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EXHIBIT 10.33
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June
17, 1997, is made by and among GulfStar Communications, Inc., a Delaware
corporation ("Gulfstar"), Capstar Broadcasting Corporation, a Delaware
corporation ("Capstar"), CBC-GulfStar Merger Sub, Inc., a Delaware corporation
and a wholly owned subsidiary of Capstar ("Sub"), and each of the persons
listed on Schedule I (the "Gulfstar Securityholders"). Gulfstar and Sub are
hereinafter collectively referred to as the "Constituent Corporations".
PRELIMINARY STATEMENTS
A. Each Gulfstar Securityholder identified on Schedule II
(collectively, the "Gulfstar Stockholders") owns the number of shares of
Gulfstar Capital Stock (hereinafter defined) set forth opposite such Gulfstar
Stockholder's name on Schedule II. Each Gulfstar Securityholder identified on
Schedule III (collectively, the "Gulfstar Option Holders") holds options to
purchase the number of shares of Gulfstar Common Stock (hereinafter defined)
set forth opposite such Gulfstar Option Holder's name on Schedule III.
B. The respective Boards of Directors of Gulfstar and Sub have
approved the merger of Gulfstar with and into Sub, with Sub being the surviving
corporation (the "Merger"). The respective Boards of Directors of Capstar,
Gulfstar and Sub have determined that it is in the best interests of their
respective stockholders for the Merger to be effected upon the terms and
subject to the conditions set forth in this Agreement.
C. For federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement
is intended to be and is adopted as a plan of reorganization within the meaning
of Treasury Regulation Section 1.368-1(c).
D. In connection with the Merger, Gulfstar, Capstar, Sub and the
Gulfstar Securityholders desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
AGREEMENTS
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as follows:
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ARTICLE I.
CERTAIN DEFINED TERMS
As used in this Agreement, the following terms have the meanings set
forth below:
"Aggregate Preferred Merger Consideration" means an amount of cash
equal to the product obtained when the Preferred Merger Consideration is
multiplied by the number of shares of Gulfstar Preferred Stock issued and
outstanding immediately prior to the Effective Time.
"BT" means BT Capital Partners, Inc.
"BT Exercise Price" means an amount equal to $80.98.
"BT Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of July 25, 1996 between Gulfstar and BT.
"BT Warrant" means the Stock Purchase Warrant issued on July 25, 1996
by Gulfstar to BT, pursuant to which BT was granted the right, under certain
circumstances, to purchase the BT Warrant Shares.
"BT Warrant Shares" means 8,098 shares of Gulfstar Class B Common
Stock which may be issued by Gulfstar to BT at the Closing pursuant to the
terms of the BT Warrant and Section 4.2 of this Agreement.
"Class A Common Stock" means the Class A Voting Common Stock, par
value $0.01 per share, of Capstar.
"Class B Common Stock" means the Class B Nonvoting Common Stock, par
value $0.01 per share, of Capstar.
"Class C Common Stock" means the Class C Voting Common Stock, par
value $0.01 per share, of Capstar.
"Common Stock" means the collective reference to the Class A Common
Stock, Class B Common Stock and Class C Common Stock.
"Conversion Number" means 1,187.947.
"Effective Time" has the meaning set forth in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Gulfstar Capital Stock" means the collective reference to Gulfstar
Common Stock, Gulfstar Class A Common Stock, Gulfstar Class B Common Stock,
Gulfstar Class C Common Stock and Gulfstar Preferred Stock.
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"Gulfstar Certificate of Designation" means the Gulfstar
Communications, Inc. Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of 12% Redeemable
Preferred Stock and Qualifications, Limitations and Restrictions Thereof filed
by Gulfstar with the Delaware Secretary of State.
"Gulfstar Class A Common Stock" means the Class A Nonvoting Common
Stock, par value $0.01 per share, of Gulfstar.
"Gulfstar Class B Common Stock" means the Class B Nonvoting Common
Stock, par value $0.01 per share, of Gulfstar.
"Gulfstar Class C Common Stock" means the Class C Voting Common Stock,
par value $0.01 per share, of Gulfstar.
"Gulfstar Common Stock" means the Common Stock, par value $0.01 per
share, of Gulfstar.
"Gulfstar Common Stock Equivalents" means, without duplication with
any other Gulfstar Common Stock or Gulfstar Common Stock Equivalents, any
rights, warrants, options, convertible securities or indebtedness, exchangeable
securities or indebtedness, or other rights, exercisable for or convertible or
exchangeable into, directly or indirectly, Gulfstar Common Stock or securities
exercisable for or convertible or exchangeable into Gulfstar Common Stock,
whether at the time of issuance or upon the passage of time or the occurrence
of some future event.
"Gulfstar Preferred Stock" means the 12% Redeemable Preferred Stock,
par value $0.01 per share, of Gulfstar.
"Gulfstar Stock" means Gulfstar Class A Common Stock, Gulfstar Class B
Common Stock, Gulfstar Class C Common Stock, and Gulfstar Common Stock.
"Gulfstar Stock Option" has the meaning set forth in Section 3.1(h).
"Material Adverse Effect" means, with respect to any Person, the
occurrence of any event, condition, circumstance or fact that has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations, properties, conditions, results of operations, assets or
liabilities of such Person and its Subsidiaries, if any, taken as a whole.
"Merger" has the meaning set forth in the first Preliminary Statement
of this Agreement.
"Person" or "person" means any individual, corporation, limited
liability company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section 13(d)(3) of
the Exchange Act), trust, association or other legal entity or government,
political subdivision, agency or instrumentality of a government.
"Preferred Merger Consideration" shall mean an amount of cash equal to
the liquidation preference (including accumulated dividends) that would be
payable with respect to one share of Gulfstar Preferred Stock if a liquidation,
dissolution or winding-up of Gulfstar's affairs were deemed
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to occur immediately prior to the Effective Time, as determined pursuant to
Section (d) of the Gulfstar Certificate of Designation.
"Subsidiary" means, with respect to any Person, any corporation or
other organization, whether incorporated or unincorporated, of which: (i) such
Person or any other Subsidiary of such Person is a general partner; or (ii) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is, directly or indirectly, owned or controlled by such Person or
by any one or more of such Person's Subsidiaries.
"Voting Debt," with respect to any Person, means any bonds,
debentures, notes or other indebtedness issued or outstanding having the right
to vote on any matters on which holders of capital stock of such Person may
vote.
ARTICLE II.
THE MERGER; CLOSING; OTHER ACTIONS TO BE TAKEN AT THE CLOSING
Section 2.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time Gulfstar shall be merged with and into Sub in
accordance with the applicable provisions of the Delaware General Corporation
Law (the "DGCL"). As soon as practicable at or after the closing of the Merger
(the "Closing"), a certificate of merger, prepared and executed in accordance
with the relevant provisions of the DGCL (the "Certificate of Merger"), shall
be filed with the Delaware Secretary of State. The Merger shall become
effective at such time as is provided in the Certificate of Merger, which time
shall be on the date of Closing (the "Effective Time").
