and payment by GRC to HBC at the closing of the GRC-Clear Channel Agreement of two separate amounts totaling at least $1.5 million and $902,397 respectively. HBC agrees to promptly notify Clear Channel when a legally binding agreement evidencing such settlement has been executed by HBC and GRC. 1 2 2. Voting Rights. 2.1 Voting Rights from Cecil Heftel. Cecil Heftel is the chairman of HBC and possesses approximately 70.27 per cent of the voting power in HBC. He is concurrently herewith executing a voting rights agreement in the form attached as Exhibit A in order to evidence his personal agreement that provides to Clear Channel the right to vote shares of HBC as set forth in Exhibit A. 2.2 Recapitalization of HBC. 2.2.1 In the event that -- HBC amends its certificate of incorporation so as to provide for a single class of voting stock, or engages in any other transaction or series of transactions or in any other conduct that -- shall or shall reasonably be anticipated to have the affect of causing the GRC Stockholdings to exceed five percent or more of the voting power in HBC (which the parties believe is the existing attribution standard provided under the rules of the Federal Communications Commission), then -- HBC agrees to create a separate class of nonvoting stock (the "Nonvoting Stock") into which Clear Channel may exchange the GRC Stockholdings so as to avoid such attribution standard. 2.2.2 The rights of such Nonvoting Stock shall be, as practicable as possible, identical to the existing rights of the GBC Stockholdings except that the holding of such Nonvoting Stock shall not cause its holder to exceed said Federal Communications Commission attribution standard. Such Nonvoting Stock shall be created at the same time as the single class of voting stock or other transaction or conduct. HBC further agrees to meet and confer with Clear Channel at least five business days prior to calling for a stockholder vote on any such amendment of its certificate of incorporation or other transaction or conduct. Such Nonvoting Stock shall be immediately convertible at no cost to Clear Channel into voting stock identical to the other voting stock of HBC or such other security into which the voting stock of HBC shall have been converted. 3. Registration Rights and Related Matters. Until January 1, 1996, Clear Channel shall not sell or otherwise dispose of all or any portion of the GRC Stockholdings. From and after January 1, 1996, Clear Channel shall have the following rights related to the GRC Stockholdings: 3.1 Demand Registration. Upon written demand, HBC shall, as soon as reasonably practicable but in any event within 60 days following the receipt of such demand, cause the registration of the GRC Stockholdings under such applicable rules of the Securities and Exchange Commission (and related Blue Sky authorities, if any) as shall be reasonably required to permit Clear Channel to sell its shares to the public in open market transactions free of transfer restrictions and shall bear all costs of such registration; provided, however, that HBC 2 3 shall not be liable to pay (A) any underwriting discounts or commissions attributable to the sale of the GRC Stockholdings, (B) any fees and expenses of counsel of Clear Channel if such counsel is different than counsel for HBC, (C) any direct out-of-pocket expenses of Clear Channel, or (D) other amounts in excess of $50,000 per year (including increased accounting and legal forms) related to such registration. The parties presently contemplate a "shelf" registration under Form S-3. From and after such date as Clear Channel has disposed of three-quarters or more of the GRC Stockholdings, HBC shall no longer have the obligation to maintain the effectiveness of such registration statement for the benefit of Clear Channel for a period of excess of 60 days after such date. 3.2 Piggyback Rights. In addition to the demand registration provided in Section 2.1 above, Clear Channel shall have "piggyback" registration rights in the event that HBC proposes to file a registration statement with the Securities and Exchange Commission covering the sale or other transfer of any securities and HBC shall bear all costs of such registration other than the costs referred to in 3.1 (A) through (C) above. In the event that the managing underwriter for a registered underwritten offering by HBC makes a reasonable and customary determination in writing delivered to HBC and Clear Channel that the inclusion of some or all of the GRC Stockholdings would have an adverse distribution effect on the proposed distribution, then HBC may elect to include in such registration statement such lesser number of the GRC Stockholdings as the managing underwriter shall reasonably determine. 