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SCHEDULE 14C
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ ] Definitive Information Statement
CUMULUS MEDIA INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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CUMULUS MEDIA INC.
3535 PIEDMONT ROAD
BUILDING 14
14TH FLOOR
ATLANTA, GEORGIA 30305
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR YOUR PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
INTRODUCTION
This Information Statement is being furnished by the Board of Directors
of Cumulus Media Inc., an Illinois corporation (the "Company"), to the holders
of the Company's Class A Common Stock, par value $.01 per share ("Class A Common
Stock"), in connection with the recent adoption of an Amended and Restated
Statement of Resolutions Fixing Terms of Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and Qualifications, Limitations
and Restrictions of the 12% Series B Cumulative Preferred Stock of the Company
(the "Amended and Restated Statement").
On September 23, 2000 the Company's Board of Directors (the "Board")
approved the Amended and Restated Statement. The purpose of the Amended and
Restated Statement was to modify the terms and conditions of the Company's 12%
Series B Cumulative Preferred Stock (the "Series B Preferred Stock"). A summary
description of the Series B Preferred Stock is set forth below, and the text of
the Amended and Restated Statement is included as Annex A to this Information
Statement The approval of the Amended and Restated Statement was approved
pursuant to an action taken by written consent of the holders of a majority of
the Class A Common Stock and of the Class C Common Stock, par value $.01 per
share (the "Class C Common Stock"), voting together as a single class, which was
executed and effective as of October 2, 2000. The Amended and Restated Statement
was also approved by the holders of a majority of the Company's Class B Common
Stock, effective as of October 2, 2000. At the time that the Amended and
Restated Statement was approved, there were 12,000 shares of Series B Preferred
Stock authorized, none of which were issued and outstanding. The Amended and
Restated Statement was filed with the Office of the Secretary of State of the
State of Illinois, and became effective, on October 2, 2000. Accordingly, the
Company is not seeking written consents from any of its other shareholders.
Please be advised, therefore, that this Information Statement is only sent for
your informational purposes. We are not asking you for a proxy and you are not
requested to send us a proxy.
This Information Statement is first being sent or given to shareholders
on November [____], 2000. The Company will pay the expenses of preparing,
assembling and mailing this Information Statement to its shareholders.
ACTION BY WRITTEN CONSENT
Pursuant to Section 7.10 of the Illinois Business Corporation Act (the
"IBCA"), any action that may be taken at a meeting of shareholders may also be
taken without a meeting and without a vote if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Section 7.10 further provides that if such consent is
signed by less than all of the shareholders entitled to vote, then such consent
shall become effective only if at least five days prior to the execution of the
consent a notice in writing is delivered to all shareholders entitled to vote on
the matter and, after the effective date of the consent, prompt notice of the
taking of the action without a meeting by less than unanimous written consent is
delivered to those shareholders who have not consented in writing.
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With respect to approving the Amended and Restated Statement, the
affirmative vote of the holders of (i) a majority of the outstanding shares of
the Class A Common Stock and Class C Common Stock, voting together as a single
class, and (ii) a majority of the shares of Class B Common Stock, par value $.01
per share (the "Class B Common Stock"), eligible to exercise consent rights
under the terms of such stock, is sufficient to effectuate such action. In
accordance with Section 7.10 of the IBCA, on September 25, 2000, the Company
mailed a written notice to all holders of shares of the Company's capital stock
as of September 22, 2000. That notice described the action that was proposed to
be taken by less than unanimous written consent, and included a copy of the
Amended and Restated Statement. On October 7, 2000, following the effective date
of the written consent approving the Amended and Restated Statement, the Company
mailed a written notice informing all shareholders as of October 6, 2000 that
the proposed action had been taken. Under the IBCA, shareholders are not
entitled to any dissenters' rights of appraisal in connection with the approval
or the filing of the Amended and Restated Statement.
AUTHORIZED CAPITAL STOCK
Pursuant to the Company's Amended and Restated Articles of
Incorporation (the "Articles"), the Company's authorized capital stock consists
of: (i) 100,000,000 shares of Class A Common Stock, (ii) 20,000,000 shares of
Class B Common Stock, (iii) 30,000,000 shares of Class C Common Stock and (iv)
262,000 shares of preferred stock, $.01 par value per share ("Preferred Stock").