Section 2.2 Closing. The Closing shall take place at 10:00 a.m.
on a date to be specified by the parties, which shall be no later than the
fifth business day after satisfaction (or waiver in accordance with this
Agreement) of the latest to occur of the conditions set forth in Article VI
(the "Closing Date"), at the offices of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, unless another date or place is agreed
to by Capstar and Gulfstar.
Section 2.3 Effects of the Merger.
(a) At the Effective Time:
(i) Gulfstar shall be merged with and into Sub,
the separate existence of Gulfstar shall cease and Sub shall continue
as the surviving corporation (for periods occurring after the
Effective Time, Sub is sometimes referred to herein as the "Surviving
Corporation");
(ii) the Certificate of Incorporation of Sub as in
effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of Surviving Corporation except that the
Certificate of Merger shall amend and restate Article First of the
Certificate of Incorporation of Sub to read in its entirety as
follows:
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"FIRST: The name of the corporation is GulfStar
Communications, Inc.; and
(iii) the Bylaws of Sub as in effect immediately
prior to the Effective Time shall be the Bylaws of Surviving
Corporation.
(b) The directors and officers of Sub at the Effective
Time shall, from and after the Effective Time, be the initial directors and
officers, respectively, of Surviving Corporation, and such directors and
officers shall serve until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in
accordance with Surviving Corporation's Certificate of Incorporation and
Bylaws.
Section 2.4 Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under any
of the rights, properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger, or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Constituent
Corporations, or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE III.
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 Effect of Merger on Capital Stock. At the Effective
Time, by virtue of the Merger and without any further action on the part of any
holder of any shares of Gulfstar Capital Stock or any shares of capital stock
of Sub:
(a) Capital Stock of Sub. Each issued and outstanding
share of the capital stock of Sub shall not be converted or otherwise
affected by the Merger and shall remain outstanding after the Merger
as one fully paid and nonassessable share of common stock, par value
$0.01 per share, of Surviving Corporation.
(b) Cancellation of Gulfstar Treasury Stock and
Capstar-Owned Gulfstar Stock. Each share of Gulfstar Capital Stock
that is owned by Gulfstar as treasury stock and any shares of Gulfstar
Capital Stock owned by Capstar, Sub or any other wholly owned
Subsidiary of Gulfstar or Capstar shall be canceled and retired and
shall cease to exist and no stock of Capstar or Surviving Corporation
or other consideration shall be delivered or deliverable in exchange
therefor.
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(c) Gulfstar Common Stock. Subject to the provisions of
Section 3.2(e) hereof, each share of Gulfstar Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares
to be canceled in accordance with Section 3.1(b)) shall be converted
into the right to receive a number of shares of Class A Common Stock
equal to the Conversion Number. All such shares of Gulfstar Common
Stock, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the shares of Class A Common Stock to be issued in consideration
therefor upon the surrender of such certificate in accordance with
Section 3.2, without interest.
(d) Gulfstar Class A Common Stock. Subject to the
provisions of Section 3.2(e) hereof:
(i) each share of Gulfstar Class A Common Stock
issued, outstanding and held by either of Xxxxxx X. Xxxxx or
R. Xxxxxx Xxxxx immediately prior to the Effective Time shall
be converted into the right to receive a number of shares of
Class C Common Stock equal to the Conversion Number. All such
shares of Gulfstar Class A Common Stock, when so converted,
shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to
receive the shares of Class C Common Stock to be issued in
consideration therefor upon surrender of such certificate in
accordance with Section 3.2, without interest; and
(ii) each share of Gulfstar Class A Common Stock
issued, outstanding and held by any Person other than Xxxxxx
X. Xxxxx or R. Xxxxxx Xxxxx immediately prior to the Effective
Time (other than shares to be canceled in accordance with
Section 3.1(b)) shall be converted into the right to receive a
number of shares of Class A Common Stock equal to the
Conversion Number. All such shares of Gulfstar Class A Common
Stock, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto,
except the right to receive the shares of Class A Common Stock
to be issued in consideration therefor upon the surrender of
such certificate in accordance with Section 3.2, without
interest.
(e) Gulfstar Class B Common Stock. Subject to the
provisions of Section 3.2(e) hereof, each share of Gulfstar Class B
Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares to be canceled in accordance with Section
3.1(b)) shall be converted into the right to receive a number of
shares of Class B Common Stock equal to the Conversion Number. All
such shares of Gulfstar Class B Common Stock, when so converted, shall
no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the shares of
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Class B Common Stock to be issued in consideration therefor upon the
surrender of such certificate in accordance with Section 3.2, without
interest.
(f) Gulfstar Class C Common Stock. Subject to the
provisions of Section 3.2(e) hereof:
(i) each share of Gulfstar Class C Common Stock
issued, outstanding and held by either of Xxxxxx X. Xxxxx or
R. Xxxxxx Xxxxx immediately prior to the Effective Time shall
be converted into the right to receive a number of shares of
Class C Common Stock equal to the Conversion Number. All such
shares of Gulfstar Class C Common Stock, when so converted,
shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to
receive the shares of Class C Common Stock to be issued in
consideration therefor upon surrender of such certificate in
accordance with Section 3.2, without interest; and
(ii) each share of Gulfstar Class C Common Stock
issued, outstanding and held by any Person other than Xxxxxx
X. Xxxxx or R. Xxxxxx Xxxxx immediately prior to the Effective
Time (other than shares to be canceled in accordance with
Section 3.1(b)) shall be converted into the right to receive a
number of shares of Class A Common Stock equal to the
Conversion Number. All such shares of Gulfstar Class C Common
Stock, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto,
except the right to receive the shares of Class A Common Stock
to be issued in consideration therefor upon the surrender of
such certificate in accordance with Section 3.2, without
interest.
(g) Gulfstar Preferred Stock. Each share of Gulfstar
Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with
Section 3.1(b)) shall be converted into the right to receive an amount
equal to the Preferred Merger Consideration. All such shares of
Gulfstar Preferred Stock, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the
right to receive the Preferred Merger Consideration to be paid in
consideration therefor upon the surrender of such certificate in
accordance with Section 3.2.
(h) Stock Options. At the Effective Time, (i) each
outstanding option to purchase Gulfstar Common Stock referenced on
Schedule III (the "Gulfstar Stock Options"), whether vested or
unvested, shall be assumed by Capstar. Each such option shall be
deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Gulfstar Stock Option, a
number of shares of Class A Common Stock equal to the number of shares
of Gulfstar Common Stock purchasable pursuant to such Gulfstar Stock
Option multiplied by the Conversion Number, at a price per share equal
to the per-share
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exercise price for the shares of Gulfstar Common Stock purchasable
pursuant to such Gulfstar Stock Option divided by the Conversion
Number; provided, however, that in the case of any option to which
Section 421 of the Code applies by reason of its qualification under
any of Sections 422-424 of the Code, the option price, the number of
shares purchasable pursuant to such option and the terms and
conditions of exercise of such option shall be determined in order to
comply with Section 424(a) of the Code; and provided further, that,
unless otherwise provided in the applicable Gulfstar Stock Option, the
number of shares of Class A Common Stock that may be purchased upon
exercise of such Gulfstar Stock Option shall not include any
fractional share; and (ii) Capstar shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Class A Common Stock for delivery upon exercise of the Gulfstar Stock
Options assumed in accordance with this Section 3.1(h).
