STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT, dated as of July 23, 1998 (this
"Agreement"), is made and entered into by and among Capstar Radio Broadcasting
Partners, Inc., a Delaware corporation ("Parent"), TBC Radio Acquisition Corp.,
a Delaware corporation and a direct wholly-owned subsidiary of Parent ("Sub"),
The Tomorrow Foundation, Inc. (the "Stockholder"), and, solely for purposes of
Sections 4(c), 5 and 9(b) of this Agreement, Triathlon Broadcasting Company, a
Delaware corporation (the "Company").
RECITALS
WHEREAS, concurrently herewith, Parent, Sub and the Company are
entering into an Agreement and Plan of Merger (as such agreement may hereafter
be amended from time to time, the "Merger Agreement"), pursuant to which Sub
will be merged with and into the Company (the "Merger"); capitalized terms used
but not defined herein and defined in the Merger Agreement have the respective
meanings ascribed to them in the Merger Agreement; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Stockholder agree, and the Stockholder
has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein and the
benefits to be received by the parties under the terms of the Merger Agreement,
the parties hereto, intending to be legally bound, hereby agree as follows:
AGREEMENTS
1. Definitions. For purposes of this Agreement:
(a) "Acquisition Proposal" shall mean any agreement, letter of
intent, proposal or offer (other than the transactions contemplated in the
Merger Agreement) involving the Company or any of its Subsidiaries for, or an
inquiry or indication of interest that reasonably could be expected to lead to:
(i) any merger, consolidation, share exchange, recapitalization,
reorganization, dissolution, liquidation, business combination or other similar
transaction with the Company or any of its Subsidiaries, (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of a material portion
of the assets of the Company and its Subsidiaries, taken as a whole, in a
single transaction or series of transactions or (iii) any tender offer or
exchange offer for all or any portion of the outstanding shares of capital
stock of the Company or any of its Subsidiaries or the filing of a registration
statement under the Securities Act of 1933 in connection therewith, but shall
not include the Merger Agreement or Second Transaction (as defined herein).
(b) "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with, such first Person.
(c) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of
the same securities by the same holder, securities Beneficially Owned by a
Person shall include securities Beneficially Owned by all other Persons (who
are Affiliates of such Person excluding officers and directors of the Company)
who together with such Person would constitute a "group" within the meaning of
Section 13(d)(3) of the Exchange Act.
(d) "Person" shall mean an individual, corporation, limited
liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity.
(e) "Shares" shall mean (i) shares of Class A Common Stock, par
value $.01 per share, of the Company, (ii) shares of Class B Common Stock, par
value $.01 per share, of the Company, (iii) shares of Class C Common Stock, par
value $.01 per share, of the Company, (iv) shares of Class D Common Stock, par
value $.01 per share, of the Company, (v) Depositary Shares each representing a
One-Tenth Interest in a share of 9% Mandatory Convertible Preferred Stock, par
value $.01 per share, of the Company, (vi) shares of 9% Mandatory Convertible
Preferred Stock, par value $.01 per share, of the Company and (vii) shares of
Series B Convertible Preferred Stock, par value $.01 per share, of the Company.
(f) "Stockholder's Shares" shall mean all Shares held of record or
Beneficially Owned by the Stockholder, whether currently issued or hereinafter
acquired and for the purposes of Section 3 of this Agreement shall also
include, without duplication, any securities convertible into, or exercisable
or exchangeable for, Shares, including without limitation any Options, Warrants
or SARs held of record or Beneficially Owned by the Stockholder.
(g) "Termination Date" shall mean the date that the Merger
Agreement has been terminated.