Authorized shares of Preferred Stock may be issued from time to time by the
Board, without shareholder approval, in one or more series. Subject to the
provisions of the Articles and certain limitations prescribed by law, the Board
is expressly authorized to adopt resolutions to issue the authorized shares of
Preferred Stock, to fix the number of shares and to provide for the voting
powers, designations, preferences and relative participating, optional or other
special rights, qualifications, limitations or restrictions thereof, including
dividend rights (including whether dividends are cumulative), dividend rates,
terms of redemption (including sinking fund provisions), redemption prices,
conversion rights and liquidation preferences of the shares constituting any
class or series of preferred stock, in each case without any further action or
vote by the shareholders.
Pursuant to resolutions previously adopted by the Board, the Board had
established (i) a series of Preferred Stock consisting of 250,000 shares
designated as 13-3/4% Series A Cumulative Exchangeable Redeemable Preferred
Stock Due 2009 (the "Series A Preferred Stock") and (ii) a series of Preferred
Stock consisting of 12,000 shares designated as 12% Series B Cumulative
Preferred Stock (the "Series B Preferred Stock").
SERIES B PREFERRED STOCK
Set forth below is a summary description of the terms and conditions of
the Series B Preferred Stock, as set forth in the Amended and Restated
Statement. The following summary is qualified by reference to the Amended and
Restated Statement, which is included as Annex A to this Information Statement.
General. There are 12,000 shares of Series B Preferred Stock
authorized, with a liquidation preference of $10,000 per share, of which no
shares were issued and outstanding prior to October 2, 2000. Effective October
2, 2000, the Company issued 250 shares of Series B Preferred Stock, all of which
are issued and outstanding as of the date hereof.
Ranking. The Series B Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, dissolution or winding up
of the Company, rank senior to all Common Stock and all other classes or series
of capital stock issued subsequent to the initial issuance of shares of Series B
Preferred Stock and not expressly providing for parity in ranking with the
Series B Preferred Stock. The Series B Preferred Stock will rank on parity with
existing Preferred Stock not expressly junior to the Series B Preferred Stock
and any subsequently-issued capital stock expressly on parity with the Series B
Preferred Stock. Consequently, the Series B Preferred Stock ranks on parity with
the Series A Preferred Stock.
Dividends. The holders of the Series B Preferred Stock are entitled to
receive cumulative dividends at an annual rate equal to 12% of the liquidation
preference per share of the Series B Preferred Stock, payable quarterly, in
arrears. The Company may, at its option, pay dividends in cash or in additional
shares of Series B Preferred Stock having a liquidation preference equal to the
amount of such dividends. The annual dividend rate of the Series B Preferred
Stock shall be adjusted from 12% to 17% in the event the Company violates
certain covenants set forth
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in the Amended and Restated Statement. The Company may not declare or pay
dividends on any security on parity with or junior to the Series B Preferred
Stock unless full cumulative dividends are declared or paid on the Series B
Preferred Stock.
Redemption. The shares of Series B Preferred Stock are subject to
mandatory redemption on October 3, 2009, at a price equal to 100% of the
liquidation preference thereof plus any and all accrued and unpaid cumulative
dividends thereon. The Series B Preferred Stock may be redeemed at any time, in
whole or from time to time in part, at the option of the Company at a price
equal to 100% of the liquidation preference thereof plus any and all accrued and
unpaid cumulative dividends thereon, to the date of redemption. In the event of
a change of control, the Company must offer to redeem the outstanding shares of
the Series B Preferred Stock at a price in cash equal to 101% of the liquidation
preference of the Series B Preferred Stock, together with all accumulated and
unpaid dividends.
Voting. The holders of the shares of the Series B Preferred Stock have
no voting rights with respect to general corporate matters except that the
holders of a majority of the then outstanding Series B Preferred Stock, voting
as a class, may elect two directors to our Board of Directors in the event of
(i) a failure to pay dividends on the Series B Preferred Stock for four
consecutive quarters, (ii) a failure to discharge a redemption obligation with
respect to the Series B Preferred Stock, (iii) a failure to offer to purchase
the outstanding shares of Series B Preferred Stock following a change of
control, (iv) a violation of certain covenants after the expiration of
applicable grace periods, all as set forth in the Amended and Restated
Statement, or (v) a default in the payment of principal, premium or interest on
the Company's indebtedness or that of certain of its subsidiaries or any other
default which results in the acceleration of such indebtedness prior to its
maturity, in each case if the aggregate principal amount of all such
indebtedness exceeds $5.0 million.