(i) No Additional Rights. Except as set forth in
Sections 3.1(h) and 4.2 or as otherwise agreed to by the parties, (i)
the provisions of any plan, program, undertaking, agreement or
arrangement providing for the issuance or grant of any other interest
in respect of Gulfstar Capital Stock shall become null and void, and
(ii) Gulfstar, Sub, Capstar and, from and after the Effective Time,
Surviving Corporation, shall use their respective best efforts to
ensure that, following the Effective Time, no holder of Gulfstar
Common Stock Equivalents or any participant in any plan, program or
arrangement shall have any right thereunder to acquire any equity
securities of Gulfstar, Sub, Capstar or any direct or indirect
Subsidiary thereof.
Section 3.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Surviving
Corporation shall hold, for the benefit of the holders of shares Gulfstar
Capital Stock, the Aggregate Preferred Merger Consideration payable and
certificates representing the shares of Common Stock issuable at the Effective
Time pursuant to Section 3.1 in exchange for outstanding shares of Gulfstar
Capital Stock (the Aggregate Preferred Merger Consideration and such shares of
Common Stock, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "Exchange Fund"). Surviving
Corporation shall deliver the Aggregate Preferred Merger Consideration and the
Common Stock contemplated to be issued pursuant to Section 3.1 out of the
Exchange Fund. The Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. Delivery of each certificate
which, immediately prior to the Effective Time, represented outstanding shares
of Gulfstar Capital Stock (each, a "Certificate"), shall be effected, and risk
of loss and title to such Certificate shall pass, only upon surrender of the
Certificate to Surviving Corporation for cancellation. Upon surrender of a
Certificate for cancellation to Surviving Corporation, or to such other agent
or agents as may be appointed by Surviving Corporation, together with any other
documents of transfer reasonably required by Surviving Corporation, (1) the
holder of the Certificate shall be entitled to receive, as applicable, either
the Preferred Merger Consideration or a certificate representing that number of
whole shares of Common Stock which such holder has the right to receive
pursuant to the provisions of this Article III, and any unpaid dividends and
distributions that such holder has the right to receive pursuant to Section
3.2(c); and (2) the Certificate so surrendered shall forthwith be canceled. In
the
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event of a transfer of ownership of Gulfstar Stock which is not registered in
the transfer records of Gulfstar, a certificate representing the appropriate
number of whole shares of Common Stock may be issued to a transferee if the
Certificate representing such Gulfstar Stock is presented to Surviving
Corporation accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid. If any shares of Gulfstar Stock have been pledged to Gulfstar by the
holder thereof to secure the repayment by such holder of any obligation owed to
Gulfstar, a certificate representing the appropriate number of whole shares of
Common Stock may be issued if the Certificate representing such pledged shares
of Gulfstar Stock is presented to the Surviving Corporation accompanied by all
documents which the Surviving Company requires to evidence the Surviving
Corporation's continued security interest in the shares of Common Stock to be
issued in exchange for such Gulfstar Stock, and the Certificate so issued shall
be pledged to the Surviving Corporation. Until surrendered as contemplated by
this Section 3.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender, as
applicable, the Preferred Merger Consideration or a certificate representing
whole shares of Common Stock (and any unpaid dividends and distributions that
such holder has the right to receive pursuant to Section 3.2(c)). Surviving
Corporation shall not be entitled to vote or exercise any rights of ownership
with respect to the Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of persons entitled thereto.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Common Stock declared or made
after the Effective Time with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of Common Stock the right to receive which is represented thereby until the
holder of such Certificate surrenders such Certificate. Subject to the effect
of applicable laws, following surrender of any such Certificate, there shall be
paid to the holder thereof, without interest: (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Common Stock; and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such whole shares of Common Stock.
(d) No Further Ownership Rights. The Preferred Merger
Consideration to be paid, and all shares of Common Stock to be issued, upon the
surrender for exchange of Certificates representing shares of Gulfstar Capital
Stock, as applicable, in accordance with the terms hereof shall be deemed to
have been paid or issued, as the case may be, in full satisfaction of all
rights pertaining to such shares of Gulfstar Capital Stock, subject to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the date hereof and which remain
unpaid at the Effective Time. From and after the Effective Time there shall be
no further registration of transfers on the stock transfer books of Surviving
Corporation of the shares of Gulfstar Capital Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Surviving Corporation for any reason, they shall
be canceled and exchanged as provided in this Article III.
(e) No Fractional Shares. No certificates or scrip
representing fractional shares of Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this
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Article III, and no dividend or other distribution, stock split, interest or
other right shall relate to any such fractional security, and such fractional
interests shall not entitle the owner thereof to vote or to any rights of a
security holder of Surviving Corporation or Capstar.
(f) No Liability. None of Capstar, Sub, Gulfstar or
Surviving Corporation shall be liable to any holder of shares of Gulfstar
Capital Stock for such portion of the Aggregate Gulfstar Preferred Merger
Consideration or such shares of Common Stock (or dividends or distributions
with respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. Any amounts remaining unclaimed by
holders of any such shares at such date as is immediately prior to the time at
which such amounts would otherwise escheat to or become property of any
governmental entity shall, to the extent permitted by applicable law, become
the property of Surviving Corporation, free and clear of any claims or interest
of any such holders or their successors, assigns or personal representatives
previously entitled thereto.
(g) Lost, Stolen, or Destroyed Certificates. If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Surviving Corporation, the posting by
such person of a bond in such reasonable amount as Surviving Corporation, may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, Surviving Corporation shall issue in exchange for such
lost, stolen or destroyed Certificate the certificate representing that number
of whole shares of Common Stock which such holder has the right to receive
pursuant to the provisions of this Article III, and any unpaid dividends and
distributions that such holder has the right to receive pursuant to Section
3.2(c).
Section 3.3 Appraisal Rights. If, by reason of the Merger, any
holder of securities of Gulfstar shall be entitled to be paid the "fair value"
of such holder's securities of Gulfstar, as provided in Section 262 of the
DGCL, Gulfstar shall give Capstar notice thereof and Capstar shall have the
right to participate in all negotiations and proceedings with respect to any
such demands. Neither Gulfstar nor the Surviving Corporation shall, except
with the prior written consent of Capstar, voluntarily make any payment with
respect to, or settle or offer to settle, any such demand for payment. By his,
her or its execution and delivery of this Agreement, each Gulfstar Stockholder
hereby irrevocably waives any rights such Gulfstar Stockholder may have to be
paid the "fair value" of such Gulfstar Stockholder's Gulfstar Capital Stock, as
provided in Section 262 of DGCL, and hereby further agrees that such Gulfstar
Stockholder shall not attempt to perfect any such right pursuant to the terms
of the DGCL.
