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STOCKHOLDER TENDER AGREEMENT
STOCKHOLDER TENDER AGREEMENT, dated as of July 14, 1997 (this
"Agreement"), by and among the persons or entities designated as Stockholders
on the signature pages hereto (the "Stockholders" and each a "Stockholder"),
Chancellor Broadcasting Company, a Delaware corporation ("Chancellor"),
Evergreen Media Corporation, a Delaware corporation (Evergreen, and together
with Chancellor, "Parents"), and Morris Acquisition Corporation, a Delaware
corporation ("Merger Sub"). Capitalized terms used and not otherwise defined
herein shall have the respective meanings assigned to them in the Merger
Agreement referred to below.
WHEREAS, the Stockholders collectively own of record and
beneficially certain shares of common stock, par value $.01 per share (the
"Company Common Stock"), of Katz Media Group, Inc., a Delaware corporation (the
"Company"), each Stockholder, respectively, owning of record and/or
beneficially the number of shares of Company Common Stock set forth next to its
name on Annex A attached hereto and incorporated by reference herein (such
Stockholder's shares, together with any other voting or equity securities of
the Company hereafter acquired by such Stockholder prior to the termination of
this Agreement, being referred to collectively as the "Shares"); and
WHEREAS, concurrently with the execution of this Agreement,
Parents, Merger Sub and the Company, are entering into a Merger Agreement,
dated as of the date hereof (as amended from time to time, the "Merger
Agreement"), which provides, among other things, that, upon the terms and
subject to the conditions therein, Merger Sub will make a cash tender offer
(the "Offer") for all outstanding shares of Company Common Stock and will merge
with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Parents and
Merger Sub to enter into the Merger Agreement, Parent and Merger Sub have
requested that the Stockholders agree, and in order to induce Parent and Merger
Sub to enter into the Merger Agreement, the Stockholders have agreed, to enter
into this Agreement; and
WHEREAS, prior to the execution and delivery of this Agreement
by the parties hereto, the disinterested directors of and the entire Board of
Directors of the Company have approved the execution and delivery of this
Agreement and the terms hereof pursuant to Section 203 of the DGCL.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
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Section 1. Representations and Warranties of the
Stockholders. Each Stockholder represents and warrants to Parents and Merger
Sub, severally as to itself and with respect to its Shares, as follows:
(a) Such Stockholder is the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which definition will apply for all purposes of this
Agreement) of, and has good title to, all of its Shares, and there exist no
liens, claims, security interests, options, proxies, voting agreements, charges
or encumbrances of whatever nature ("Liens") affecting its Shares, except for
Liens created pursuant to the Shareholder Agreement, dated as of August 1,
1994, among the Stockholders and certain other parties thereto (as amended, the
"Stockholders Agreement").
(b) Assuming that Merger Sub acquired its
interest in the Shares in good faith and without notice of any adverse claim
(within the meaning of Section 8-302 of the Uniform Commercial Code as in
effect in the State of New York), upon the transfer to Merger Sub by such
Stockholder of its Shares upon consummation of the Offer or the Merger
(whichever is earlier), Merger Sub will acquire all of such Stockholder's
rights in such Stockholder's Shares, free of any adverse claim.
(c) Such Stockholder's Shares constitute all of
the shares of Common Stock beneficially owned, directly or indirectly, by such
Stockholder.
(d) The execution and delivery of this Agreement
by such Stockholder does not, and the performance by such Stockholder of its
obligations hereunder will not, constitute a violation of, conflict with,
result in a default (or an event which, with notice or lapse of time or both,
would result in a default) under, or result in the creation of any Lien on any
of such Stockholder's Shares under (i) any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which such Stockholder
is a party or by which such Stockholder is bound, (ii) any judgment, writ,
decree, order or ruling applicable to such Stockholder, or (iii) the
organizational documents of such Stockholder.
(e) Such Stockholder has full power and authority
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized and no other actions on the part of such
Stockholder. This Agreement has been duly and validly executed and delivered
by such Stockholder and, assuming due authorization, execution and delivery by
Parent and Merger Sub, constitutes a valid and binding agreement of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except to the extent that enforceability may be limited by applicable law.
(g) Neither the execution and delivery of this
Agreement nor the performance by such Stockholder of its obligations hereunder
will (i) violate any order, writ, injunction or judgment applicable to such
Stockholder or (ii) violate any law, decree, statute, rule or regulation
applicable to such Stockholder or require any consent, authorization or
approval of,
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filing with or notice to, any court, administrative agency or other
governmental body or authority, other than any required notices or filings
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act")
or the federal securities laws.
Section 2. Representations and Warranties of Parent.