Holders of a majority of the outstanding shares of Series B Preferred
Stock, voting as a separate class, must approve (i) any merger, consolidation or
sale of all or substantially all of the Company's assets not specifically
permitted by our certificate of designation and (ii) any modification to the
Amended and Restated Statement.
Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, the holders of the Series B Preferred
Stock are entitled to be paid for each share thereof out of the Company's assets
before any distribution is made to any shares of junior stock.
Conversion Rights. The shares of Series B Preferred Stock shall be
convertible into shares of Class B Common Stock at the option of the holder at
any time on or after March 30, 2002, or at any time after the occurrence of a
violation of certain covenants of the Company as set forth in the Amended and
Restated Statement. The conversion ratio is determined by a formula that is set
forth in the Amended and Restated Statement and that takes into account the
prevailing market price of the Class A Common Stock.
REASON FOR THE AMENDED AND RESTATED STATEMENT
The reason for the Amended and Restated Statement was to enable the
Company to raise additional capital through the sale of shares of the Series B
Preferred Stock. As described above, pursuant to the IBCA and the Articles, the
Board is vested with the authority to create and establish the terms of any
series of Preferred Stock. In order to raise additional capital to fund the
Company's operations and other obligations, the Company determined to sell a
limited number of shares of Preferred Stock. The Board determined that in order
to facilitate such a sale of shares, the Company would amend and restate the
resolutions setting forth the terms of the Series B Preferred Stock as
originally adopted by the Board. Following the requisite approval of the Amended
and Restated Statement by the Board and by the shareholders eligible to vote
thereon, the Company issued and sold 250 shares of Series B Preferred Stock at a
purchase price of $10,000 per share, or an aggregate purchase price of
$2,500,000. The proceeds from the sale of Series B Preferred Stock were applied
for working capital and other general corporate purposes. The sale of those
shares of Series B Preferred Stock did not require approval of the Company's
shareholders.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of September 30, 2000, the Company had (i) 28,378,976 shares of
Class A Common Stock outstanding, held by 137 shareholders of record, (ii)
4,479,343 shares of Class B Common Stock outstanding, held by 4 shareholders of
record, and (iii) 2,307,277 shares of Class C Common Stock outstanding, held by
five shareholders of record. The holders of shares of Class A Common Stock are
entitled to one vote per share, and the holders of shares of Class C Common
Stock are entitled to ten votes per share. The holders of Class A Common Stock
and Class C Common Stock vote together, as a single class, on all matters
submitted for a vote of shareholders of the Company. In connection with voting
to approve the Amended and Restated Statement, the holders of Class B Common
Stock who held consent rights pursuant to the Articles, had one vote per share
and voted as a single class.
The following table sets forth, as of September 30, 2000, certain
information regarding beneficial ownership of the Common Stock by (i) each
person who is known to the Company to be the beneficial owner of more than five
percent of the outstanding shares of Common Stock, based upon filings made with
the Securities and Exchange Commission, (ii) each director, (iii) each of the
five most highly compensated executive officers at December 31, 1999 who were
also executive officers as of September 30, 2000, and (iv) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK(1) COMMON STOCK(1) COMMON STOCK(1)(2)
--------------------------------------------------------------------------------------------------------------------------
NUMBER NUMBER NUMBER
NAME OF STOCKHOLDER OF SHARES PERCENTAGE OF SHARES PERCENTAGE OF SHARES PERCENTAGE
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
State of Wisconsin Investment Board(3) ... -- -- 3,240,619 72.3% -- --
BA Capital Company, L.P.(4) .............. 2,820,246 9.9% 544,996 12.2% -- --
The Northwestern Mutual Life
Insurance Company(5) .................. -- -- 693,728 15.5% -- --
CML Holdings, LLC(6) ..................... 201,100 * -- -- 1,522,422 66.0%