3.3 Limitations. In connection with such demand or piggyback registration, Clear Channel agrees that its rights hereunder shall be subordinated to (a) currently preexisting registration and other written rights of HBC stockholders, (b) reasonable written determination by HBC's investment bankers regarding the adverse distribution affect on underwritten offerings by HBC (as described above), and (c) other restrictions imposed as a matter of law (for example, distributions at a time material information is not publicly available). Subordination pursuant to (b) or (c) above shall have the effect only of permitting HBC to postpone for a reasonable period of time, not to exceed 60 days, its obligation to cause the registration of the GRC Stockholdings under Section 3.1 and Section 3.2 above. 3.4 Further Assurances. HBC hereby agrees to take such actions and execute such documents as shall be reasonably necessary to effectuate the foregoing demand and piggyback registration rights, including without limitation, preparation and filing of amendments and post-effective amendments, supplements to the prospectus or registration statement, qualifying securities with Blue Sky authorities as required (except HBC shall not be required to qualify generally to do business in any jurisdiction, subject itself to general taxation in any jurisdiction, or consent to general service of process in any jurisdiction), entering into customary 3 4 indemnity agreements with underwriters, (subject to appropriate confidentiality agreements) providing financial and other information to Clear Channel and its advisors reasonably deemed sufficient by Clear Channel's counsel to allow Clear Channel to meet its obligations under federal and state securities law, obtaining "cold comfort" letters and consents from its accountants, furnishing legal and other opinions as necessary, and causing the securities to be listed on HBC's regular securities exchange. 3.5 Standstill. Until the date which is two years following the closing of the GRC-Clear Channel Agreement, neither Clear Channel nor any of its affiliates (as such term is defined by the Securities and Exchange Commission) shall acquire additional shares of common stock of HBC which combined with their other holdings shall exceed 35 percent of the economic interest in HBC nor an interest in debt issued by HBC without the written consent of HBC, which consent may be withheld in the sole discretion of HBC. 3.6 Disclosure. Clear Channel understands and agrees that -- HBC is not the seller of the GRC Stockholdings and accordingly is not responsible to Clear Channel in connection with any dispute Clear Channel may have with GRC, -- Clear Channel is relying on its own investigation and due diligence in connection with its investment in HBC and not on any representation and warranty being made by HBC except those contained in the documents filed publicly by HBC with the Securities and Exchange Commission, -- HBC is not making any representations or warranties to Clear Channel in connection with the GRC transaction except as expressly stated in this Agreement, and -- HBC has disclosed to Clear Channel certain negotiations and disputes with Mambisa Broadcasting Corporation and its affiliates. 4. Miscellaneous. 4.1 Notices. Any notice or other communication contemplated or required hereunder shall be in writing and shall be effective upon receipt or five days after deposit in the United States mail, return receipt requested, postage prepaid, addressed as follows: If to HBC: H. Carl Parmer President and Co-Chief Executive Officer Heftel Broadcasting Corporation 6767 West Tropicana Avenue Las Vegas, Nevada 89103 If to Clear Channel: L. Lowry Mays President and Chief Executive Officer Clear Channel Communications, Inc. 200 Concord Plaza Suite 600 4 5 San Antonio, Texas 78216 With a copy to: Kenneth E. Wyker, Esq. Vice President Legal Affairs Clear Channel Communications, Inc. 200 Concord Plaza Suite 600 San Antonio, Texas 78216 With a copy to: William F. Cappa, Esq. Jeffer, Mangels, Butler & Marmaro 2121 Avenue of the Stars Los Angeles, California 90067 4.2 Governing Law; Dispute Resolution. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be wholly executed in such state. Disputes arising under this Agreement shall be subject to binding arbitration in San Antonio, Texas in accordance with the commercial rules of the American Arbitration Association and judgment upon the arbitrator(s) award (which shall include reasonable attorneys' fees and costs to the prevailing party but shall not include exemplary, punitive or extra-contract damages) may be entered in any court of competent jurisdiction. 4.3 Entire Agreement. This Agreement is the entire agreement between the parties hereto relating to the subject hereof and may not be amended, supplemented or varied except in a writing executed by the party to be bound. Each person signing this document on behalf of another party represents and warrants that he has the authority to do so and that his signature legally binds such other party. This Agreement is not assignable or transferable. Please return a copy of this agreement executed where indicated below in order to evidence your agreement to the foregoing. Sincerely, HEFTEL BROADCASTING CORPORATION By: /s/ CARL PARMER ----------------------------------- Name: Carl Parmer Title: President /s/ CECIL HEFTEL --------------------------------------- Cecil Heftel, as to the proxy provisions of Section 2.1 above 5 6 The foregoing is accepted and agreed. Date: May 24, 1995 CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ L. LOWRY MAYS -------------------------------------- Name: L. Lowry Mays Title: President, Chief Executive Officer 6 EX-99.