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EXHIBIT 2.44
AMENDMENT NO. 1
TO
AGREEMENT DATED FEBRUARY 20, 1998
This Amendment No. 1 (the "Amendment") to the Agreement, dated
February 20, 1998 (the "Agreement"), between Chancellor Media Corporation of Los
Angeles ("Chancellor") and Capstar Broadcasting Corporation ("Capstar"), is
entered into this 19th day of May, 1998. Capitalized terms used herein without
definition shall have the meanings given such terms in the Agreement.
1. Section 2 of the Agreement, Purchase and Sale of KKPN(FM), is
modified and amended by adding the following sentence to the end of Section
2(c):
Any amount of the sale price for KKPN-FM in excess of the KKPN
Capstar Price (after deducting any brokerage commission payable
with respect to the sale of KKPN-FM) shall be divided equally
between Chancellor and Capstar, with Chancellor's portion
representing a commission payable by Capstar to Chancellor.
2. Section 3 of the Agreement, Long Island, is modified and amended
by modifying the first sentence of Section 3 to read as follows:
Chancellor and Capstar agree that the Asset Exchange Agreement
between SFX and Chancellor dated July 1, 1996 (the
"Chancellor-SFX AEA"), providing for the exchange of SFX's Long
Island radio stations (WBLI-FM, WBAB-FM, WGBB(AM) and WHFM-FM)
(the "SFX Long Island Stations"), and the related Time Brokerage
Agreement between SFX and Chancellor, dated July 1, 1996, as
amended (the "Chancellor-SFX TBA"), providing for the sale to
Chancellor of substantially all of the programming time
available on the SFX Long Island Stations, shall each be
terminated at the closing of the Capstar-SFX Merger.
3. Section 10 of the Agreement, Note, is modified and amended in
its entirety to read as follows:
In connection with the Transaction, Chancellor will, upon the
occurrence of the conditions set forth in the term sheet
attached hereto and by this reference made a part hereof (the
"Loan Term Sheet"), provide a loan to Capstar of up to $250
million immediately prior to the closing of the Capstar-SFX
Merger (which loan may be reduced to $200 million if certain
conditions specified in the Loan Term Sheet are satisfied). The
obligations of Capstar under such loan will be evidenced by a
note (the "Note"), which will have the essential terms set forth
in the Loan Term Sheet.
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4. Section 1 of the Loan Term Sheet, Security, is modified and
amended in its entirety to read as follows:
12% Senior Secured Term Note (the "Note").
5. Section 4 of the Loan Term Sheet attached to the Agreement,
Interest, is modified and amended by adding the following new paragraph
immediately after the second paragraph in such Section and immediately prior to
the third paragraph in such Section:
If Capstar shall not have completed acquisitions during the
Exchange Period (excluding the Jacksonville Exchange and the
acquisition of the Austin Stations) (x) with an aggregate
purchase price of $100 million by the first anniversary of the
issue date of the Note, (y) with an aggregate purchase price of
$200 million by the end of the second anniversary of the issue
date of the Note, and (z) with an aggregate purchase price of
$300 million by the end of the third anniversary of the issue
date of the Note, in each case, that are subject to the
procedures described in Section 1 of this Letter Agreement
(each, an "Annual Acquisition Shortfall"), the interest rate on
the Note for the 365 day period in which such Annual Acquisition
Shortfall occurs shall increase to the Increased Rate, of which
6/7 shall be payable in cash and 1/7 shall, at Capstar's option,
either be payable in cash or added to the principal amount of
the Note. To the extent that any amount not paid in cash is so
added to the principal amount, such amount shall bear interest
at the rate otherwise applicable to the principal amount. The
Increased Rate shall apply from the beginning of the 365 day
period in which such Annual Acquisition Shortfall occurs through
the end of such period.
6. Section 5 of the Loan Term Sheet attached to the Agreement,
Amount at Initial Issuance, is modified and amended in its entirety to read as
follows:
Aggregate commitment at initial issuance of $250 million;
provided, that if (i) the actual initial public offering price
per share of Capstar's common stock sold in Capstar's initial
public offering (the "Capstar IPO") is greater than or within
the offering price range specified in the final "red ▇▇▇▇▇▇▇"
prospectus for the Capstar IPO and (ii) Capstar's sales (with
any contribution to a back-up trust not being deemed to be a
sale hereunder) of KKPN-FM and the SFX Long Island Stations are
consummated at or prior to the consummation of the Capstar-SFX
Merger (together, the "Loan Decrease Conditions"), then the
aggregate commitment at initial issuance shall be up to a
maximum amount of $200 million (such commitment to be determined
at Capstar's discretion, provided, that Capstar provide
Chancellor two (2) business days prior written notice of such
commitment prior to the consummation of the Capstar-SFX Merger).
If the Loan Decrease Conditions are satisfied, Capstar agrees
that it will use any and
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all net proceeds ("Green Shoe Proceeds") resulting from the
exercise of the overallotment option that is granted by Capstar
to the underwriters for the Capstar IPO to prepay amounts
outstanding under the Note; provided, that Capstar shall only be
required to prepay amounts outstanding under the Note with Green
Shoe Proceeds so that, immediately following such prepayment,
$150 million principal amount of the Note remains outstanding
(it being understood that if such Green Shoe Proceeds are not
adequate to prepay the Note so that $150 million principal
amount of the Note remains outstanding, Capstar shall use all
Green Shoe Proceeds to prepay the Note). Such prepayment shall
be made within thirty (30) days of the date that the Capstar-SFX
Merger is consummated.
