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EXHIBIT 10.26
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
February 20, 1997, is entered into by and among Capstar Broadcasting Partners,
Inc., a Delaware corporation (the "Company") and Xxxxx X. Xxxxxx ("Xxxxxx").
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
"Advice" shall have the meaning provided in Section 2.3 hereof.
"Affiliate, means, with respect to any Person, any Person who, directly
or indirectly, controls, is controlled by or is under common control with that
Person.
"Agreement" means this Registration Rights Agreement, as such from time
to time may be amended.
"Appraised Value" means, as to any Purchasable Securities, the fair
market value of such Purchasable Securities at the date of the Purchase Notice
as determined by an Independent Financial Expert selected by the Company within
10 days after the giving of a Purchase Notice; provided, however, if Xxxxxx
shall object to such determination within 10 days after being notified thereof
by the Company, Xxxxxx shall within 10 days of such notice select an
Independent Financial Expert to determine the fair market value of such
Purchasable Securities on behalf of Xxxxxx. In the event that the Independent
Financial Experts selected by each of the Company and Xxxxxx cannot agree on
the fair market value of such Purchasable Securities, then the two Independent
Financial Experts shall promptly mutually select a third Independent Financial
Expert to determine the fair market value of such Purchasable Securities, and
the value selected by such third firm shall be binding on all the parties
hereto. Each such Independent Financial Expert may use any customary method of
determining fair market value. The cost of the Independent Financial Expert
selected by the Company shall be paid by the Company, the cost of the
Independent Financial Expert, if any, selected by Xxxxxxx shall be paid by
Xxxxxx, and the cost of the Independent Financial Expert, if any, mutually
selected by the two Independent Financial Experts appointed by each of the
Company and Xxxxxx shall be paid one-half by the Company and one-half by
Xxxxxx. In determining the Appraised Value, the Independent Financial Expert
may assume that the Common Stock of the Company is publicly traded and that the
Common Stock constituting the Purchasable Securities is freely tradable and no
minority position discount shall be made.
"Business Day" means a day that is not a Legal Holiday.
"Capstar L.P." means Capstar Broadcasting Partners, L.P., a Delaware
limited partnership.
"Change of Control" means the first to occur of the following events:
(i) any sale, lease, exchange, or other transfer (in one transaction or series
of related transactions) of all or substantially all of the assets
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of the Company to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), other than one or more members
of the HMC Group, (ii) a majority of the Board of Directors of the Company
shall consist of Persons who are not Continuing Directors; or (iii) the
acquisition by any Person or Group (other than one or more members of the HMC
Group) of the power, directly or indirectly, to vote or direct the voting of
securities having more than 50% of the ordinary voting power for the election
of directors of the Company.
"Common Stock" means shares of the Common Stock, $0.01 par value per
share, of the Company, and any capital stock into which such Common Stock
thereafter may be changed.
"Common Stock Equivalents" means without duplication with any other
Common Stock or 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, Common Stock of the Company and securities
convertible or exchangeable into Common Stock of the Company, whether at the
time of issuance or upon the passage of time or the occurrence of some future
event.
"Company" shall have the meaning set forth in the introductory paragraph
hereof.
"Continuing Director" means, as of the date of determination, any Person
who (i) was a member of the Board of Directors of the Company as of the date of
this Agreement, (ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election, or (iii) is a member of the HMC Group.
"Demand Registration" shall have the meaning set forth in Section 2.1.1
hereof.
"Demand Request" shall have the meaning set forth in Section 2.1.1.
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"HMC Group" means HMTF and its Affiliates (including Capstar L.P.) and
its and their respective officers, directors, and employees (and members of
their respective families and trusts for the primary benefit of such family
members).
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas
corporation.
"Independent Financial Expert" means any investment bank which is
registered as a broker dealer under the Exchange Act and has aggregate net
capital of at least $50 million.
"Inspectors" shall have the meaning provided in Section 2.2 hereof.
"Legal Holiday" shall have the meaning provided in Section 4.2 hereof.
"NASD" shall have the meaning provided in Section 2.2 hereof.
"Option Shares" means at any time shares of Common Stock issuable to
Xxxxxx under any Common Stock Equivalents then owned by Xxxxxx.
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"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Purchasable Securities" shall have the meaning in Section 3.1.1.
"Purchase Option" shall have the meaning provided in Section 3.1.1.
"Purchase Notice" shall have the meaning in Section 3.1.1.