(C)(8) 18 VOTING RIGHTS AGREEMENT 1 EXHIBIT 99(c)8 VOTING RIGHTS AGREEMENT This voting rights agreement is executed in accordance with that certain letter agreement dated May 23, 1995 by and between Clear Channel Communications, Inc., a Texas corporation ("Clear Channel"), and Heftel Broadcasting Corporation, a Delaware corporation ("HBC"). The undersigned hereby agrees to vote shares of HBC stock covering 16 per cent of the present voting power in HBC on a fully diluted basis in accordance with the written instructions of Clear Channel Communications, Inc., a Texas corporation ("Clear Channel"). "Fully diluted basis" shall mean calculating outstanding shares as if all warrants and options to acquire shares have been exercised (whether or not such warrants and options are then exercisable). Except as described below, this agreement may be effective for a period greater than three years and shall be deemed coupled with an interest and, accordingly, irrevocable. The parties agree that, in the event HBC shall issue voting shares not included in the foregoing calculation, the undersigned shall increase the number of shares covered by this agreement to such number as shall maintain Clear Channel's 20 percent voting power in HBC; provided, however, that the undersigned shall not have such obligations if HBC shall have offered to sell to Clear Channel a portion of such voting shares that would maintain its voting power at 20 percent and Clear Channel shall have failed and refused to purchase such shares on the same terms and conditions as other offerees of such voting shares. From and after such time as Clear Channel has less than 20 percent of the economic interest in HBC, however acquired, undersigned shall no longer have the obligation to provide such right to Clear Channel. Such voting rights shall be exercised by a written notice sent to the undersigned at the principal offices of HBC no later than five business days prior to the date Clear Channel intends to exercise the right. This agreement shall bind the heirs and successors of the undersigned. This agreement is not assignable or transferrable. IN WITNESS WHEREOF, the undersigned has executed this voting rights agreement as of this 23rd day of May, 1995. /s/ CECIL HEFTEL --------------------------------- Cecil Heftel (attach notarial acknowledgment) [Notarial Acknowledgement] EX-99.(C)(9) 19 AMENDMENT NO. 1 TO TENDER OFFER 1 EXHIBIT 99(C)(9) AMENDMENT NO. 1 TO TENDER OFFER AGREEMENT The Tender Offer Agreement dated June 1, 1996 between Clear Channel Radio, Inc., a Nevada corporation, and Heftel Broadcasting Corporation, a Delaware corporation, is hereby amended as follows: 1. Section 1.5 is deleted in its entirety and replaced by the following new Section 1.5: "1.5 Stock Options and Warrants. The options to purchase Class A Common Stock of the Company and warrants to purchase Class B Common Stock of the Company listed on Schedule 1.5 attached hereto (collectively, "Convertible Securities" and, individually, a "Convertible Security"), if not exercised before the Closing Date, and upon condition that Parent receives any consent of the security holder necessary to accelerate the vesting and exercisability of his or her Convertible Security and cause the exercise thereof (the "Holder Consent"), will be deemed exercised on the Closing Date and the shares underlying such Convertible Securities will be deemed to have been tendered in the Offer and accepted by Parent. In settlement of the tender of the shares subject to such Convertible Securities, on the Closing Date Parent shall pay to the Company an amount equal to the aggregate of the exercise prices of the Convertible Securities so exercised and to each holder of any such Convertible Security an amount equal to (x) the product of (i) the Offer Price minus the exercise price per share of the Convertible Security and (ii) the total number of shares of Company Common for which such Convertible Security has been exercised and which have been purchased by Parent on the Closing Date less (y) any federal, state, local or foreign taxes required to be withheld from such payment. The Board of Directors of the Company (or, if appropriate, any committee thereof) shall adopt such resolutions or take such other actions as are necessary, subject to obtaining any applicable security holder consent, to implement the terms and conditions of the prior sentence, including, without limitation, accelerating the vesting and exercisability of all Convertible Securities to the Closing Date; provided, however, that the vesting and exercisability of a Convertible Security shall not be accelerated if the holder thereof does not deliver the Holder Consent at or before the expiration of the Offer." 