Parents severally represent and warrant to the Stockholders as follows:
(a) Each Parent is (i) duly organized and validly
existing and in good standing under the laws of the State of Delaware, (ii) has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, and (iii) has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly
executed and delivered by each Parent and constitutes the legal, valid and
binding several obligation of each Parent, enforceable against each Parent in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, organization, insolvency, moratorium or other
laws affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law.
(b) The execution and delivery of this Agreement
by each Parent does not, and the performance by each Parent of its obligations
hereunder will not, constitute a violation of, conflict with, or result in a
default (or an event which, with notice or lapse of time or both, would result
in a default) under, its certificate of incorporation or bylaws or any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which each Parent is a party or by which each Parent is bound or
any judgment, writ, decree, order or ruling applicable to each Parent.
(c) Neither the execution and delivery of this
Agreement nor the performance by each Parent of its obligations hereunder will
violate any order, writ, injunction, judgment, law, decree, statute, rule or
regulation applicable to each Parent or require any consent, authorization or
approval of, filing with, or notice to, any court, administrative agency or
other governmental body or authority, other than any required notices or
filings pursuant to the HSR Act or the federal securities laws.
Section 3. Representations and Warranties of Merger Sub.
Merger Sub represents and warrants to the Stockholders as follows:
(a) Merger Sub is (i) duly organized and validly
existing and in good standing under the laws of the State of Delaware, (ii) has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, and (iii) has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly
executed and delivered by Merger Sub and constitutes the legal, valid and
binding obligation of Merger Sub, enforceable against Merger Sub in accordance
with its terms, except to the extent
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that enforceability may be limited by applicable bankruptcy, organization,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(b) The execution and delivery of this Agreement
by Merger Sub does not, and the performance by Merger Sub of its obligations
hereunder will not, constitute a violation of, conflict with, or result in a
default (or an event which, with notice or lapse of time or both, would result
in a default) under, its certificate of incorporation or bylaws or any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which Merger Sub is a party or by which Merger Sub is bound or any
judgment, writ, decree, order or ruling applicable to Merger Sub.
(c) Neither the execution and delivery of this
Agreement nor the performance by Merger Sub of its obligations hereunder will
violate any order, writ, injunction, judgment, law, decree, statute, rule or
regulation applicable to Merger Sub or require any consent, authorization or
approval of, filing with, or notice to, any court, administrative agency or
other governmental body or authority, other than any required notices or
filings pursuant to the HSR Act or the federal securities laws.
Section 4. Tender of Shares.
(a) During the term of this Agreement, each
Stockholder hereby agrees to tender and sell (and not withdraw) pursuant to and
in accordance with the terms of the Offer all of such Stockholder's Shares.
Upon the purchase of all Shares owned by a Stockholder pursuant to the Offer in
accordance with this Section 4(a), this Agreement shall terminate solely with
respect to such Stockholder. Notwithstanding the provisions of this Section
4(a), in the event any Stockholder withdraws such Stockholder's Shares from the
Offer for any reason or any such Shares are not purchased pursuant to the
Offer, such Shares shall remain subject to the terms of this Agreement. Each
Stockholder acknowledges that Merger Sub's obligation to accept for payment and
pay for the Shares in the Offer is subject to all the terms and conditions of
the Offer.
(b) Each Stockholder hereby agrees to permit
Parents and Merger Sub to publish and disclose in the Offer Documents and, if
approval of the stockholders of the Company is required under applicable law,
in the Proxy Statement, including all documents and schedules filed with the
SEC, its identity and ownership of Company Common Stock and the nature of its
commitments, arrangements and understandings under this Agreement.
Section 5. Transfer of the Shares. During the term of
this Agreement, except as otherwise provided herein, no Stockholder shall (a)
offer to sell, sell, pledge or otherwise dispose of or transfer any interest in
or encumber with any Lien any of such Stockholder's Shares, except for transfer
or sale to any affiliate of such Stockholder who agrees to be bound by this
Agreement, (b) deposit such Stockholder's Shares into a voting trust, enter
into a voting agreement or arrangement with respect to such Shares or grant any
proxy or power of attorney
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with respect to such Shares, or (c) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition
or sale, assignment or other disposition of or transfer of any interest in or
the voting of any shares of Company Common Stock or any other securities of the
Company.
Section 6. No Solicitation. During the term of this
Agreement, each Stockholder agrees, in its capacity as such, not to directly or
indirectly, initiate, solicit (including by way of furnishing information),
encourage or respond to or take any other action knowingly to facilitate, any
inquiries or the making of any proposal by any person or entity (other than
Parent or any affiliate of Parent) with respect to the Company that reasonably
may be expected to lead to a Takeover Proposal, or enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain any Takeover Proposal, or agree to or endorse any
Takeover Proposal, or authorize or permit any person or entity acting on behalf
of such Stockholder to do any of the foregoing. If any Stockholder receives
any Takeover Proposal, such Stockholder agrees to promptly notify Parent of
that inquiry or proposal and the details thereof.