"Qualified IPO" means a firm commitment underwritten public offering of
Common Stock for cash pursuant to a registration statement under the Securities
Act; provided that the term "Qualified IPO" shall not include a public offering
made pursuant to a Demand Request.
"Records" shall have the meaning provided in Section 2.2 hereof.
"Registrable Shares" means at any time (i) the Common Stock of the
Company then owned by Xxxxxx, whether owned on the date hereof or acquired
hereafter and (ii) the Option Shares; provided, however, that Registrable
Shares shall not include any shares that have been assigned or transferred by
Xxxxxx to any other Person.
"Registration Expenses" shall have the meaning provided in Section 2.4
hereof.
"Required Filing Date, shall have the meaning provided in Section
2.1.1(b) hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Seller Affiliates" shall have the meaning provided in Section 2.5.1
hereof.
"Suspension Notice" shall have the meaning provided in Section 2.3
hereof.
Section 1.2 Rules of Construction. Unless the context otherwise
requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "herein," "thereof" and other words of similar import
refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
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ARTICLE 2
REGISTRATION RIGHTS
Section 2.1 Demand Registration.
2.1.1 Request for Registration.
(a) At any time within 30 days after the tenth anniversary of
the date of this Agreement, Xxxxxx may request the Company, in writing
(a "Demand Request"), to effect the registration under the Securities
Act of all or part of his Registrable Shares (a "Demand Registration");
provided that the right of Xxxxxx to make a Demand Request shall
terminate upon the first to occur of a Qualified IPO, or a Change of
Control.
(b) The Demand Request shall specify the number of Registrable
Shares proposed to be sold. Subject to Section 2.1.5 and Section 2.1.6,
the Company shall file the Demand Registration within 90 days after
receiving a Demand Request (the "Required Filing Date") and shall use
all commercially reasonable efforts to cause the same to be declared
effective by the SEC as promptly as practicable after such filing;
provided, that the Company need effect only one Demand Registration.
2.1.2 Effective Registration and Expenses. A registration will not
count as a Demand Registration until it has become effective (unless Xxxxxx has
withdrawn all of his Registrable Shares and the Company has performed its
obligations hereunder in all material respects, in which case such demand will
count as a Demand Registration); provided, that if, after it has become
effective, an offering of Registrable Shares pursuant to a registration is
interfered with by any stop order, injunction, or other order or requirement of
the SEC or other governmental agency or court, such registration will be deemed
not to have been effected and will not count as a Demand Registration and
Xxxxxx shall thereafter have the right at any time within 30 days after such
interference shall have been resolved to make a second Demand Request for a
Demand Registration.
2.1.3 Selection of Underwriters. The offering of Registrable Shares
pursuant to a Demand Registration shall be in the form of a "firm commitment"
underwritten offering. Xxxxxx shall select the investment banking firm or
firms to manage the underwritten offering; provided that such selection shall
be subject to the consent of the Company, which consent shall not be
unreasonably withheld.
2.1.4 Priority on Demand Registrations. No securities to be sold for
the account of any Person (including the Company) other than Xxxxxx shall be
included in a Demand Registration unless the managing underwriter or
underwriters shall advise the Company or Xxxxxx in writing that the inclusion
of such securities will not materially and adversely affect the price or
success of the Demand Registration.
2.1.5 Deferral of Filing. The Company may defer the filing (but not
the preparation) of a registration statement required by Section 2.1 until a
date not later than 180 days after the Required Filing Date (or, if longer, 180
days after the effective date of the registration statement contemplated by
clause (ii) below) if (i) at the time the Company receives the Demand Request,
the Company or any of its Subsidiaries are engaged in confidential negotiations
or other confidential business activities, disclosure of which would be
required in such registration statement (but would not be required if such
registration statement were not filed), and the Board of Directors of the
Company determines in good faith that such disclosure would be materially
detrimental to the Company and its stockholders or would have a material
adverse effect on any
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such confidential negotiations or other confidential business activities, or
(ii) prior to receiving the Demand Request, the Board of Directors had
determined to effect a registered underwritten public offering of the Company's
securities for the Company's account and the Company had taken substantial
steps (including, but not limited to, selecting a managing underwriter for such
offering) and is proceeding with reasonable diligence to effect such offering.