Section 3.4 Stock Transfer Books. At and after the Effective
Time, transfers of shares of Gulfstar Capital Stock outstanding prior to the
Effective Time, other than shares of Gulfstar Capital Stock owned by Capstar or
any of its Subsidiaries, shall not be made on the stock transfer books of the
Surviving Corporation.
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ARTICLE IV.
OTHER ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER
Section 4.1 Stockholder Consent. By his, her or its execution
and delivery of this Agreement, each Gulfstar Stockholder hereby consents (in
his, her or its capacity as a stockholder of Gulfstar) to the approval of the
Merger and the Merger Agreement, and agrees that such Gulfstar Stockholder will
not withdraw, revoke, rescind or alter such consent in any way without the
prior written consent of Capstar. By its execution and delivery of this
Agreement, Capstar hereby consents (in its capacity as the sole stockholder of
Sub) to the approval of the Merger and to the Merger Agreement, and agrees that
it will not withdraw, revoke, rescind or alter such consent in any way without
the prior written consent of Gulfstar.
Section 4.2 Exercise of BT Warrant and Conversion of the BT
Warrant Shares.
(a) Upon the terms and subject to the conditions set
forth herein, Gulfstar and BT hereby covenant and agree with Capstar that,
notwithstanding any of the terms or provisions set forth in the BT Warrant, BT
shall have the right to, and BT shall, exercise the BT Warrant at the Closing
pursuant to Section 1B of the BT Warrant. Upon the terms and subject to the
conditions set forth herein, Gulfstar and BT further hereby covenant and agree
that, notwithstanding the definition of "Warrant Shares" set forth in Section 2
of the BT Warrant, upon the exercise of the BT Warrant at Closing, BT shall be
entitled to receive, and Gulfstar shall be obligated to issue, 8,098 shares of
Gulfstar Class B Common Stock.
(b) Upon the terms and subject to the conditions set
forth herein, BT hereby covenants and agrees with Gulfstar and Capstar that at
the Closing BT will (i) pay the BT Exercise Price by wire transfer of
immediately available funds to an account of Gulfstar designated in writing to
BT prior to the Closing Date, (ii) execute and deliver to Gulfstar a completed
"Exercise Agreement" (as described in Section 1C of the BT Warrant), and (iii)
deliver to Gulfstar the originally executed BT Warrant. Gulfstar hereby
covenants and agrees with BT and Capstar that, upon receipt by Gulfstar of (i)
the BT Exercise Price, (ii) a completed Exercise Agreement, and (iii) the
originally executed BT Warrant, Gulfstar will be obligated to issue the BT
Warrant Shares in the name of BT.
(c) BT and Gulfstar hereby covenant and agree with
Capstar that the exercise of the BT Warrant as described in paragraph 4.2(b)
shall occur, and be deemed to occur, immediately prior to the Effective Time,
and that at the Effective Time the BT Warrant Shares shall be converted into
the right to receive shares of Class B Common Stock as described in Section
3.1(e).
Section 4.3 Conversion of Gulfstar Class C Common Stock Owned by
Xxxxxx X. Xxxxx. (a) Upon the terms and subject to the conditions set forth
herein, Xxxxxx X. Xxxxx, Gulfstar, and Capstar hereby covenant and agree that
(i) Xxxxxx X. Xxxxx hereby elects to convert 10,102 shares of Gulfstar Class C
Common Stock held by him into 10,102 shares of Gulfstar Common Stock at the
Closing in accordance with Article III(e) of Gulfstar's Certificate of
Incorporation, and (ii) Xxxxxx X. Xxxxx hereby elects to convert such shares of
Gulfstar Common Stock into 10,102 shares of Gulfstar Class B Common Stock in
accordance with Article III(e) of Gulfstar's Certificate of Incorporation
immediately following the conversion described in the preceding clause (i).
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(b) Xxxxxx X. Xxxxx and Gulfstar hereby covenant and agree with
Capstar that the conversion of shares of Gulfstar Class C Common Stock held by
Xxxxxx X. Xxxxx and the conversion of shares of Gulfstar Common Stock to be
issued to Xxxxxx X. Xxxxx, all as described in subsection 4.3(a), shall occur,
and be deemed to occur, immediately prior to the Effective Time, and that at
the Effective Time the shares of Gulfstar Class B Common Stock issued upon the
conversion of such shares of Gulfstar Common Stock shall be converted into the
right to receive shares of Class B Common Stock as described in Section 3.1(e).
Section 4.4 Stockholders Agreement. Upon the terms and subject
to the conditions set forth herein, Capstar and each of the Gulfstar
Securityholders hereby covenant and agree with each other that at Closing they
shall execute, deliver and enter into a Stockholders Agreement substantially in
the form attached hereto as Exhibit A (the "Stockholders Agreement").
Section 4.5 Termination Agreement. Upon the terms and subject to
the conditions set forth herein, Gulfstar and BT hereby covenant and agree with
Capstar that at the Closing Gulfstar and BT shall execute, deliver and enter
into a Termination Agreement substantially in the form attached hereto as
Exhibit B (the "Termination Agreement").
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Capstar and Sub.
Capstar and Sub hereby jointly and severally represent and warrant to Gulfstar
as follows:
(a) Organization, Standing and Power. Each of Capstar
and Sub is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and is in good
standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by it
require such qualification and where failure to so qualify or be in
good standing, either singly or in the aggregate, would have a
Material Adverse Effect with respect to Capstar. Each of Capstar and
Sub has the corporate power to carry on its business as it is now
being conducted.
(b) Capitalization. At the time of execution of this
Agreement, the authorized capital stock of Capstar consists of
250,000,000 shares of Class A Common Stock, par value $0.01 per share,
50,000,000 shares of Class B Common Stock, par value $0.01 per share,
50,000,000 shares of Class C Common Stock, par value $0.01 per share,
and 50,000,000 shares of Preferred Stock, par value $0.01 per share.
At the Effective Time, the number of issued and outstanding shares of
capital stock of Capstar will be as described in the Offering
Memorandum of Capstar Radio Broadcasting Partners, Inc., dated June
10, 1997 regarding its 9 1/4% Senior Subordinated Notes due 2007, and
all of such issued and outstanding shares will be duly authorized,
validly issued, fully paid and nonassessable and will not have been
issued in violation of any preemptive or similar rights. All of the
issued and outstanding shares of capital stock of each Subsidiary of
Capstar are duly authorized, validly issued, fully paid and
nonassessable and have not been issued in violation of any preemptive
or similar rights.
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(c) Authority. Each of Capstar and Sub has all requisite
corporate power and authority to enter into this Agreement and each
other agreement, document and instrument required to be executed by it
in accordance herewith, including, without limitation, each of the
documents the forms of which are attached as Exhibits hereto
(collectively, including this Agreement, the "Transaction Documents"),
and to consummate the transactions contemplated hereby or thereby.