7. Section 7 of the Loan Term Sheet attached to the Agreement,
Ranking, is modified and amended in its entirety to read as follows:
Pari passu with the guarantee to be issued by Capstar of the
obligations under the senior credit agreement of Capstar Radio
Broadcasting Partners, Inc. (the "Capstar Senior Credit
Agreement"), provided, that in lieu of subordination of the Note
to the guarantee by Capstar of the obligations under the Capstar
Senior Credit Agreement, Chancellor shall agree to provide
reasonable prior written notice to Capstar and to the
administrative agent under the Capstar Senior Credit Agreement
if a default under the Note exists as a result of which
Chancellor intends to accelerate the obligations under the Note.
8. Section 9 of the Loan Term Sheet attached to the Agreement,
Capstar Prepayment Obligations, is modified and amended in order to add a new
paragraph at the end of such section, to read as follows:
In the event that the Loan Decrease Conditions are not
satisfied, Capstar agrees that it will not, and Capstar shall
cause its subsidiaries not to, enter into or consummate any
transactions (other than transactions pending as of May 4, 1998
and transactions pursuant to Exchange Station Agreements) until
such time as Capstar has prepaid amounts outstanding under the
Note so that, following such prepayments, $150 million principal
amount of the Note remains outstanding (such amount not to
include any prepayments that may be required to be made by
Capstar as a result of any other provision of the Loan Term
Sheet).
9. Section 10 of the Loan Term Sheet attached to the Agreement,
Security for Capstar's Prepayment Obligations; Guarantee, is modified and
amended in its entirety to read as follows:
Senior perfected pledge by Capstar of common stock of Capstar
Broadcasting Partners, Inc. (100%). Chancellor acknowledges that
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Capstar will provide a subordinated pledge of common stock of
Capstar Broadcasting Partners, Inc. to the lenders under the
Capstar Senior Credit Agreement in support of the obligations of
Capstar Radio Broadcasting Partners, Inc. thereunder.
10. The first paragraph of Section 11 of the Loan Term Sheet
attached to the Agreement, Covenants, is modified and amended to read as
follows:
Debt Incurrence. Capstar and its subsidiaries will not be
permitted, directly or indirectly, to incur create, assume,
guarantee, acquire or become liable for indebtedness except in
compliance with a 9.0:1 consolidated indebtedness to trailing
four-quarter EBITDA ratio. The aggregate liquidation preference
of all preferred stock of Capstar and its consolidated
subsidiaries shall be counted as indebtedness. The debt
incurrence calculations will be made in a manner consistent with
leverage ratio calculations (including pro forma adjustments)
under the Capstar Senior Credit Agreement, provided, that for
purposes of calculating leverage ratios hereunder, Capstar shall
be entitled during 1998 to include in its EBITDA calculations at
least $10 million in net revenues from The AMFM Network (whether
or not such amounts are actually received), or such higher
amount if the net revenues actually received by Capstar from The
AMFM Network exceed such amounts. Borrowings under working
capital lines of credit of Capstar and its subsidiaries shall
not count as debt, except to the extent that the aggregate
borrowings under such lines of credit exceed $50 million.
11. As contemplated by the Letter Agreement, Capstar and Chancellor
will complete a series of asset exchanges and/or purchases in which Capstar will
exchange certain SFX broadcast properties to be acquired or paid for by
Chancellor. As purchaser of substantially all of the assets used by SFX in its
ownership and operation of radio stations in the Houston and Pittsburgh markets
(other than KKPN-FM in Houston and WTAE-AM in Pittsburgh), Chancellor agrees to
be bound by the provisions of the Final Judgment in United States of America ▇.
▇▇▇▇▇, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, Capstar Broadcasting, Inc. and SFX
Broadcasting, Inc. (the "Final Judgment") as required by paragraph III(B) of
that Final Judgment. Chancellor also agrees to provide sufficient prior notice
to HMTF concerning any transactions that it may enter into regarding radio
stations in the Greenville Area, the Houston Area, the ▇▇▇▇▇▇▇ Area, the
Pittsburgh Area or the Nassau-Suffolk Area (as such terms are defined in the
Final Judgment) that are not presently owned, operated or controlled by
Chancellor, Capstar, SFX or HMTF, as will allow HMTF to satisfy its notice
obligations to the United States Department of Justice under paragraph X(E) of
the Final Judgment.
12. The amendments set forth in Sections 1, 2, 5 and 11 above shall
become effective immediately upon execution by both parties hereto. The
amendments set forth in Sections 3, 4, 6, 7, 8, 9 and 10 above shall be
conditioned on the consummation of the Capstar IPO simultaneously with or prior
to the Capstar-SFX Merger. If the Capstar IPO is not
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consummated simultaneously with or prior to the consummation of the Capstar-SFX
Merger, then the amendments set forth in Sections 3, 4, 6, 7, 8, 9 and 10 above
shall be void and have no force and effect.
13. Except for the amendments set forth above, the text of the
Agreement shall remain unchanged.
14. This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same instrument.
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In witness whereof, the parties have duly executed and delivered
this Amendment as of the date first written above.
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Financial Officer
CAPSTAR BROADCASTING CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Vice President
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