A deferral of the filing of a registration statement pursuant to this Section
2.1.5 shall be lifted, and the requested registration statement shall be filed
forthwith, if, in the case of a deferral pursuant to clause (i) of the
preceding sentence, the negotiations or other activities are disclosed or
terminated, or, in the case of a deferral pursuant to clause (ii) of the
preceding sentence, the proposed registration for the Company's account is
abandoned. In order to defer the filing of a registration statement pursuant
to this Section 2.1.5, the Company shall promptly (but in any event within 10
days), upon determining to seek such deferral, deliver to Xxxxxx a certificate
signed by an executive officer of the Company stating that the Company is
deferring such filing pursuant to this Section 2.1.5 and a general statement of
the reason for such deferral and an approximation of the anticipated delay.
The Company may defer the filing of the registration statement pursuant to this
Section 2.1.5 only once.
Section 2.1.6 No Obligation to Proceed. Notwithstanding any provision
contained herein to the contrary, the Company's obligations hereunder to effect
a Demand Registration pursuant to a Demand Request made hereunder shall
terminate in full upon the giving of a Purchase Notice pursuant to Section 3.1
or upon the Company effecting a Qualified IPO after the receipt of the Demand
Request within the deferral period as contemplated by clause (ii) of Section
2.1.5.
2.2 Registration Procedures. Whenever Xxxxxx has requested that any
Registrable Shares be registered pursuant to this Agreement, the Company will
use its commercially reasonable efforts to effect the registration and the sale
of such Registrable Shares in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(i) prepare and file with the SEC a registration statement on any
appropriate form under the Securities Act with respect to such Registrable
Shares and use its commercially reasonable efforts to cause such registration
statement to become effective;
(ii) prepare and file with the SEC such amendments, post-effective
amendments, and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 180 days (or such lesser
period as is necessary for the underwriters in an underwritten offering to sell
unsold allotments) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(iii) furnish to the seller of Registrable Shares and the underwriters
of the securities being registered such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), any
documents incorporated by reference therein and such other documents as the
seller or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by the seller or the sale of such
securities by such underwriters (it being understood that, subject to Section
2.3 and the requirements of the Securities Act and applicable State securities
laws, the Company consents to the use of the prospectus and any amendment or
supplement thereto by each seller and the underwriters in connection with the
offering and sale of the Registrable Shares covered by the registration
statement of which such prospectus, amendment or supplement is a part);
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(iv) use its commercially reasonable efforts to register or qualify
such Registrable Shares under such other securities or blue sky laws of such
jurisdictions as the managing underwriter reasonably requests; use its
commercially reasonable efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period in which such registration
statement is required to be kept effective; and do any and all other acts and
things which may be reasonably necessary or advisable to enable the seller to
consummate the disposition of the Registrable Shares owned by the seller in
such jurisdictions (provided, however, that the Company will not be required to
(A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (B) consent to
general service of process in any such jurisdiction);
(v) promptly notify the seller and each underwriter and (if requested
by any such Person) confirm such notice in writing (A) when a prospectus or any
prospectus supplement or post-effective amendment has been filed and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (B) of the issuance by any state securities or other
regulatory authority of any order suspending the qualification or exemption
from qualification of any of the Registrable Shares under state securities or
"blue sky" laws or the initiation of any proceedings for that purpose, and (C)
of the happening of any event which makes any statement made in a registration
statement or related prospectus untrue or which requires the making of any
changes in such registration statement, prospectus or documents so that they
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, as promptly as practicable thereafter, prepare and
file with the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter deliverable to the purchasers of such Registrable Shares,
such prospectus will not contain any untrue statement of a material fact or
omit a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) make generally available to the Company's securityholders an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act no later than 30 days after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after the
effective date of a registration statement, which earnings statement shall
cover said 12-month period, and which requirement will be deemed to be
satisfied if the Company timely files complete and accurate information on
Forms 10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with
Rule 158 under the Securities Act;
(vii) if requested by the managing underwriter or the seller promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or the seller reasonably requests to be
included therein, including, without limitation, with respect to the
Registrable Shares being sold by the seller, the purchase price being paid
therefor by the underwriters and with respect to any other terms of the
underwritten offering of the Registrable Shares to be sold in such offering,
and promptly make all required filings of such prospectus supplement or post-
effective amendment;
(viii) as promptly as practicable after filing with the SEC of any
document which is incorporated by reference into a registration statement (in
the form in which it was incorporated), deliver a copy of each such document to
the seller;
(ix) cooperate with the seller and the managing underwriter to
facilitate the timely preparation and delivery of certificates (which shall not
bear any restrictive legends unless required under applicable law) representing
securities sold under any registration statement, and enable such securities to
be in such denominations and registered in such names as the managing