2. Section 5.2 is deleted in its entirety and replaced by the following new Section 5.2: "5.2 Fees and Expenses. All costs and expenses incurred in connection with the Offer and this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses; provided, however, that, if the Closing occurs, Parent hereby guarantees that the Company shall have sufficient funds to pay all fees and costs payable to the investment bankers set forth on Schedule 3.4 attached hereto. Without limiting the foregoing, Parent hereby agrees to loan the Company funds to pay such fees and costs if the Company does not have sufficient cash." 3. Section 4.1(b)(xv) is amended by deleting the reference to "Section 4.4(h)" and replacing it with "Section 4.1(h)". 4. Section 5.4 is amended by deleting the reference to "Article 8" and replacing it with "Article 6". 5. Section 5.7 is deleted in its entirety and replaced by the following new Section 5.7: "5.7 Convertible Securities. The Company and the Company Subsidiaries shall take such action as may be permitted under the Company's Stock Option Plan and/or the terms of the Convertible Securities to accelerate the vesting of the right to purchase all shares of Class A Common Stock subject to options included in the Convertible Securities on the Closing Date and shall comply with all requirements regarding income tax withholding in connection therewith. In addition to the foregoing, the Company will use its best efforts to obtain the Holder Consents referred to in Section 1. 5 and to provide Parent with such other evidence requested by Parent that no holder of any Convertible Security will have any right to acquire any equity interest in the Company, Parent or any of their respective subsidiaries as a result of the exercise or conversion of any Convertible Security or other rights after the Closing Date." 6. Clause (ii) of Section 8.2 is amended by deleting "(y)" immediately after "or" and immediately before "Parent" and replacing it with "(2)". 7. Parent hereby waives the provision which requires the Company to file a Schedule 14D-9 on the date of commencement of the Offer, and the Company hereby waives the provision which requires Parent to include the Schedule 14D-9 in its Offer Documents. 8. Except as amended hereby, the Tender Offer Agreement is not changed and is in full force and effect. 2 IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be executed as of the 6th day of June 1996 by its officer thereunto duly authorized. CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS ---------------------------------------- Name: Mark P. Mays Title: Senior Vice President HEFTEL BROADCASTING CORPORATION By: /s/ JOHN KENDRICK ---------------------------------------- Name: John Kendrick Title: Senior Vice President and Chief Financial Officer EX-99.(C)(10) 20 LETTER AGREEMENTS DATED JUNE 6, 1996 1 EXHIBIT 99(c)(10) I hereby consent to the treatment of the options to purchase Class A Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant to purchase Class B Common Stock of the Company set forth in the Tender Offer Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc. as amended by Amendment No. 1 dated June 6, 1996. Dated: June 6, 1996 /s/ CECIL HEFTEL ------------------------------- Cecil Heftel I hereby consent to the treatment of the options to purchase Class A Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant to purchase Class B Common Stock of the Company set forth in the Tender Offer Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc. as amended by Amendment No. 1 dated June 6, 1996. Dated: June 6, 1996 /s/ CARL PARMER ------------------------------- Carl Parmer I hereby consent to the treatment of the options to purchase Class A Common Stock of Heftel Broadcasting Corporation (the "Company") and a warrant to purchase Class B Common Stock of the Company set forth in the Tender Offer Agreement dated June 1, 1996, between the Company and Clear Channel Radio, Inc. as amended by Amendment No. 1 dated June 6, 1996. Dated: June 6, 1996 /s/ RICHARD HEFTEL ------------------------------- Richard Heftel EX-99.(C)(11) 21 AGREEMENT TO FILE JOINT SCHEDULE 13D 1 EXHIBIT 99(c)(11) AGREEMENT TO FILE JOINT STATEMENT ON SCHEDULE 13D The parties hereto agree as follows: Pursuant to Rule 13d-1(f)(1) of Regulation 13D-G promulgated by the Securities and Exchange Commission, Clear Channel Communications, Inc. ("Clear Channel") and Clear Channel Radio, Inc. ("Radio" and together with Clear Channel, the "Reporting Persons") hereby agree to file jointly with the Securities and Exchange Commission, the Statement on Schedule 13D to which this Agreement is attached as an exhibit. Each of the Reporting Persons further agrees to file jointly with the other Reporting Person any and all amendments to said Statement on Schedule 13D as they may deem necessary or appropriate, unless and until such time as it shall notify the other Reporting Person in writing of its desire to terminate this agreement. DATE: June 6, 1996 SIGNED: CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/MARK P. MAYS ------------------------------------ Name: Mark P. Mays ---------------------------------- Title: Senior Vice President/Operations ---------------------------------- SIGNED: CLEAR CHANNEL RADIO, INC. By: /s/MARK P. MAYS ------------------------------------ Name: Mark P. Mays ----------------------------------- Title: Senior Vice President/Operations EX-99.