2. Provisions Concerning Shares. From and after the date of this
Agreement and ending as of the first to occur of the Effective Time or the
first anniversary of the Termination Date, at any meeting of the holders of one
or more class or series of Shares, however called, or in any other circumstance
upon which the vote, consent or other approval of holders of one or more class
or series of Shares is sought, the Stockholder shall vote (or cause to be
voted) the issued and outstanding Stockholder's Shares (and each class thereof)
entitled to vote thereon, and those Shares entitled to vote thereon for which
Stockholder has the right to vote pursuant to any voting trusts or agreements,
proxies, understandings or arrangements (which trusts or agreements, proxies,
understandings or arrangements are identified and described on Schedule A
hereto), (i) in favor of the Merger, the execution and delivery by the Company
of the Merger Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement and this Agreement and any
actions required in furtherance thereof and hereof, (ii) against any action or
agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other material obligation or
agreement of the Company under the Merger Agreement or this Agreement and (iii)
against the following actions (other than the Merger and the transactions
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contemplated by the Merger Agreement): (A) any Acquisition Proposal other than
an Acquisition Proposal with Parent or any Affiliate thereof and (B) to the
extent that such are intended to, or could reasonably be expected to, (1)
impede, interfere with, delay, postpone or materially adversely affect the
Merger or the transactions contemplated by the Merger Agreement or this
Agreement or (2) implement or lead to any Acquisition Proposal (other than an
Acquisition Proposal with Parent or any Affiliate thereof): (w) any change in a
majority of the persons who constitute the board of directors of the Company;
(x) any change in the present capitalization of the Company or any amendment of
the Company's Amended and Restated Certificate of Incorporation or Bylaws; (y)
any amendment to the Certificates of Designation with respect to the Series B
Preferred Stock or the Mandatory Preferred Stock; or (z) any other material
change in the Company's corporate structure or business; provided that if any
Second Transaction (as defined in Section 3(c) of this Agreement) provides for
Second Transaction Consideration (as defined in 3(c) of this Agreement) that is
less than the Current Transaction Consideration (as defined in Section 3(a) of
this Agreement), as such amounts shall be determined in accordance with Section
3 of this Agreement, then nothing herein shall require the Stockholder to vote
in favor of the Second Transaction. In addition to the other covenants and
agreements of the Stockholder provided for elsewhere in this Agreement, during
the above-described period the Stockholder shall not enter into any agreement
or understanding with any Person or entity the effect of which would be
inconsistent with or violate the provisions and agreements contained in this
Section 2. Nothing herein shall in any way restrict or limit the Stockholder
from taking any action in his capacity as a director or officer of the Company
or otherwise fulfilling his fiduciary obligations as a director and officer of
the Company.
3. Capture.
(a) In the event that any of the Stockholder's Shares are sold,
transferred, exchanged, canceled or disposed of in connection with or as a
result of any Acquisition Proposal that is in existence on or that otherwise
has been made prior to the first anniversary of the Termination Date (an
"Alternative Disposition") then, within five business days after the closing of
such Alternative Disposition, the Stockholder shall tender and pay to, or shall
cause to be tendered and paid to, the Parent, or its designee, in immediately
available funds, 100% of the Profit realized from such Alternative Disposition.