underwriter or the seller may request and keep
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available and make available to the Company's transfer agent prior to the
effectiveness of such registration statement a supply of such certificates;
(x) promptly make available for inspection by the seller, any
underwriter participating in any disposition pursuant to any registration
statement, and any attorney, accountant or other agent or representative
retained by any such seller or underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information requested
by any such Inspector in connection with such registration statement; provided,
that, unless the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the registration statement or the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (x) if (A) the Company believes, after
consultation with counsel for the Company, that to do so would cause the
Company to forfeit an attorney-client privilege that was applicable to such
information or (B) if either (1) the Company has requested and been granted
from the SEC confidential treatment of such information contained in any filing
with the SEC or documents provided supplementally or otherwise or (2) the
Company reasonably determines in good faith that such Records are confidential
and so notifies the Inspectors in writing unless prior to furnishing any such
information with respect to (A) or (B) such holder of Registrable Securities
requesting such information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions; and provided, further that
each holder of Registrable Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed
confidential;
(xi) furnish to the underwriter a signed counterpart of (A) an opinion
or opinions of counsel to the Company, and (B) a comfort letter or comfort
letters from the Company's independent public accountants, each in customary
form and covering such matters of the type customarily covered by opinions or
comfort letters, as the case may be, as the managing underwriter reasonably
requests;
(xii) cause the Registrable Shares included in any registration
statement to be (A) listed on each securities exchange, if any, on which any
securities issued by the Company are then listed, or (B) authorized to be
quoted and/or listed (to the extent applicable) on the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") or the NASDAQ National
Market System if the Registrable Shares so qualify;
(xiii) provide a CUSIP number for the Registrable Shares included in any
registration statement not later than the effective date of such registration
statement;
(xiv) cooperate with the seller and each underwriter participating in
the disposition of such Registrable Shares and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. ("NASD");
(xv) during the period when the prospectus is required to be delivered
under the Securities Act, promptly file all documents required to be filed with
the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;
(xvi) notify the seller of Registrable Shares promptly of any request
by the SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
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(xvii) prepare and file with the SEC promptly any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for the Company or the managing underwriter, is required in
connection with the distribution of the Registrable Shares;
(xviii) enter into such agreements (including underwriting agreements
in the managing underwriter's customary form) as are customary in connection
with an underwritten registration; and
(xix) advise the seller of such Registrable Shares, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for such purpose and promptly
use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
2.3 Suspension of Dispositions. Upon receipt of any notice (a
"Suspension Notice") from the Company of the happening of any event of the kind
described in Section 2.2(v)(C), Xxxxxx will forthwith discontinue disposition
of Registrable Shares until such Xxxxxx'x receipt of the copies of the
supplemented or amended prospectus, or until he is advised in writing (the
"Advice") by the Company that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the prospectus, and, if so directed by the
Company, Xxxxxx will deliver to the Company all copies, other than permanent
file copies then in Xxxxxx'x possession, of the prospectus covering such
Registrable Shares current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of registration statements set forth in Section 2.2(ii) hereof
shall be extended by the number of days during the period from and including
the date of the giving of the Suspension Notice to and including the date when
each seller of Registrable Shares covered by such registration statement shall
have received the copies of the supplemented or amended prospectus or the
Advice. The Company shall use its commercially reasonable efforts and take
such actions as are reasonably necessary to render the Advice as promptly as
practicable.
2.4 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 2 including, without limitation,
all registration and filing fees, all fees and expenses associated with filings
required to be made with the NASD (including, if applicable, the fees and
expenses of any "qualified independent underwriter" as such term is defined in
Schedule E of the By-Laws of the NASD, and of its counsel), as may be required
by the rules and regulations of the NASD, fees and expenses of compliance with
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualifications of the Registrable
Shares), rating agency fees, printing expenses (including expenses of printing
certificates for the Registrable Shares in a form eligible for deposit with
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by Xxxxxx), messenger and delivery expenses, the
Company's internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with any listing of the
Registrable Shares, fees and expenses of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or "cold comfort" letters required by or incident to such performance),
securities acts liability insurance (if the Company elects to obtain such
insurance), the fees and expenses of any special experts retained by the
Company in connection with such registration, and the reasonable fees and
expenses of one firm of counsel for Xxxxxx (all such expenses being herein
called "Registration Expenses") will be borne by the Company whether or not any
registration statement becomes effective; provided that, except as expressed
otherwise provided above, in no event shall Registration Expenses include any
underwriting discounts, commissions, or fees attributable to the sale of the
Registrable Shares or any counsel, accountants, or other persons retained or
employed by Xxxxxx.