QUAESTUS Management Corporation(6) ....... 236,000 * -- -- 237,313 10.3%
QUAESTUS Partner Fund(6) ................. 100,000 * -- -- -- --
DBBC of Georgia, LLC(7) .................. 95,000 * -- -- 291,542 12.6%
Putnam Investment Management(8) .......... 2,640,425 9.3% -- -- -- --
Janus Capital Corporation(9) ............. 1,570,620 5.5% -- -- -- --
Richard W. Weening(10) ................... 367,000 1.3% -- -- 865,589 30.8%
Lewis W. Dickey, Jr.(10) ................. 191,740 * -- -- 919,818 32.8%
John Dickey(11) .......................... 148,354 * -- -- -- --
Robert H. Sheridan, III(12) .............. 14,000 * -- -- -- --
Ralph B. Everett(12) ..................... 16,000 * -- -- -- --
Eric P. Robison(12) ...................... 10,000 * -- -- -- --
All directors and executive
officers as a group (7 persons) ....... 747,094 2.6% -- -- 1,785,407 54.0%
</TABLE>
--------------------------
* Indicates less than one percent
1. Except upon the occurrence of certain events, holders of Class B Common
Stock are not entitled to vote, whereas each share of Class A Common
Stock entitles its holders to one vote and, subject to certain
exceptions, each share of Class C Common Stock entitles its holders to
ten votes. Under certain conditions and subject to prior governmental
approval, shares of Class B Common Stock are convertible into shares of
Class A Common Stock and/or Class C Common Stock.
2. Subject to certain exceptions, each share of Class C Common Stock
entitles its holders to ten votes. Under certain conditions and subject
to prior governmental approval, shares of Class C Common Stock are
convertible into shares of Class A Common Stock.
3. The address of the State of Wisconsin Investment Board is P.O. Box
7842, Madison, Wisconsin 53707. This information is based on a Schedule
13G dated February 10, 2000.
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4. The address of BA Capital Company, L.P. is 100 North Tryon Street,
Floor 25, Bank of America Corporate Center, Charlotte, North Carolina
28255. Does not include options to purchase 14,000 shares of Class A
Common Stock granted for the benefit of BA Capital Company, L.P. in
connection with its participation in designating a member to serve on
the Board. This information is based on a Schedule 13G dated December
3, 1999.
5. The address of the Northwestern Mutual Life Insurance Company is 720
East Wisconsin Avenue, Milwaukee, Wisconsin 53202. This information is
based on a Schedule 13G dated February 2, 2000.
6. The address of CML Holdings, LLC, QUAESTUS Management Corporation and
QUAESTUS Partner Fund is 111 East Kilbourn Avenue, Suite 2700,
Milwaukee, Wisconsin 53211. This information is based on a Schedule 13G
dated February 14, 2000.
7. The address of DBBC of Georgia, LLC is 3535 Piedmont Road, Building 14,
14th Floor, Atlanta, Georgia 30305. This information is based on a
Schedule 13G dated February 14, 2000.
8. The address of Putnam Investments, Inc. is One Post Office Square,
Boston, Massachusetts 02109. This information is based on a Schedule
13G dated February 17, 2000. Of these shares, Putnam Investments, Inc.
has shared voting power as to 478,200 shares and shared dispositive
power as to all 2,640,425 shares of Class A Common Stock.
9. The address of Janus Capital Corporation is 100 Fillmore Street,
Denver, Colorado 80206. This information is based on a Schedule 13G
dated February 15, 2000.
10. Includes beneficial ownership attributable to Mr. Weening as a result
of his controlling interests in QUAESTUS Management Corporation and
QUAESTUS Partner Fund and beneficial ownership attributable to Mr. L.
Dickey as a result of his controlling interest in DBBC of Georgia, LLC.
Also, includes (i) options to purchase 500,276 shares of Class C Common
Stock exercisable within 60 days held by each of Messrs. Weening and L.
Dickey, and (ii) options to purchase 30,000 shares of Class A Common
Stock exercisable within 60 days held by each of Messrs. Weening and L.
Dickey.
11. Includes options to purchase 76,354 shares of Class A Common Stock
exercisable within 60 days.
12. Includes options to purchase 14,000 shares of Class A Common Stock
exercisable within 60 days granted to each of Messrs. Sheridan and
Everett and 10,000 shares of Class A Common Stock exercisable within 60
days granted to Mr. Robison upon their election to the Board. Mr.
Sheridan's options are held for the benefit of BA Capital Company, L.P.