As used in this Section 3(a), "Profit" shall mean an amount equal to the
excess, if any, of (i) the Alternative Transaction Consideration over (ii) the
Current Transaction Consideration. As used in this Section 3, "Alternative
Transaction Consideration" shall mean all cash, securities, settlement or
termination amounts, notes or other debt instruments, and other consideration
received or to be received, directly or indirectly, by the Stockholder and his
Affiliates (excluding officers and directors of the Company and excluding any
Obligated Affiliate of Stockholder) in connection with or as a result of such
Alternative Disposition or any agreements or arrangements (including without
limitation any employment agreement (except a bonafide employment agreement
pursuant to which the Stockholder is required to devote, and under which
Stockholder in good faith intends to devote, substantially all of his business
time and effort to the performance of executive services for the Company in a
manner substantially similar to Stockholder's current employment arrangements
with the Company), consulting agreement, non-competition agreement,
confidentiality agreement, settlement agreement or release agreement) entered
into, directly or indirectly, by the Stockholder or his Affiliates (excluding
officers and directors of the Company and excluding any Affiliate of
Stockholder which is a party to a
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Stockholder Agreement (an "Affiliate SA") of even date herewith with Parent,
Sub and the Company in substantially the same form as this Agreement and which
obligates such Affiliate to deliver to Parent any Profit recovered by such
Affiliate as a stockholder of the Company (an "Obligated Affiliate")) as a part
of or in connection with the Alternative Disposition or associated Acquisition
Proposal. As used in this Agreement, "Current Transaction Consideration" shall
mean the sum of (x) all amounts to be received, directly or indirectly, by
Stockholder and his Affiliates (excluding officers and directors of the Company
and excluding any Obligated Affiliate of Stockholder) pursuant to Article II of
the Merger Agreement (without giving effect to any conversion of any shares of
Series B Preferred Stock listed in Part I of Schedule B hereto into shares of
Class A Common Stock or any other shares of capital stock of the Company for or
into which shares of Series B Preferred Stock may be exchanged or converted),
(y) all amounts, if any, to be received by Stockholder (including the amount of
indebtedness owed by Stockholder forgiven) pursuant to the Termination
Agreement (as in effect on the date hereof) and (z) all amounts, if any, to be
received by Stockholder and his Affiliates (excluding officers and directors of
the Company and excluding any Obligated Affiliate of Stockholder pursuant to
and/or upon termination of any Affiliate Relationship or other agreement to
which Stockholder or any Affiliate of Stockholder is a party and which is to be
terminated pursuant to Section 4.06 of the Merger Agreement.
(b) For purposes of determining Profits under this Section 3, (i)
all non-cash items shall be valued based upon the fair market value thereof as
determined by an independent expert selected by Parent and who is reasonably
acceptable to Stockholder, (ii) all deferred payments or consideration shall be
discounted to reflect a market rate of net present value thereof as determined
by the above-referenced independent expert, (iii) all contingent payments will
be assumed to have been paid and (iv) if less than all of the Stockholder's
Shares are subject to the Alternative Disposition or Second Transaction then
the Current Transaction Consideration shall be deemed to be an amount equal to
the Current Transaction Consideration multiplied by a fraction, the numerator
of which is the number of the Stockholder's Shares sold, transferred,
exchanged, canceled or disposed of in such Alternative Disposition or Second
Transaction and the denominator of which is the total number of the
Stockholder's Shares. In the event any contingent payments included in the
determination of Profits ultimately are not paid pursuant to an Alternative
Disposition, then Parent shall reimburse Stockholder for any amounts paid to
Parent hereunder in respect of such uncollected contingent payments promptly
after receipt of written notice of such non payment.
(c) Except for an increase made pursuant to Section 5.07 of the
Merger Agreement, in the event that after the date of this Agreement, the
amount of either the Common Stock Merger Consideration, the Mandatory Preferred
Merger Consideration, the consideration paid for the Series B Preferred Stock
or the consideration payable in respect of the Warrants, Options or SARs as
currently provided for in the Merger Agreement is increased (a "Second
Transaction"), then, as may be requested by Parent, (i) Stockholder shall, and
shall cause each of its Affiliates who Beneficially Own any of the
Stockholder's Shares to, either execute and deliver to Parent such documents or
instruments as may be necessary to waive the right to receive the amount of
such increase to the extent that such increase results in any Profit or (ii)
Stockholder shall tender and pay, or cause to be tendered and paid, to Parent,
or its designee, in immediately available funds 100% of the Profit realized
from such Second Transaction. As used in this Section 3(c), "Profit" shall mean
an amount equal to the excess, if any, of (y) the Second Transaction
Consideration over (z) the
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Current Transaction Consideration. As used in this Agreement, "Second
Transaction Consideration" shall mean all cash, securities, settlement or
termination amounts, notes or other debt instruments, and other consideration
received or to be received, directly or indirectly, by the Stockholder and his
Affiliates (excluding officers and directors of the Company and excluding any
Affiliate of Stockholder which is a party to a Stockholder Agreement of even
date herewith with Parent, Sub and the Company in substantially the same form
as this Agreement and which obligates such Affiliate to deliver to Parent any
Profit recovered by such Affiliate as a stockholder of the Company) in
connection with or as a result of the Second Transaction or any agreements or
arrangements (including, without limitation, any employment agreement (except a
bonafide employment agreement pursuant to which the Stockholder is required to
devote, and under which Stockholder in good faith intends to devote,
substantially all of his business time and effort to the performance of
executive services for the Company in a manner substantially similar to
Stockholder's current employment arrangements with the Company), consulting
agreement, non-competition agreement, confidentiality agreement, settlement
agreement or release agreement) entered into, directly or indirectly, by the
Stockholder or his Affiliates (excluding officers and directors of the Company)
with the Company as a part of or in connection with the Second Transaction.