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2.5 Indemnification.
2.5.1 The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, Xxxxxx as a seller of Registrable Shares, and each of
his employees, advisors, agents and representatives and any agent or investment
advisor thereof (collectively, the "Seller Affiliates") (A) against any and all
losses, claims, damages, liabilities, and expenses, joint or several
(including, without limitation, attorneys' fees and disbursements except as
limited by 2.5.3) based upon, arising out of, related to or resulting from any
untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus, or preliminary prospectus or any amendment
thereof or supplement thereto, or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (B) against any and all loss, liability, claim, damage,
and expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon, arising out of, related to or resulting from any such
untrue statement or omission or alleged untrue statement or omission, and (C)
against any and all costs and expenses (including reasonable fees and
disbursements of counsel) as may be reasonably incurred in investigating,
preparing, or defending against any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon, arising out of, related to or resulting from any such
untrue statement or omission or alleged untrue statement or omission, to the
extent that any such expense or cost is not paid under subparagraph (A) or (B)
above; except insofar as the same are made in reliance upon and in strict
conformity with information furnished in writing to the Company by Xxxxxx or
any Seller Affiliate for use therein or arise from Xxxxxx'x or any Seller
Affiliate's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished Xxxxxx or Seller Affiliate with a sufficient number of copies of the
same. The reimbursements required by this Section 2.5.1 will be made by
periodic payments during the course of the investigation or defense, as and
when bills are received or expenses incurred.
2.5.2 In connection with any registration statement of Registrable
Shares, Xxxxxx will furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the fullest extent permitted
by law, Xxxxxx will indemnify the Company and its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act
or the Exchange Act) against any and all losses, claims, damages, liabilities,
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements except as limited by Section 2.5.3) resulting from any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement, prospectus, or any preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is
contained in any information or affidavit so furnished in writing by Xxxxxx or
any of his Seller Affiliates specifically for inclusion in the registration
statement; provided that the liability of Xxxxxx will be limited to, the net
amount received by Xxxxxx from the sale of Registrable Shares pursuant to such
registration statement; provided, however, that Xxxxxx shall not be liable in
any such case to the extent that prior to the filing of any such registration
statement or prospectus or amendment thereof or supplement thereto, Xxxxxx has
furnished in writing to the Company information expressly for use in such
registration statement or prospectus or any amendment thereof or supplement
thereto which corrected or made not misleading information previously furnished
to the Company.
2.5.3 Any Person entitled to indemnification hereunder will (A) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to
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give such notice shall not limit the rights of such Person) and (B) unless in
such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (X)
the indemnifying party has agreed to pay such fees or expenses, or (Y) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person. If such defense is not
assumed by the indemnifying party as permitted hereunder, the indemnifying
party will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be
unreasonably withheld). If such defense is assumed by the indemnifying party
pursuant to the provisions hereof, such indemnifying party shall not settle or
otherwise compromise the applicable claim unless (1) such settlement or
compromise contains a full and unconditional release of the indemnified party
or (2) the indemnified party otherwise consents in writing. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party, a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the reasonable fees and disbursements of such
additional counsel or counsels.
2.5.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 2.5.1 or Section 2.5.2 are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, liabilities, or expenses (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and
the parties, relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 2.5.4 were determined by pro rata allocation (even if Xxxxxx or any
underwriters or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 2.5.4. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities,
or expenses (or actions in respect thereof) referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or, except as provided in
Section 2.5.3, defending any such action or claim. Notwithstanding the
provisions of this Section 2.5.4, Xxxxxx shall not be required to contribute an
amount greater than the dollar amount by which the proceeds received by Xxxxxx
with respect to the sale of any Registrable Shares exceeds the amount of
damages which Xxxxxx has otherwise been required to pay by reason of such
statement or omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
If indemnification is available under this Section 2.5, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 2.5.1 and Section 2.5.2 without regard to the relative
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fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 2.5.4.
2.5.5 The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the transfer of
the Registrable Shares.
ARTICLE 3
PURCHASE OPTION
Section 3.1. Purchase Option.