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FINANCIAL AND OTHER INFORMATION
The information contained in (i) part II, Item 6 "Selected Consolidated
Financial Data," Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations," Item 7A "Quantitative and Qualitative
Disclosures About Market Risk," and Item 8 "Financial Statements and
Supplementary Data" of the Company's Annual Report on Form 10-K/A (Amendment No.
1) for the fiscal year ended December 31, 1999, (ii) the Current Report on Form
8-K, dated April 17, 2000 and (iii) Part I, Item 1 "Financial Statements," Item
2 "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Item 3 "Quantitative and Qualitative Disclosures About Mark
Risk" in each of the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2000 and June 30, 2000, respectively, all of which have
previously been filed with the Securities and Exchange Commission, are
incorporated by reference in this Information Statement.
CUMULUS MEDIA INC.
Dated: November _____, 2000
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ANNEX A
AMENDED AND RESTATED
STATEMENT OF RESOLUTIONS FIXING TERMS OF
VOTING POWER, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS
OF
12% SERIES B CUMULATIVE PREFERRED STOCK
OF
CUMULUS MEDIA INC.
Cumulus Media Inc., an Illinois corporation (the "Company") certifies
that, pursuant to the authority contained in Article VI of its Articles of
Incorporation, as amended (the "Articles of Incorporation"), and in accordance
with the provisions of Section 6. 10 of the Business Corporation Act of 1983, as
amended (the "BCA"), and Section 10.30 of the BCA to the extent applicable
hereto, the Board of Directors of the Company (the "Board of Directors") at a
meeting held on September 23, 2000 duly approved and adopted the resolution set
forth below, which resolution remains in full force and effect on the date
hereof, and which action, to the extent the same may constitute an amendment to
the Articles of Incorporation was ratified, confirmed and approved by the
requisite number of shareholders for an action by written consent in lieu of
meeting in conformance with Section 7.10 of the BCA and the Articles of the
Incorporation:
RESOLVED, that the Board of Directors does hereby approve the amendment
of that certain Statement of Resolutions Fixing Terms of Voting Power,
Preferences and Relative, Participating, Optional and Other Special Rights and
Qualifications, Limitations and Restrictions with respect to the Company's 12%
Series B Cumulative Preferred Stock adopted pursuant to a resolution of the
Board of Directors of the Company dated June 24, 1998 and as filed with the
Secretary of State of the State of Illinois, Department of Business Services, on
June 30, 1998, by amending and restating in its entirety Exhibit A thereto, as
follows:
The preferences, qualifications, limitations, restrictions and special
or relative rights in respect of the 12,000 shares of Preferred Stock designated
"12% Series B Cumulative Preferred Stock" (hereinafter referred to as the
"Series B Preferred Stock") shall be as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
Section 1 shall have, for all purposes of this resolution, the meanings herein
specified (with terms defined in the singular having comparable meanings when
used in the plural).
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
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"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise: provided, that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"BCA" means the Illinois Business Corporation Act of 1983, as amended.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, to be in full force and effect on the date of such
certification and delivered to the Transfer Agent.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City or the
State of Illinois are authorized or obligated by law or executive order to
close.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company or similar entity, any membership or similar interests therein and (v)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year or less from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any lender party to the
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500 million and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having a rating of at least P-2 from
Moody's Investors Service, Inc. (or its successor) and a rating of at least A-2
from Standard & Poor's Ratings Services (or its successor) and (vi) investments
in money market or other mutual funds substantially all of whose assets comprise
securities of types described in clauses (ii) through (v) above.
"Change of Control" has the meaning set forth in the Series A Statement
of Resolutions Fixing Terms.
"Change of Control Offer" has the meaning set forth in Section 8(a).
"Change of Control Payment" has the meaning set forth in Section 8(a).
"Change of Control Payment Date" has the meaning set forth in Section
8(d).
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"Commission" means the Securities and Exchange Commission.