(d) Notwithstanding the foregoing, for purposes of this Section 3,
Profit recovered by any Affiliate of Stockholder (other than an Obligated
Affiliate) which also is an Affiliate of an Obligated Affiliate of Stockholder
(a "Dual Affiliate") shall be taken into account only once, and shall not be
duplicated, in calculating Profit in this Section 3 and in Section 3 (or any
analogous section) in any Affiliate SA; and, absent any agreement among
Stockholder and any Obligated Affiliate, any Profit attributed to a Dual
Affiliate shall be allocated among Stockholder and all Obligated Affiliates of
such Dual Affiliate pro rata based on the total Profit, excluding Profit
attributable to the Dual Affiliate, of Stockholder and each other Obligated
Affiliate.
4. Covenants, Representations and Warranties.
(a) The Stockholder hereby represents, warrants and covenants to
Parent and Sub as follows:
(i) Ownership. The Stockholder is:
(A) the record and Beneficial Owner of the number of issued
and outstanding Shares as set forth in Column A of Part I of
Schedule A hereto, and, except as identified in Part I of
Schedule A hereto, no other Person is the Beneficial Owner of
such Shares;
(B) the Beneficial Owner, but not the record holder, of the
number of issued and outstanding Shares set forth in Column B
of Part I of Schedule A hereto, and the record holder of such
Shares beneficially owned by the Stockholder is set forth in
Part I of Schedule A hereto; and
(C) the record and Beneficial Owner of the Warrants,
Options and SARs set forth in Part II of Schedule A hereto, and
Part II of Schedule A
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accurately sets forth the series or class of Capital Stock
subject to such Warrants, Options and SARs and the exercise or
base price of such Warrants, Options and SARs.
As of the date of this Agreement, the Shares set forth on Part
I of Schedule A hereto constitute all of the issued and outstanding
Shares owned of record or Beneficially Owned by the Stockholder.
Except as otherwise set forth in Part I to Schedule A, the Stockholder
has sole power of disposition, sole power of conversion, sole power to
demand appraisal rights and sole power to vote upon and agree to all
of the matters set forth in this Agreement and the Merger Agreement,
in each case with respect to all of the Shares set forth on Part I of
Schedule A hereto, with no material limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and
the terms of this Agreement.
(ii) Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of the
Stockholder's obligations under this Agreement. This Agreement has
been duly and validly executed and delivered by the Stockholder and
constitutes a valid and binding agreement of the Stockholder,
enforceable against the Stockholder in accordance with its terms.
Except as disclosed in Part III of Schedule A hereto, there is no
beneficiary or holder of a voting trust certificate or other interest
of any trust of which the Stockholder is trustee whose consent is
required for the execution and delivery of this Agreement or the
consummation by the Stockholder of the transactions contemplated
hereby.