3.1.1 Purchase Option. After the Company's receipt of a Demand
Request, the Company shall have the option (the "Purchase Option") to purchase,
and if the Purchase Option is exercised, Xxxxxx (or the executor or
administrator of Xxxxxx'x estate, in the event of his death, or Xxxxxx'x legal
representative in the event of his incapacity) (hereinafter, collectively with
Xxxxxx, the "Grantor") shall sell to the Company, (or as provided in Section
3.1.4 an assignee of the Company) all of the shares of Common Stock and Common
Stock Equivalents held by the Grantor (such shares of Common Stock and Common
Stock Equivalents collectively being referred to as the "Purchasable
Securities"), subject to the Company's (or, if applicable, its assignee)
compliance with the conditions hereinafter set forth. The Company (acting for
itself or, if applicable, its assignee) shall give notice (the "Purchase
Notice") in writing to the Grantor of the exercise of the Purchase Option
within 30 days after the Company' receipt of a Demand Request. If no Purchase
Notice is given within the time limit specified above, the Purchase Option
shall terminate.
3.1.2 Closing. Unless otherwise agreed by the Grantor and the Company,
(acting for itself or, if applicable, its assignee) the closing of an exercise
of the Purchase Option will take place at the offices of the Company in Dallas,
Texas, on the fifth Business Day after the purchase price has been established
as contemplated by Section 3.1.3. At the closing, the Company (of, if
applicable, its assignee) will pay the purchase price to the Grantor in cash
(by certified or cashier's check) upon the Grantor's delivering to the Company
(or, if applicable, its assignee) valid certificates or agreements evidencing
all Purchasable Securities being purchased pursuant to the exercise of the
Purchase Option. Certificates or agreements representing the Purchasable
Securities will be duly endorsed (with signature guaranteed) for transfer to
the Company (or, if applicable, its assignee). Upon delivery of such
certificates or agreements to the Company if applicable, its assignee) , the
Grantor will be deemed to represent and warrant to the Company (or, if
applicable, its assignee) that the transferred Purchasable Securities are owned
by the Grantor free and clear of all liens, adverse claims, and other
encumbrances other than those arising under any Stockholders Agreement or
similar agreement between Xxxxxx and the Company. The occurrence of the
closing shall be conditioned upon such representation and warranty being true
and correct as of the closing date. The Company (or, if applicable, its
assignee) and the Grantor will promptly perform, whether before or after any
Purchase Option closing, such additional acts (including without limitation
executing and delivering additional documents) as are reasonably required by
either such party to effect more fully the transactions contemplated hereby.
3.1.3 Exercise Price. Unless the Company (or, if applicable, its
assignee) and Grantor otherwise agree, the purchase price for the Purchasable
Securities will equal the Appraised Value thereof.
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3.1.4 Assignment of Purchase Option. The Purchase Option may be
assigned or transferred in whole or in part by the Company to any one or more
members of the HMC Group without any consent or other action on the part of any
other party hereto.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows (or at such
other address as may be substituted by notice given as herein provided):
If to the Company:
Capstar Broadcasting Partners, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
Copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
If to Xxxxxx:
Xxxxx X. Xxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx
Any notice or communication hereunder shall be deemed to have been given
or made as of the date so delivered if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five
calendar days after mailing if sent by registered or certified mail (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
If a notice or communication is mailed in the manner provided above, it
is duly given, whether or not the addressee receives it.
Section 4.2 Legal Holidays. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest on the amount of
such payment shall accrue for the intervening period.
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Section 4.3 Governing Law; Jurisdiction. THIS STOCKHOLDERS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 4.4 Successors and Assigns of Xxxxxx. The provisions of this
Agreement that are for Xxxxxx'x benefit are personal in nature and shall not be
assignable but may be enforced by the executor or administrator of Xxxxxx'x
estate, in the event of his death or Xxxxxx'x legal representative in the event
of his incapacity. Except as otherwise provided in this Section 4.4, this
Agreement shall be binding upon the parties hereto and their respective
successors and assigns.
Section 4.5 Duplicate Originals. All parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of
them together shall represent the same agreement.
Section 4.6 Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and the remaining provisions shall not in any way be affected or
impaired thereby.
Section 4.7 No Waivers; Amendments.
4.7.1 No failure or delay on the part of the Company or Xxxxxxx in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
Xxxxxx at law or in equity or otherwise.
4.7.2 Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Company
and Xxxxxx.
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SIGNATURES TO AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first written above.
CAPSTAR BROADCASTING PARTNERS,
INC.
By: /s/ XXXXXXX X. XXXXXXXX, XX.
------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
----------------------------
Title: Executive Vice President
---------------------------
/s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