(C)(12) 22 CONFIDENTIALITY LETTER AGREEMENT 1 EXHIBIT 99(c)(12) May 31, 1996 PERSONAL AND CONFIDENTIAL Clear Channel Radio, Inc. 200 Concord Plaza Suite 600 San Antonio, Texas 78216 Ladies and Gentlemen: In connection with your consideration of a possible transaction with Heftel Broadcasting Corporation, you have requested certain financial and other public and non-public information concerning Heftel Broadcasting Corporation and/or its subsidiaries (collectively, the "Company"). As a condition to your being furnished such information, you agree to treat any information concerning the Company (whether prepared by the Company, its advisors, or otherwise) that is furnished to you by or on behalf of the Company (herein collectively referred to as the "Evaluation Material") in accordance with the provisions of this agreement and to take or abstain from taking certain other actions herein set forth. The term "Evaluation Material" does not include information that (i) is already in your possession, provided that you do not have reason to know that such information is subject to another confidentiality agreement with or other obligation of secrecy to the Company or another party, or (ii) becomes generally available to the public other than as a result of a disclosure by you or your directors, officers, partners, employees, agents, advisors or representatives (collectively, the "Representatives") or (iii) has been independently acquired or developed by you or your Representatives without violating your obligations under this agreement. You hereby agree that the Evaluation Material will be used solely for the purpose of evaluating a possible transaction between the Company and you, and that such information will be kept confidential by you, except that (i) any of such information may be disclosed to your Representatives who have a bona fide need to know such information for the purpose of evaluating any such possible transaction between the Company and you (on the condition that you inform such Representatives of the confidential nature of such information and direct them to treat such information confidentially), and (ii) any disclosure of such information may be made to which the Company consents in writing. In any event, you shall be responsible for any breach of this agreement by any of your Representatives and you agree, at your sole expense, to take all reasonable measures (including but not limited to court proceedings) to restrain your Representatives from prohibited or unauthorized disclosure or use of the Evaluation Material. In addition, without the prior written consent of the Company, unless, upon receipt of an opinion of counsel, such disclosure is required by law or by your exchange listing agreement you will not, and you will direct your Representatives not to, disclose to any person either the fact that discussions or negotiations are taking place concerning a possible transaction between the Company and you or any of the terms, conditions or other facts with respect to any such possible transaction, including the status thereof. In the event you are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or other process) to disclose any Evaluation Material, it is agreed that you will provide the Company with prompt notice of any such request or requirement (written if practical) so that the Company may seek an appropriate protective order or waive your compliance with the provisions of this agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder, you are, in the opinion of your counsel, compelled to disclose Evaluation Material, you may disclose that portion of the Evaluation Material, that your counsel advises that you are compelled to disclose and you agree to exercise reasonable efforts to obtain assurance that confidential treatment will be accorded to that portion of the Evaluation Material which is being disclosed. In any event, you will not oppose action by the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded that Evaluation Material. Until two years from the date of this agreement, you agree that none of your officers, directors, employees or other Representatives who had access to Evaluation Material will, directly or indirectly, initiate or maintain contact (except for those contacts made in the ordinary course of business) with any officer, director, employee or agent of the Company, except with the express prior written permission of the Company, or solicit or cause to be solicited, based on use of the Evaluation Materials, the employment of any director, officer or employee of the Company or of any of its subsidiaries (whether employed by the Company or its subsidiaries prior