(iii) No Conflicts. Except for the filings by Stockholder on
Schedule 13D, or as described on Schedule B and subject to Section
4(a)(ix) of this Agreement, no filing with, and no permit,
authorization, consent or approval of, any state or federal public
body or authority is necessary for the execution of this Agreement by
the Stockholder and the consummation by the Stockholder of the
transactions contemplated hereby, except where the failure to obtain
such consent, permit, authorization, approval or filing would not
interfere with the Stockholder's ability to perform his obligations
hereunder, and none of the execution and delivery of this Agreement by
the Stockholder, the consummation by the Stockholder of the
transactions contemplated hereby or compliance by the Stockholder with
any of the provisions hereof shall (A) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which the
Stockholder is a party or by which the Stockholder or any of his
properties or assets may be bound, or (B) violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of his properties or assets, in
each such case except to the extent that any conflict, breach, default
or violation would not interfere with the ability of the Stockholder
to perform the obligations hereunder.
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(iv) No Encumbrances. Except (A) as required by Sections 2 and
3 of this Agreement, (B) for pledges or encumbrances created in
compliance with Section 4(a)(vi) of this Agreement, (C) Shares of
Class D Common Stock delivered to the Company upon conversion to Class
B Common Stock, at which time the shares of Class B Common Stock
issued upon such conversion shall constitute Stockholder's Shares and
(D) items listed in Part I of Schedule A hereto, at all times
thereafter during the term hereof, all of the Stockholder's Shares
(excluding Shares identified in Column B of Part I of Schedule A
hereto as Shares with respect to which Stockholder does not possess
sole power to dispose or direct the disposition) are, and will be as
of the Effective Time, held by the Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any liens, claims, understandings or
arrangements that do not limit or impair Stockholder's ability to
perform his obligations under this Agreement.
(v) No Solicitation. The Stockholder shall comply with the
terms of Section 4.02(a) of the Merger Agreement.
(vi) Restriction on Transfer, Proxies and Non-Interference.
From and after the date of this Agreement and ending as of the first
to occur of the Effective Time or the first anniversary of the
Termination Date, the Stockholder shall not, and shall cause each of
his Affiliates who Beneficially Own any of the Stockholder's Shares
not to, directly or indirectly, without the consent of Parent, in
respect of any Acquisition Proposal or otherwise: (A) offer for sale,
sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition
of, any or all of the Stockholder's Shares, or any interest therein,
(B) grant any proxies or powers of attorney, deposit any Stockholder's
Shares into a voting trust or enter into a voting agreement with
respect to any Stockholder's Shares, (C) enter into any agreement or
arrangement providing for any of the actions described in clause (A)
or (B) above or (D) take any action that could reasonably be expected
to have the effect of preventing or disabling the Stockholder from
performing the Stockholder's obligations under this Agreement;
provided, however, the Stockholder may, without the consent of Parent,
pledge or encumber all or any portion of the Stockholder's Shares in
connection with a bonafide lending transaction with any institutional
lender that is not entered into in connection with an Acquisition
Proposal, if such lending transaction provides that the lender shall
give Parent at least 15 business days prior notice before taking any
sale or foreclosure actions in respect of such pledged or encumbered
Stockholder's Shares and shall during such time period extend Parent,
or its designee, the right to cure, support, purchase or acquire the
loan secured by such pledge or encumbrance upon such terms as may be
mutually agreed upon. The Stockholder shall provide the Parent with
copies of all agreements evidencing the above required provisions.
(vii) Waiver of and Agreement Not to Assert Appraisal Rights.
The Stockholder hereby waives and agrees not to assert, and shall
cause any of its Affiliates who
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hold of record any of the Stockholder's Shares to waive and not
to assert, any appraisal rights with respect to the Merger (or any
Second Transaction) that the Stockholder or such Affiliate may now or
hereafter have with respect to any Shares or any other shares of
capital stock of the Company Stockholder holds of record at the time
that Stockholder may be entitled to assert appraisal rights with
respect to the Merger (or any Second Transaction), whether pursuant to
Section 262 of the Delaware General Corporate Law or otherwise.