Section 7. Waiver of Appraisal Rights. Each Stockholder
hereby irrevocably waives any rights of appraisal or rights to dissent from the
Merger that such Stockholder may have.
Section 8. Voting of Shares. During the term of this
Agreement, each Stockholder in its capacity as such hereby agrees to vote each
of its Shares at any annual, special or adjourned meeting of the stockholders
of the Company (a) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval and adoption of the terms
thereof and hereof; (b) against any action or agreement that would result in a
breach in any respect of any covenant, agreement, representation or warranty of
the Company under the Merger Agreement; and (c) against the following actions
(other than the Merger and the other transactions contemplated by the Merger
Agreement): (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or its
Subsidiaries; (ii) a sale, lease or transfer of a material amount of assets of
the Company or one of its Subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Company or its Subsidiaries; (iii) (A) any
change in a majority of the persons who constitute the board of directors of
the Company as of the date hereof; (B) any change in the present capitalization
of the Company or any amendment of the Company's certificate of incorporation
or bylaws, as amended to date; (C) any other material change in the Company's
corporate structure or business; or (D) any action that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
adversely affect the Merger and the other transactions contemplated by this
Agreement and the Merger Agreement.
Section 9. Enforcement of the Agreement. Each
Stockholder acknowledges that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
Merger Sub will be entitled (i) to an injunction or injunctions to prevent
breaches of this Agreement and (ii) to specifically enforce the terms and
provisions hereof in any
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court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which it is entitled at law or in equity.
Section 10. Adjustments. The number and type of
securities subject to this Agreement will be appropriately adjusted in the
event of any stock dividends, stock splits, recapitalizations, combinations,
exchanges of shares or the like or any other action that would have the effect
of changing any Stockholder's ownership of the Company's capital stock or other
securities.
Section 11. Termination. This Agreement will terminate
on the earlier of (a) the purchase of all the Shares pursuant to the Offer in
accordance with Section 4 and (b) the date on which the Merger Agreement is
terminated in accordance with its terms. Notwithstanding the foregoing and any
such termination, in the event (A) the Stockholder disposes of its Shares in
breach of this Agreement or (B) the Merger Agreement is terminated (i) pursuant
to the provisions of Section 9(h) or (j) of the Merger Agreement and at any
time within twelve months of the date hereof a Stockholder or any of its
Affiliates disposes of any interest in the Shares to a party other than any
Affiliate of Stockholder, Parents or any of their Affiliates, or (ii) in any
other circumstance in which a fee is payable to Parents or Merger Sub under
Section 10.3(b)(i) of the Merger Agreement and at any time within twelve months
of the date hereof a Stockholder or any of its Affiliates disposes of any
interest in the Shares to a party other than any Affiliate of Stockholder,
Parents or any their Affiliates but while the circumstances described in
Section 10.3(b)(i)(A) are pending, then in each case of (A) or (B) such
Stockholder shall pay promptly following receipt by such Stockholder or any of
its Affiliates, to Parents as they jointly direct, (x) 100% of any
consideration received by it for such interest in such Shares so disposed that
exceeds $11.00 per share up to $13.00 per share and (y) 75% of any
consideration received by it for such interest in such Shares so disposed that
exceeds $13.00 per share. All terms hereof pertinent to this obligation shall
survive such termination.
Section 12. Expenses. All fees and expenses incurred by
any of the parties hereto shall be borne by the party incurring such fees and
expenses.
Section 13. Brokerage. Except as disclosed in the Merger
Agreement (including the Schedules thereto), each party represents and warrants
to the others that there are no claims for finder's fees or brokerage
commissions or other like payments in connection with this Agreement or the
transactions contemplated hereby, and each party agrees to indemnify and hold
harmless the other parties from and against any and all claims or liabilities
for finder's fees or brokerage commissions or other like payments incurred in
connection with the transactions contemplated hereby.
Section 14. Miscellaneous.
(a) All representations and warranties contained
herein shall survive for one (1) year after the termination hereof.
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(b) Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits thereof. No such
waiver, amendment or supplement shall be effective unless in writing signed by
the party or parties sought to be bound thereby. Any waiver by any party of a
breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any
other provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement or one or more sections hereof shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
(c) This Agreement contains the entire agreement
among Parent, Merger Sub and the Stockholders with respect to the subject
matter hereof, and supersedes all prior agreements among Parent, Merger Sub and
the Stockholders with respect to such matters. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon the
delivery of a written agreement executed by the parties hereto.
(d) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and performed in that state.