The execution and delivery by Capstar and Sub of this Agreement and
the other Transaction Documents to which they are to be parties, and
the consummation by Capstar and Sub of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary
corporate action on the part of Capstar and Sub. This Agreement has
been, and at Closing each of the other Transaction Documents to which
Capstar or Sub is to be a party will be, duly executed and delivered
by Capstar and Sub, and this Agreement constitutes, and upon execution
and delivery thereof by Capstar and Sub, the other Transaction
Documents to which Capstar or Sub is to be a party will constitute,
the valid and binding obligations of each of Capstar and Sub,
enforceable against it in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(d) No Conflict; Required Filings and Consents. The
execution and delivery by Capstar and Sub of this Agreement and the
other Transaction Documents to which they are parties do not, and the
performance by Capstar and Sub, as applicable, of the transactions
contemplated hereby or thereby will not, subject to making the filings
and obtaining the consents, approvals, authorizations and permits
described below, (i) violate, conflict with, or result in any breach
of any provision of the certificates of incorporation or bylaws, in
each case as amended or restated, of Capstar or Sub, (ii) violate,
conflict with, or result in a violation or breach of, or constitute a
default (with or without due notice or lapse of time or both) under,
or permit the termination of, or result in the acceleration of, or
entitle any party to accelerate any obligation, or result in the loss
of any benefit, or give any person the right to require any security
to be repurchased, or give rise to the creation of any lien, charge,
security interest or encumbrance upon any of the properties or assets
of Capstar or any of its Subsidiaries under, any of the terms,
conditions, or provisions of, any loan or credit agreement, note,
bond, mortgage, indenture or deed of trust, or any license, lease,
agreement or other instrument or obligation to which any of them is a
party or by which any of them or any of their properties or assets may
be bound or subject, except for such violations, conflicts, breaches,
defaults, terminations, accelerations, losses or other such events as
have not had, or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect with
respect to Capstar, or (iii) violate any order, writ, judgment,
injunction, decree, statute, rule or regulation of any court or any
federal, state or local administrative agency or commission or other
governmental authority or instrumentality (a "Governmental Entity")
applicable to Capstar or any of its Subsidiaries or by which or to
which any of their respective properties or assets is bound or subject
("Applicable Laws"), except for such violations as have not had, or
could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect with respect to Capstar. No
consent, approval, order, or authorization of, or registration,
declaration, or filing with, any
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Governmental Entity is required by or with respect to Capstar or Sub
in connection with the execution and delivery of this Agreement or any
of the other Transaction Documents by Capstar or Sub or the
consummation of the transactions contemplated hereby or thereby,
except for (1) the filing of a premerger notification report under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (2) applicable requirements, if any, of the rules and
regulations of the Federal Communications Commission (the "FCC") and
(3) applicable requirements, if any, of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
state securities or blue sky laws.
Section 5.2 Representations and Warranties of Gulfstar. Gulfstar
hereby represents and warrants to Capstar that:
(a) Organization, Standing and Power. Gulfstar is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and is in good standing as a
foreign corporation in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require such
qualification and where failure to so qualify or be in good standing,
either singly or in the aggregate, would have a Material Adverse
Effect with respect to Gulfstar. Gulfstar has the corporate power to
carry on its business as it is now being conducted.
(b) Capitalization. The authorized capital stock of
Gulfstar consists of (i) 100,000 shares of Gulfstar Common Stock, par
value $0.01 per share, (ii) 60,000 shares of Gulfstar Class A Common
Stock, par value $0.01 per share, (iii) 10,000 shares of Gulfstar
Class B Common Stock, par value $0.01 per share, (iv) 100,000 shares
of Gulfstar Class C Common Stock, par $0.01 value per share and (v)
500,000 shares of Gulfstar Preferred Stock, par value $0.01 per share.
As of the date hereof, 11,342 shares of Gulfstar Common Stock, 10,000
shares of Gulfstar Class A Common Stock, no shares of Gulfstar Class B
Common Stock, 42,205 shares of Gulfstar Class C Voting Common Stock
and 500,000 shares of Gulfstar Preferred Stock were issued and
outstanding. All of the outstanding shares of Gulfstar Capital Stock
have been validly issued and are fully paid and nonassessable. No
shares of capital stock of Gulfstar are reserved for issuance other
than 8,098 shares of Gulfstar Common Stock reserved for issuance upon
exercise of the BT Warrant and 1,000 shares of Gulfstar Common Stock
reserved for issuance upon exercise of the Gulfstar Stock Options.
Except for the BT Warrant and the Gulfstar Stock Options, there are no
options, warrants, calls, rights, commitments or agreements of any
character to which Gulfstar or any of its Subsidiaries is a party or
by which any of them is bound obligating Gulfstar or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or any Voting
Debt of Gulfstar or any of its Subsidiaries, or obligating Gulfstar or
any of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. Except as
disclosed on Schedule 5.2(b), there are no outstanding contractual
rights or obligations of Gulfstar or any Subsidiary to repurchase,
redeem or otherwise acquire capital stock of, or any equity interest
in, Gulfstar or any of its Subsidiaries. All of the issued and
outstanding shares of capital stock of each Subsidiary of Gulfstar are
duly authorized, validly issued, fully paid and nonassessable and have
not been issued in violation of any preemptive or similar rights.
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(c) Authority. Gulfstar has all requisite corporate
power and authority to enter into this Agreement and each of the other
Transaction Documents to be executed by it in accordance herewith, and
to consummate the transactions contemplated hereby or thereby. The
execution and delivery by Gulfstar of this Agreement and the other
Transaction Documents to which Gulfstar is to be a party, and the
consummation by Gulfstar of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action
on the part of Gulfstar. This Agreement has been, and at Closing each
of the other Transaction Documents to which Gulfstar is to be a party
will be, duly executed and delivered by Gulfstar, and this Agreement
constitutes, and upon execution and delivery thereof by Gulfstar, the
other Transaction Documents to which Gulfstar is to be a party will
constitute, the valid and binding obligation of Gulfstar, enforceable
against it in accordance with its respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(d) No Conflict; Required Filings and Consents. Except
as disclosed on Schedule 5.2(d), the execution and delivery by
Gulfstar of this Agreement and the other Transaction Documents do not,
and the performance by Gulfstar of the transactions contemplated
hereby or thereby will not, subject to making the filings and
obtaining the consents, approvals, authorizations and permits
described below, (i) violate, conflict with, or result in any breach
of any provision of the certificate of incorporation or bylaws, in
each case as amended or restated, of Gulfstar, (ii) violate, conflict
with, or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time or both) under, or permit
the termination of, or result in the acceleration of, or entitle any
party to accelerate any obligation, or result in the loss of any
benefit, or give any person the right to require any security to be
repurchased, or give rise to the creation of any lien, charge,
security interest or encumbrance upon any of the properties or assets
of Gulfstar or any of its Subsidiaries under, any of the terms,
conditions, or provisions of, any loan or credit agreement, note,
bond, mortgage, indenture or deed of trust, or any license, lease,
agreement or other instrument or obligation to which any of them is a
party or by which any of them or any of their properties or assets may
be bound or subject, except for such violations, conflicts, breaches,
defaults, terminations, accelerations, losses or other such events as
have not had, or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect with
respect to Gulfstar, or (iii) violate any Applicable Laws, except for
such violations as have not had, or could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect
with respect to Gulfstar. No consent, approval, order, or
authorization of, or registration, declaration, or filing with, any
Governmental Entity is required by or with respect to Gulfstar in
connection with the execution and delivery of this Agreement or any of
the other Transaction Documents by Gulfstar or the consummation of the
transactions contemplated hereby or thereby, except for (1) the filing
of a premerger notification report under the HSR Act, (2) applicable
requirements, if any, of the rules and regulations of the FCC and (3)
applicable requirements, if any, of the Securities Act, the Exchange
Act, and state securities or blue sky laws.