(viii) Further Assurances. From time to time, at Parent's
request and without further consideration, the Stockholder shall
execute and deliver such additional documents as may be necessary or
desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
(ix) Conversion; Irrevocable Instructions. The Stockholder
hereby agrees to instruct the Company to convert 320,000 of
Stockholder's shares of Class D Common Stock into shares of Class B
Common Stock on the first date thereafter on which shares of Class D
Common Stock become convertible into shares of Class B Common Stock
under the terms of Section 4.2(f)(iii)(B) of the Restated Certificate.
The Stockholder hereby agrees to execute and deliver a notice in
substantially the form of Exhibit A hereto, together with such other
documents and instruments as provided in Section 4.2(f)(iv) of the
Restated Certificate or as otherwise may be necessary to effect such
conversion. The Stockholder hereby agrees to cooperate with the
Company in its efforts to obtain, as necessary, the grant of the FCC
Form 316 Application and to execute and deliver such other documents
or make such other assurances as reasonably may be required for such
purpose. The Stockholder further agrees during the term of this
Agreement not to convert any of Stockholder's shares of Class D Common
Stock or Class B Common Stock into shares of Class A Common Stock.
(x) Waiver of Rights of First Refusal. Schedule A hereto
contains a complete list of all rights of first refusal (or similar
rights) held by the Stockholder and any of his, her or its Affiliates
to purchase Shares upon transfer (collectively, "Rights of First
Refusal"). From and after the date of this Agreement and ending as of
the first to occur of the Effective Time or the first anniversary of
the Termination Date, the Stockholder shall not, and shall cause each
of his, her or its Affiliates who hold Rights of First Refusal not to,
directly or indirectly without the consent of Parent in respect of the
Merger, any Acquisition Proposal, any Second Transaction or otherwise,
exercise any of such Rights of First Refusal to purchase Shares.
(xi) Waiver of and Agreement Not to Exercise Conversion Rights.
Stockholder hereby waives any rights that Stockholder may have to
convert, and agrees not to convert, any shares of Series B Preferred
Stock held of record or Beneficially Owned by Stockholder into shares
of Class A Common Stock (or any other shares of capital stock of the
Company for or into which the Series B Preferred Stock from time to
time may be exchangeable or convertible);
(xii) Waiver of Default; Release. Stockholder hereby waives any
default by the Company that may hereafter arise in the event the
Company fails to redeem any shares
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of Series B Preferred Stock as may be required to be redeemed pursuant
to paragraph (h) of the Certificate of Designation of Series B
Convertible Preferred Stock of Triathlon Broadcasting Company, as
amended (the "Series B Designation"), and, during the effectiveness of
this Agreement, and at all times from and after the Effective Time if
the Effective Time shall occur, agrees to forbear from taking or
instituting any actions against the Company for any failure to comply
with the provisions of paragraph (h) of the Series B Designation.
Effective as of the Effective Time, Executive hereby releases and
discharges the Company from all Claims related to, arising from, or
attributed to paragraph (h) of the Series B Designation or the
Company's failure to comply with any provision thereof at any time at
or prior to the Effective Time and, as of the Effective Time,
Stockholder agrees to execute and deliver to the Company a waiver and
release substantially identical in substance to this Section
4(a)(xii).
(b) Parent and Sub hereby represent, warrant and covenant to the
Stockholder as follows:
(i) Organization, Standing and Corporate Power. Each of
Parent and Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with
adequate corporate power and authority to own its properties and carry
on its business as presently conducted. Each of Parent and Sub has the
corporate power and authority to enter into and perform all of its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(ii) No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any state or federal public
body or authority is necessary for the execution of this Agreement by
either Parent or Sub and the consummation by Parent and Sub of the
transactions contemplated hereby, except where the failure to obtain
such consent, permit, authorization, approval or filing would not
interfere with its ability to perform its obligations hereunder, and
none of the execution and delivery of this Agreement by Parent or Sub,
the consummation by Parent or Sub of the transactions contemplated
hereby or compliance by Parent and Sub with any of the provisions
hereof shall (A) conflict with or result in any breach of any
applicable organizational documents applicable to Parent or Sub, (B)
result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which Parent or Sub is a party or by which
Parent or Sub or any of Parent's or Sub's properties or assets may be
bound or (C) violate any order, writ, injunction, decree, judgment,
order, statute, rule or regulation applicable to Parent or Sub or any
of Parent's or Sub's properties or assets, in each such case except to
the extent that any conflict, breach, default or violation would not
interfere with the ability of Parent or Sub to perform its obligations
hereunder.