(e) Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of any federal or state court located within the
State of Delaware over any dispute arising out of or relating to this Agreement
and waives any objections which it may now or hereafter have to the laying of
the venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any state or federal court of competent jurisdiction in
the State of Delaware, and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in
any inconvenient forum. No suit, action or proceeding against a party hereto
with respect to this Agreement may be brought in any court, domestic or
foreign, or before any similar domestic or foreign authority other than in a
court of competent jurisdiction in the State of Delaware, and each party hereto
hereby irrevocably waives any right which it may otherwise have had to bring
such an action in any other court, domestic or foreign, or before any similar
domestic or foreign authority. Each of the parties hereto consents to process
being served by any party to this Agreement in any suit, action or proceeding
by the mailing of a copy thereof in accordance with the provisions of Section
14(g) hereof.
(f) The descriptive headings contained herein are
for convenience and reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) All notices and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by telecopy, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to a Stockholder to such Stockholder at the address listed
below such Stockholder's name on Annex A hereto.
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If to Parents or Merger Sub to:
Evergreen Media Corporation
433 East Las Colinas Boulevard
Suite 1130
Irving, Texas 75039
Attention: Scott K. Ginsburg
Chairman, President and Chief Executive Officer
Telecopier: (972) 432-0754
and to
Chancellor Broadcasting Company
12655 North Central Expressway
Suite 405
Dallas, Texas 75243
Attn: Steven Dinetz
Telecopy: (972) 239-0220
with a copy to:
Latham & Watkins
1001 Pennsylvania Avenue, N.W.
Suite 1300
Washington, D.C. 20004-2505
Attention: Eric L. Bernthal, Esq.
Telecopier: (202) 637-2201
or to such other address as any party may have furnished to the other parties
in writing in accordance herewith.
(h) This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one agreement.
(i) This Agreement is binding upon and is solely
for the benefit of the parties hereto and their respective successors, legal
representatives and assigns. Except as provided herein, neither this Agreement
nor any of the rights, interests or obligations under this Agreement may be
assigned by any of the parties hereto without the prior written consent of the
other parties, except that Merger Sub shall have the right to assign to either
Parent or any other direct or indirect wholly owned Subsidiary of either Parent
any and all rights and obligations of Merger Sub under this Agreement,
including the right to purchase Shares tendered by any
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Stockholder pursuant to the terms hereof and the Offer, provided that any such
assignment shall not relieve Merger Sub from any of its obligations hereunder.
(k) All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by either party shall not preclude the simultaneous or later exercise of any
other such right, power or remedy by such party.
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IN WITNESS WHEREOF, each of the parties hereto as caused this
Agreement to be duly executed as of the date first written above.
STOCKHOLDERS: DLJ MERCHANT BANKING PARTNERS, L.P.,
By: DLJ MERCHANT BANKING, INC.,
Managing General Partner
By:/s/ THOMPSON DEAN
--------------------------------
Name: Thompson Dean
Title: Managing Director
By: DLJ INTERNATIONAL PARTNERS, C.V.
By: DLJ MERCHANT BANKING, INC.,
Advisory General Partner
By:/s/ THOMPSON DEAN
------------------------
Name: Thompson Dean
Title: Managing Director
By: DLJ OFFSHORE PARTNERS, C.V.
By: DLJ MERCHANT BANKING, INC.,
Advisory General Partner
By:/s/ THOMPSON DEAN
------------------------
Name: Thompson Dean
Title: Managing Director
By: DLJ MERCHANT BANKING FUNDING, INC.
By:/s/ IVY DODES
--------------------------------
Name: Ivy Dodes
Title: Vice President
By: DLJ FIRST ESC, L.L.C.
By: DLJ LBO PLANS MANAGEMENT
CORPORATION
By:/s/ IVY DODES
------------------------
Name: Ivy Dodes
Title: Vice President
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PARENTS: EVERGREEN MEDIA CORPORATION
By:/s/ SCOTT K. GINSBURG
---------------------------------
Name: Scott K. Ginsburg
Title: Chairman of the Board,
President and Chief Executive
Officer
CHANCELLOR BROADCASTING COMPANY
By:/s/ ERIC C. NEUMAN
---------------------------------
Name: Eric C. Neuman
Title: Vice President
MERGER SUB: MORRIS ACQUISITION CORPORATION
By:/s/ SCOTT K. GINSBURG
---------------------------------
Name: Scott K. Ginsburg
Title: President and Chief Executive
Officer
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ANNEX A
Stockholder Number of
- ----------- ---------
Shares
- ------
DLJ Merchant Banking Partners, L.P. 3,133,989
277 Park Avenue
New York, New York 10172
DLJ International Partners, C.V. 1,406,735
John B. Gorsiraweg 6
Willemstad, Curacao
Netherlands Antilles
DLJ Offshore Partners, C.V. 81,562
John B. Gorsiraweg 6
Willemstad, Curacao
Netherlands Antilles
DLJ Merchant Banking Funding, Inc. 1,291,147
277 Park Avenue
New York, New York 10172
DLJ First ESC, L.L.C. 753,235
277 Park Avenue
New York, New York 10172
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