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(e) Severance Agreements. Neither Gulfstar nor any
Subsidiary is a party to any agreement providing for severance or
termination payments to, or any employment agreement with, any
executive officer or director of Gulfstar or such Subsidiary, other
than as set forth on Schedule 5.2(e) hereto.
Section 5.3 Representations, Warranties and Agreements of the
Gulfstar Securityholders. Each Gulfstar Securityholder represents and warrants
to and agrees with Capstar as follows:
(a) Investment Intent. Such Gulfstar Securityholder
represents and warrants to Capstar that the shares of Common Stock to
be acquired by such Gulfstar Stockholder hereunder or upon exercise of
the Gulfstar Stock Options are being and will be acquired for such
Gulfstar Securityholder's own account for investment and with no
intention of distributing or reselling such shares or any part thereof
or interest therein in any transaction which would be in violation of
the securities laws of the United States of America or any state or
any foreign country or jurisdiction.
(b) Transfer Restrictions. If such Gulfstar
Securityholder should decide to dispose of any of the shares of Common
Stock, such Gulfstar Securityholder understands and agrees that he may
do so only pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration under the
Securities Act. In connection with any offer, resale, pledge or other
transfer (individually and collectively, a "Transfer") of any shares
of Common Stock other than pursuant to an effective registration
statement, Capstar may require that the transferor of such shares
provide to Capstar an opinion of counsel which opinion shall be
reasonably satisfactory in form and substance to Capstar, to the
effect that such Transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of
the Securities Act and any state or foreign securities laws. Such
Gulfstar Securityholder agrees to the imprinting, so long as
appropriate, of substantially the following legend on certificates
representing the shares of Common Stock:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT
IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES
EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED
TRANSFER IS TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A)
ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THEY MAY
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REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY
STATE OR FOREIGN SECURITIES LAW.
The legend set forth above may be removed if and when the
shares of Common Stock represented by such certificate are disposed of
pursuant to an effective registration statement under the Securities
Act or the opinion of counsel referred to above has been provided to
Capstar. Such Gulfstar Securityholder agrees that, in connection with
any Transfer of shares of Common Stock by him pursuant to an effective
registration statement under the Securities Act, such Gulfstar
Securityholder will comply with all prospectus delivery requirements
of the Securities Act. Capstar makes no representation, warranty or
agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of shares of
Common Stock.
(c) Stop Transfer Instruction. Such Gulfstar
Securityholder agrees that Capstar shall be entitled to make a
notation on its records and give instructions to any transfer agent
for the shares of Common Stock in order to implement the restrictions
on transfer set forth in this Agreement.
(d) Status. Such Gulfstar Securityholder represents and
warrants to, and covenants and agrees with, Capstar that (i) at the
time it was offered the shares of Common Stock, it had, (ii) at the
date hereof, it has, and (iii) at the Closing Date, it will have, such
knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating Capstar and an investment in
the shares of Common Stock, and is able to bear the economic risk of
such investment.
(e) Authority. Each such Gulfstar Securityholder that is
an entity represents and warrants to Capstar that (i) as of the
Closing Date, the acquisition of the shares of Common Stock to be
acquired by such Gulfstar Securityholder hereunder has been duly and
properly authorized, and this Agreement has been duly executed and
delivered by it or on its behalf and constitutes the valid and legally
binding obligation of such Gulfstar Securityholder, enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); (ii) the acquisition of the shares of
Common Stock to be acquired by such Gulfstar Securityholder hereunder
does not conflict with or violate (A) its charter, by-laws or similar
constituent documents or (B) any law applicable to it in a manner that
could materially hinder or impair the completion of the Merger and the
other transactions contemplated hereby; and (iii) the acquisition of
shares of Common Stock to be acquired by such Gulfstar Securityholder
hereunder does not impose any penalty or other onerous condition on
such Gulfstar Securityholder that could materially hinder or impact
the completion of the Merger and the other transactions contemplated
hereby.
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(f) Access to Information. Such Gulfstar Securityholder
acknowledges as of the Closing Date that such Gulfstar Securityholder
has been afforded (i) the opportunity to ask such questions as such
Gulfstar Securityholder has deemed necessary of, and to receive
answers from, representatives of Capstar concerning the terms and
conditions of the offering of the shares of Common Stock hereunder and
the merits and risks of investing in the shares of Common Stock; (ii)
access to information about Capstar, Capstar's financial condition,
results of operations, business properties, management and prospects
sufficient to enable such Gulfstar Securityholder to evaluate an
investment in the shares of Common Stock; (iii) the opportunity to
obtain such additional information which Capstar possesses or can
acquire without unreasonable effort or expense that is necessary to
verify the accuracy and completeness of the information provided; and
(iv) the opportunity to receive and review (x) the Offering Memorandum
of Capstar Radio Broadcasting Partners, Inc., dated June 10, 1997
regarding its 9 1/4% Senior Subordinated Notes due 2007 and (y) the
Offering Memorandum of Capstar Broadcasting Partners, Inc., dated June
10, 1997 regarding its 12% Senior Exchangeable Preferred Stock.
(g) Reliance. Such Gulfstar Securityholder also
understands and acknowledges that (i) the shares of Common Stock are
being offered hereunder without registration under the Securities Act
in a transaction that is exempt from the registration provisions of
the Securities Act and (ii) the availability of such exemption depends
in part upon, and that Capstar will rely upon, the accuracy and
truthfulness of the foregoing representations and warranties, and such
Gulfstar Securityholder hereby consents to such reliance.
ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation. The
respective obligations of each party to effect the transactions contemplated
hereby are subject to the satisfaction on or prior to the Closing Date of the
following conditions:
(a) Consents and Approvals. All authorizations,
consents, orders or approvals of, or declarations or filings with, or
expirations of waiting periods imposed by, any Governmental Entity necessary
for the consummation of the transactions contemplated by this Agreement shall
have been filed, occurred or been obtained, including, without limitation,
those required by the HSR Act, the Securities Act, the Exchange Act and the
rules and regulations promulgated by the FCC.