(iii) Execution, Delivery and Performance by Parent and Sub.
The execution, delivery and performance of this Agreement and the
consummation of the
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transactions contemplated hereby have been duly authorized by the
Boards of Directors of Parent and Sub, and each of Parent and Sub has
taken all other actions required by law, its Certificate of
Incorporation and its Bylaws to consummate the transactions
contemplated by this Agreement. This Agreement constitutes the valid
and binding obligations of Parent and Sub and is enforceable in
accordance with its terms, except as enforceability may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally.
(c) The Company hereby represents and warrants to Parent and Sub
that the Board of Directors of the Company has approved the terms of this
Agreement and the transactions contemplated herein and such approval is
sufficient to render inapplicable to this Agreement and the transactions
contemplated herein the provisions of Section 203 of the Delaware General
Corporation Law.
5. Stop Transfer. From and after the date of this Agreement and ending
as of the first to occur of the Effective Time or the first anniversary of the
Termination Date, Stockholder will not request that the Company register (and
the Company agrees not to register) the transfer (book-entry or otherwise) of
any certificate or uncertificated interest representing any of the
Stockholder's Shares (excluding shares identified in Column B of Part I of
Schedule B hereto as Shares with respect to which Stockholder does not possess
sole power to dispose or direct the disposition), except as contemplated by
Sections 4(a)(vi) and 4(a)(ix) of this Agreement or as otherwise contemplated
hereby.
6. Recapitalization. In the event of a stock dividend or distribution,
or any change in the Shares (or any class thereof) by reason of any split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall include, without limitation, all such stock dividends and
distributions and any shares into which or for which any or all of the Shares
(or any class thereof) may be changed or exchanged as may be appropriate to
reflect such event.
7. Stockholder Capacity. Except as set forth in Section 4(a)(v) of
this Agreement, the Stockholder does not make any agreement or understanding
herein in the Stockholder's capacity as a director or officer of the Company
and nothing herein shall limit or affect any action taken by the Stockholder in
such capacity.
8. Merger Agreement and Options. The Stockholder hereby consents and
agrees to the cancellation or treatment of each share of Preferred Stock, each
Warrant, Option or SARs Beneficially Owned by Stockholder or its Affiliates as
set forth in Article II of the Merger Agreement.
9. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
10
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto; provided that all of the provisions of this Agreement other than
Sections 4(c), 5 and this Section 9(b) may be amended without the consent of
the Company.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram,
telex or telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be delivered to
the respective parties at the following addresses or the addresses set forth on
the signature pages hereto:
If to Stockholder: The Tomorrow Foundation, Inc.
SFX Entertainment, Inc.
650 Madison Avenue
New York, New York 10022
Telecopy: (212) 753-3188
copy to: Howard J. Tytel
SFX Entertainment, Inc.
650 Madison Avenue
New York, New York 10022
Telecopy: (212) 753-3188
If to the Company: Triathlon Broadcasting Company
750 B Street, Suite 1920
San Diego, California 92101
Telecopy: (619) 239-4270
Attn: Norman Feuer
copy to: Baker & McKenzie
Two Allen Center, Suite 1200
1200 Smith Street
Houston, Texas 77002
Telecopy: (713) 427-5014
Attn: Amar Budarapu
If to Parent or Sub: Capstar Broadcasting Corporation
600 Congress Avenue, Suite 1400
Austin, Texas 78701
Attn: William S. Banowsky, Jr.
Telecopy: (512) 340-7890
copy to: Vinson & Elkins L.L.P.