to, during or following such period). It is understood that all (i) communications regarding any proposed transaction, (ii) requests for additional information, (iii) requests for facility tours or meetings with the Company's employees or lenders and (iv) discussions or questions regarding procedures, will be submitted or directed to Bruce P. Jeffer, Esq. of Jeffer, Mangels, Butler & Marmaro LLP, counsel for the Company. Although the Company has endeavored to include in the Evaluation Material information known to it that it believes to be relevant for the purpose of your investigation, you understand that neither the Company nor any of its representatives or advisors has made or makes any representation or warranty as to the accuracy or completeness of the Evaluation Material. You agree that neither the Company nor its representatives or advisors shall have any liability to you or any of your representatives or advisors resulting from the use of the Evaluation Material. 2 Clear Channel Radio, Inc. May 31, 1996 All Evaluation Material is and shall remain the property of the Company. If you are requested in writing by the Company to do so, you shall promptly redeliver to the Company all written Evaluation Material and will not retain any copies, extracts, or other reproductions in whole or in part of such written material. All documents, memoranda, notes, and other writings whatsoever prepared by you or your Representatives based on the information in the Evaluation Material shall be destroyed, and such destruction shall be certified in writing to the Company by an authorized officer supervising such destruction. You agree that unless and until a definitive agreement between the Company and you with respect to any transaction referred to in the first paragraph of this agreement has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of this or any written or oral expression with respect to such a transaction by any of its Representatives, except, in the case of this agreement, for the matters specifically agreed to herein. You further acknowledge and agree that (i) the Company shall be free to negotiate with any prospective party and enter into a definitive agreement without prior notice to you or to any other person, (ii) the Company may establish procedures relating to a sale of the Company and to change those procedures at any time without notice to you or any other person, (iii) you shall not have any claims whatsoever against the Company, its investment banker, or any of their respective directors, officers, stockholders, employees, owners, partners, affiliates, representatives, advisors, or agents arising out of or relating to a sale of the Company (other than those as may be brought against the parties to a definitive agreement, should such an agreement be entered into by you, in accordance with the terms thereof), (iv) the Company reserves the right, in its sole discretion, to reject any and all proposals made by you or any of your Representatives with regard to a transaction between the Company and you, and to terminate discussions and negotiations with you or any or all other prospective buyers at any time, and (v) the Company reserves the right to refrain from providing information to you even if it has provided such information to any other person. The terms set forth in this agreement may be modified or waived only by a separate writing by the Company and you expressly so modifying or waiving such terms. Your obligations under this agreement shall expire two years from the date hereof, except as otherwise specifically stated herein. This agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to the conflict of laws provisions thereof. Should any party hereto institute any action or proceeding at law or in equity to enforce any provision of this agreement, including an action for declaratory relief, or for damages by reason of an alleged breach of any provision of this agreement, or otherwise in connection with this agreement, or any provision hereof, the prevailing party shall be entitled to recover from the losing party or parties reasonable attorneys' fees and costs for services rendered to the prevailing party in such action or proceeding. No consequential or incidental damages will be available for any breach of this Agreement. This agreement constitutes the entire agreement and understanding of the parties hereto relating to the matters provided for herein and supersede any and all prior agreements, arrangements, negotiations, discussions and understandings relating to the matters provided for herein. Very truly yours, HEFTEL BROADCASTING CORPORATION By: /s/ CARL PARMER ------------------------------- Name: Carl Parmer ----------------------------- Title: President ---------------------------- Confirmed and Agreed to: CLEAR CHANNEL RADIO, INC. By: /s/ MARK P. MAYS --------------------------------------- Name: Mark P. Mays ------------------------------------- Title: Senior Vice President ------------------------------------ Page 2 -----END PRIVACY-ENHANCED MESSAGE-----