(b) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction, or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect.
(c) No Action. No action shall have been taken nor any
statute, rule or regulation shall have been enacted by any Governmental Entity
that makes the consummation of the transactions contemplated by this Agreement
illegal.
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(d) Private Placements. (i) The private placement of 12%
Senior Exchangeable Preferred Stock of Capstar Broadcasting Partners, Inc., and
(ii) the private placement of 9 1/4% Senior Subordinated Notes of Capstar Radio
Broadcasting Partners, Inc. shall each have been consummated simultaneously
with or prior to the Merger.
Section 6.2 Conditions to Obligation of Gulfstar. The obligation
of Gulfstar to effect the Merger and the other transactions contemplated by
this Agreement is subject to the satisfaction of the following conditions
unless waived, in whole or in part, by Gulfstar:
(a) Representations and Warranties. The representations
and warranties of Capstar and Sub set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except as
contemplated or permitted by this Agreement.
(b) Performance of Obligations. Each of Capstar and Sub
shall have performed in all material respects all obligations required to be
performed by them under this Agreement prior to the Closing Date.
(c) Closing Deliveries. All documents and instruments
required to be delivered, and all actions required to be taken, by the parties
hereto other than Gulfstar pursuant to Article IV shall have been delivered or
taken.
(d) Interest in Capstar Broadcasting Partners, Inc.
Capstar shall have become the owner of all of the issued and outstanding shares
of common stock of Capstar Broadcasting Partners, Inc.
Section 6.3 Conditions to Obligations of Capstar and Sub. The
obligation of Capstar and Sub to effect the Merger and the other transactions
contemplated by this Agreement is subject to the satisfaction of the following
conditions unless waived, in whole or in part, by Capstar and Sub.
(a) Representations and Warranties. The representations
and warranties of Gulfstar set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except as
contemplated or permitted by this Agreement.
(b) Performance of Obligations. Gulfstar shall have
performed in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing Date.
(c) Closing Deliveries. All documents and instruments
required to be delivered, and all actions required to be taken, by the parties
hereto other than Capstar or Sub pursuant to Article IV shall have been
delivered or taken.
(d) Interest in Capstar Broadcasting Partners, Inc.
Capstar shall have become the owner of all of the issued and outstanding shares
of common stock of Capstar Broadcasting Partners, Inc.
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(e) Advisory Committee Approval. The transactions
contemplated in this Agreement shall have been approved by Advisory Committee
to Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P.
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated prior
to the Closing:
(a) by mutual consent of Capstar and Gulfstar;
(b) by either of Capstar or Gulfstar;
(i) if a court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use their
best efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the Merger or any of the other transactions contemplated
by this Agreement, and such order, decree, ruling or other action shall have
become final and nonappealable;
(ii) if the Closing shall not have occurred by
5:00 p.m., Dallas, Texas time on December 31, 1997; provided, however, that the
right to terminate this Agreement under this clause (ii) shall not be available
to any party whose breach of this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date; or
(c) by Capstar:
(i) if there shall have been any material breach
of any representation or warranty or any material breach of any covenant or
agreement set forth in this Agreement on the part of any other party to this
Agreement, which breach shall not have been cured within 20 days following
receipt by the breaching party of written notice of such breach; or
(ii) if any other party to this Agreement other
than Sub shall fail to perform any of their respective obligations set forth in
Article IV; or
(d) by Gulfstar:
(i) if there shall have been any material breach
of any representation or warranty or any material breach of any covenant or
agreement set forth in this Agreement on the part of any other party to this
Agreement, which breach shall not have been cured within 20 days following
receipt by the breaching party of written notice of such breach; or
(ii) if any other party to this Agreement shall
fail to perform any of their respective obligations set forth in Article IV.
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The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party, or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents or other
representatives whether prior to or after the execution of this Agreement.
Notwithstanding anything in the foregoing to the contrary, no party that is in
material breach of this Agreement shall be entitled to terminate this Agreement
except with the consent of the other parties hereto who have the right to
terminate this Agreement.
Section 7.2 Effect of Termination. In the event of a
termination of this Agreement as provided above, there shall be no liability on
the part of any of the parties hereto (or any of their respective directors or
officers), except for liability arising out of a breach of this Agreement.
ARTICLE VIII.
MISCELLANEOUS AND GENERAL
Section 8.1 Payment of Expenses. Whether or not the Merger shall
be consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the Merger.
Section 8.2 Amendment and Modification. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto;
provided, however, that any of the provisions of this Agreement other than
those contained in Articles III or IV may be amended by an instrument in
writing signed by both Capstar and Gulfstar, and such amendment shall be
binding on the other parties hereto.
Section 8.3 Waiver of Compliance. Any failure by any party to
this Agreement to comply with any obligation, covenant, agreement, or condition
contained herein may be waived only if set forth in an instrument in writing
signed by the party or parties to be bound thereby, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, Agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
other failure.
Section 8.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
applicable law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
Section 8.5 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed 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):
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(a) If to Capstar, to
Capstar Broadcasting Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: R. Xxxxxx Xxxxx
Facsimile: (000) 000-0000
(b) If to the Gulfstar, to
Gulfstar Communications, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
Facsimile: (000) 000-0000
(c) If to a Gulfstar Stockholder, to the address set
forth below such Gulfstar Stockholder's name on Schedule I.
Section 8.6 Interpretation. All references in this Agreement to
Exhibits, Schedules, Articles, Sections, subsections and other subdivisions
refer to the corresponding Exhibits, Schedules, Articles, Sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any Articles, Sections, subsections or
other subdivisions of this Agreement are for convenience only, do not
constitute any part of such Articles, Sections, subsections or other
subdivisions, and shall be disregarded in construing the language contained
therein. The words "this Agreement," "herein," "hereby," "hereunder," and
"hereof," and words of similar import, refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The words "this
Section" and "this subsection" and words of similar import, refer only to the
Sections or subsections hereof in which such words occur. The word "or" is not
exclusive, and the word "including" (in its various forms) means "including
without limitation." Pronouns in masculine, feminine, or neuter genders shall
be construed to state and include any other gender and words, terms and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise expressly
requires. Unless the context otherwise requires, all defined terms contained
herein shall include the singular and plural and the conjunctive and
disjunctive forms of such defined terms. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 8.7 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart; provided, that in the sole discretion and at the
sole option of Capstar, this Agreement shall become effective when one or more
such counterparts have been signed by Capstar, Sub, Gulfstar and Gulfstar
Securityholders holding shares of Gulfstar Capital Stock having not less than
the minimum number of votes that would be necessary under applicable law and
Gulfstar's
22
23
Certificate of Incorporation and Bylaws to approve the Merger and this
Agreement at a meeting at which all shares of Gulfstar Capital Stock entitled
to vote thereon were present and voted.