11
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Attn: Michael D. Wortley
Telecopy: (214) 220-7716
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(d) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(e) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by the Stockholder of any covenants or
agreements contained in this Agreement will cause the Parent and Sub to sustain
damages for which they would not have an adequate remedy at law for money
damages, and therefore each of the parties hereto agrees that in the event of
any such breach the Parent or Sub shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief, without the necessity of posting bond or proving actual damages, in
addition to any other remedy to which they may be entitled, at law or in
equity.
(f) Remedies Cumulative. 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 any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(g) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by
such party of its right to exercise any such or other right, power or remedy or
to demand such compliance.
(h) No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any person or entity
who or which is not a party hereto; provided that, in the event of the
Stockholder's death, the benefits and obligations of the Stockholder hereunder
shall inure to and be binding upon his successors, heirs, legal
representatives, administrators and executors.
(i) Governing Law. This Agreement shall be governed by and
construed in
12
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(j) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph and shall
not be deemed to be a general submission to the jurisdiction of said Court or
in the State of Delaware other than for such purposes. Each party hereto hereby
waives any right to a trial by jury in connection with any such action, suit or
proceeding.
(k) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement. This Agreement shall not
be effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
(m) Trust Funds. In the event that any party hereto should
receive any funds that are to be paid to another party pursuant to the terms of
this Agreement, then the receiving party shall hold such funds in trust for the
benefit of the party entitled to receive such funds and shall promptly pay such
funds to the party entitled to receive such funds in accordance with this
Agreement.
10. Termination. This Agreement shall terminate without any further
action on the part of any party hereto upon the occurrence of a termination of
the Merger Agreement pursuant to Section 7.01(a), Sections 7.01(b)(ii),
7.01(b)(iii) or 7.01(b)(iv) thereof in respect of which the Company is entitled
to request a release of the Letter of Credit, Sections 7.01(b)(v), 7.01(b)(vi),
7.01(c) or 7.01(f). Upon such termination, this Agreement shall forthwith
become void and of no further force or effect.
[Signature page follows]
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on this 23rd day of July, 1998.
THE TOMORROW FOUNDATION, INC.
By: /s/ Laura B. Sillerman
--------------------------------
Name: Laura B. Sillerman
------------------------------
Title: President
-----------------------------
CAPSTAR RADIO BROADCASTING
PARTNERS, INC.
By: /s/ William S. Banowsky, Jr.
--------------------------------
William S. Banowsky, Jr.
Vice President
TBC RADIO ACQUISITION CORP.
By: /s/ William S. Banowsky, Jr.
--------------------------------
William S. Banowsky, Jr.
Vice President
TRIATHLON BROADCASTING COMPANY
By: /s/ Norman Feuer
--------------------------------
Name: Norman Feuer
------------------------------
Title: President / CEO
-----------------------------
SCHEDULE A THE TOMORROW FOUNDATION, INC.
PART I. SHARES
A B
RECORD AND
BENEFICIALLY OWNED BENEFICIALLY OWNED(1)
------------------ ---------------------
Class A Common Stock - 0 - - 0 -
Class B Common Stock - 0 - - 0 -
Class C Common Stock - 0 - - 0 -
Class D Common Stock 1,000,000 - 0 -
Series B Convertible
Preferred Stock - 0 - - 0 -
9% Mandatory Convertible
Preferred Stock - 0 - - 0 -
PART II. DERIVATIVES
NO. OF CLASS OF EXERCISE/
SHARES SHARES BASE PRICE
------ ------ ----------
Warrants - 0 - - 0 - - 0 -
Options - 0 - - 0 - - 0 -
SARs - 0 - - 0 - - 0 -
PART III. INTEREST REQUIRING CONSENT (SS. 4(A)(II))
- ---------------
(1) Excluding the rights in shares described in Part II and shares of
capital stock of the Company into which the shares described in Part I
may be converted in accordance with the terms thereof.