Section 8.8 Entire Agreement. This Agreement (which term shall
be deemed to include the exhibits and schedules hereto and the other
certificates, documents and instruments delivered hereunder) constitutes the
entire agreement of the parties hereto and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. There are no representations or warranties, agreements
or covenants other than those expressly set forth in this Agreement.
Section 8.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
Section 8.10 Further Actions. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its commercially
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 to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after the Closing Date any further action is necessary to carry
out the purposes of this Agreement, the parties to this Agreement and their
duly authorized representatives shall take all such actions.
Section 8.11 Specific Performance. The parties acknowledge and
agree that the breach of the provisions of this Agreement by Capstar or Sub on
the one hand, or Gulfstar or any of the Gulfstar Stockholders on the other
hand, could not be adequately compensated with monetary damages and would
irreparably damage the other party or parties hereto, and, accordingly, that
injunctive relief and specific performance shall be appropriate remedies to
enforce the provisions of this Agreement and each of the parties hereto hereby
waive any claim or defense that there is an adequate remedy at law for such
breach; provided, however, that nothing herein shall limit the remedies, legal
or equitable, otherwise available and all remedies herein are in addition to
any remedies available at law or otherwise.
Section 8.12 Survival of Representations, Warranties, and
Covenants. Regardless of any investigation at any time made by or on behalf of
any party in respect thereof, each of the representations and warranties made
hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall terminate on the Closing Date. Following the date of
termination of a representation or warranty, no claim can be brought with
respect to a breach of such representation or warranty, but no such termination
shall affect any claim for a breach of a representation or warranty that was
asserted before the date of termination. To the extent that such are
performable after the Closing, each of the covenants and agreements contained
in this Agreement shall surviving the Closing indefinitely.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
23
24
IN WITNESS HEREOF, this Agreement has been duly executed and delivered
by the parties hereto or by their duly authorized officers on the date first
hereinabove written.
GULFSTAR COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxxx
Title:
----------------------------------------
CAPSTAR BROADCASTING CORPORATION
By: /s/ Xxxx X. Xxxxx
------------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
CBC-GULFSTAR MERGER SUB, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
GULFSTAR STOCKHOLDERS
/s/ Xxxxxx X. Xxxxx
----------------------------------------------
Xxxxxx X. Xxxxx
/s/ R. Xxxxxx Xxxxx
----------------------------------------------
R. Xxxxxx Xxxxx
/s/ D. Xxxxx Xxxxxxxxx
----------------------------------------------
D. Xxxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxx
----------------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxxxx X. XxXxxxxxx
----------------------------------------------
Xxxxxxx X. XxXxxxxxx
S-1
25
/s/ Xxxxxxxx X. Xxxxxx, Xx.
----------------------------------------------
Xxxxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxx
----------------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxx Xxxxx
----------------------------------------------
Xxx Xxxxx
/s/ Xxxxx X. Xxxxxxxx, Xx.
----------------------------------------------
Xxxxx X. Xxxxxxxx, Xx.
/s/ Xxxx Xxxxxx
----------------------------------------------
Xxxx Xxxxxx
/s/ Xxx Xxxxxx
----------------------------------------------
Xxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------------
Xxxxxxx Xxxxxxxx
XXXX X. XXXXXX SPECIAL TRUST
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trustee
XXXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: President
S-2
26
BT CAPITAL PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Managing Director
GULFSTAR OPTION HOLDERS
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxx
----------------------------------------------
Xxxxx X. Xxx
S-3
27
SCHEDULE I
GULFSTAR SECURITYHOLDERS
---------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxxx
Hicks, Muse, Xxxx & Xxxxx Incorporated 0000 XX X-00 #000
000 Xxxxxxxx Xxxxx, Xxxxx 0000 Xxx Xxxxxxx, Xxxxx 00000
Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
R. Xxxxxx Xxxxx Xxxxxxx X. Xxxxx
Capstar Broadcasting Partners, Inc. 0000 Xxxxxxxxx Xxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxx, Xxxxx 00000
Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
D. Xxxxxxxx Xxxxxxxxx Xxx Xxxxx
0000 Xxxxx Xxxx Xxxxx 0000 Xxxxxxxxxx Xxxxx #000
Xxxxxx, Xxxxx 00000 Xxxxx, Xxxxx 00000
Xxxx X. Xxxxxx Special Trust Xxxxx X. Xxxxxxxx, Xx.
000 Xxxxxxxx Xxxxx, Xxxxx 0000 0000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
Xxxx X. Xxxxx Xxxxxxxx Communications, Inc.
0000 Xxxxxxx Xxxx Xxxxx 0000 Xxxxxxxxxxx
Xxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
Xxxxxxx X. XxXxxxxxx Xxxx Xxxxxx
Hicks, Muse, Xxxx & Xxxxx Incorporated GulfStar Communications, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx, Xx. Xxx Xxxxxx
Hicks, Muse, Xxxx & Xxxxx Incorporated 000 Xxxxx Xxxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000 Xxxxxx, Xxxxx 00000
Xxxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx BT Capital Partners, Inc.
GulfStar Communications, Inc. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx, Xxxxx 00000 Attn: Xxxxx Xxxxxxxxxxx
---------------------------------------------------------------------------------------------
Xxxxx X. Xxx Xxxxxxx X. Xxxxxx
GulfStar Communications, Inc. GulfStar Communications, Inc.
0000 X-00 Xxxx 0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000 Xxxxx, Xxxxx 00000
---------------------------------------------------------------------------------------------
I-1
28
SCHEDULE II
GULFSTAR STOCKHOLDERS
SHARES OF GULFSTAR
CAPITAL STOCK OWNED
AS OF THE DATE OF THE
NAME AGREEMENT
---- -----------------------------
PART 1. COMMON STOCK
a. Gulfstar Common Stock D. Xxxxx Xxxxxxxxx 2,500
Xxxx X. Xxxxxx Special Trust 2,105
Xxxx X. Xxxxx 1,912
Xxxxxxx X. XxXxxxxxx 93
Xxxxxxxx X. Xxxxxx, Xx. 537
Xxxx X. Xxxxxx 564
Xxxxx X. Xxxxxxxx, Xx. 16
Xxxxxxxx Communications, Inc. 141
Xxxx Xxxxxx 2,772
Xxx Xxxxxx 346
Xxxx Xxxxxxxx 356
------
Total 11,342
b. Gulfstar Class A Common R. Xxxxxx Xxxxx 10,000
Stock ------
Total 10,000
c. Gulfstar Class B Common -0-
Stock
d. Gulfstar Class C Common Xxxxxx X. Xxxxx 39,033
Stock
Xxxxxxx X. Xxxxx 3,064
Xxx Xxxxx 108
---------
Total 42,205
PART 2. GULFSTAR PREFERRED STOCK BT Securities Corporation 500,000
II-1
29
SCHEDULE III
GULFSTAR OPTION HOLDERS
SHARES OF GULFSTAR COMMON STOCK
NAME UNDERLYING OPTION
---- -----------------
Xxxxx X. Xxx 392
Xxxxxxx X. Xxxxxx 608
III-1