"Company" means Cumulus Media Inc.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the sum of, without duplication, the Consolidated Net Income of such
Person for such period plus (i) provision for taxes based on income or profits
of such Person and its Subsidiaries for such period, to the extent that such
provision for taxes was included in computing such Consolidated Net Income, plus
(ii) Consolidated Interest Expense of such Person for such period, to the extent
that any such expense was deducted in computing such Consolidated Net Income,
plus (iii) consolidated depreciation, amortization and other non-cash charges of
the Person and its Subsidiaries deducted in computing Consolidated Net Income of
such Person for such period plus (iv) cash payments with respect to any non-cash
charges previously added back pursuant to clause (iii). Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Subsidiary was included in calculating the Consolidated Net
Income of such Person.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), (ii) the consolidated interest expense of such Person
and its Restricted Subsidiaries that was capitalized during such period, (iii)
any interest expense on Indebtedness of another Person that is guaranteed by
such Person or any of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or any of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon) and (iv) the product of (a) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal; in
each case on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior government approval (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling-of-interests transaction for any period prior to
the date of such acquisition shall be excluded, (iv) the cumulative effect of a
change in accounting principles shall be excluded, and (v) all other
extraordinary gains and extraordinary losses shall be excluded.
"Continuing Directors" has the meaning set forth in the Series A
Statement of Resolutions Fixing Terms.
"Conversion Effective Date" has the meaning set forth in Section 6(d).
"Conversion Notice" has the meaning set forth in Section 6(d).
"Conversion Notice Date" means as to any conversion of Series B
Preferred Stock, the date the Conversion Notice is issued.
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"Conversion Price" has the meaning set forth in Section 6(a).
"Conversion Rate" has the meaning set forth in Section 6(a).
"Conversion Right" has the meaning set forth in Section 6(a).
"Credit Agreements" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Credit Facility) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, production payments, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit; in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
Indebtedness under Credit Agreements outstanding on the Issue Date (after giving
effect to the use of proceeds thereof) shall be deemed to have been incurred on
such date in reliance on the exception provided by clause (b) of the definition
of Permitted Indebtedness.
"Credit Facility" means that certain Amended and Restated Credit
Agreement, dated as of August 31, 1999, as amended, by and among the Company,
Lehman Brothers Inc., as advisor, lead arranger and book manager, Barclays
Capital as syndication agent, and Lehman Commercial Paper Inc. as administrative
agent, and certain banks, financial institutions and other entities, as lenders,
providing for up to $225.0 million of Indebtedness, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced, in whole or in part, from time to time,
whether or not with the same lenders or agents.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, is convertible
or exchangeable for Indebtedness or Disqualified Stock or redeemable at the
option of the holder thereof, in whole or in part, on or prior to the date that
is 91 days after the Mandatory Redemption Date; provided however, that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof (or of any security into which it is convertible or for which it
is exchangeable) have the right to require the issuer to repurchase such Capital
Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of any of the events constituting a Change of
Control shall not constitute Disqualified Stock if such Capital Stock (and all
such securities into which it is convertible or for which it is exchangeable)
provides that the issuer thereof will not repurchase or redeem any such Capital
Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to such provisions prior to compliance by the Company
with the provisions of Section 8.
"Dividend Payment Date" has the meaning set forth in Section 3(a).
"Dividend Rate" has the meaning set forth in Section 3(a).
"Dividend Shares" means shares of Series B Preferred Stock paid by the
Company to Holders of then outstanding shares of Series B Preferred Stock as
dividends on such outstanding shares in accordance with this Series B Statement
of Resolutions Fixing Terms.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of the Common Stock
of the Company pursuant to which the Company receives net proceeds of at least
$25.0 million, other than issuances of Common Stock of the Company pursuant to
employee benefit plans or as compensation to employees.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Four Quarter Period" has the meaning provided within the definition of
"Leverage Ratio".
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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor Senior Debt" means (i) Indebtedness of any Subsidiary
Guarantor under or in respect of any Credit Agreement, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not the claim for such
interest is allowed as a claim in such proceeding), reimbursement obligations,
fees, commissions, expenses, indemnities or other amounts, and (ii) any other
Indebtedness of any Subsidiary Guarantor permitted under the terms of the Notes
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Subsidiary Guarantees. Notwithstanding anything to the contrary
in the foregoing sentence, Guarantor Senior Debt will not include (w) any
liability for federal, state, local or other taxes owed by a Subsidiary
Guarantor, (x) any Indebtedness of a Subsidiary Guarantor to any of its
Subsidiaries or other Affiliates or (y) any Indebtedness that is incurred in
violation of the Notes Indenture (other than Indebtedness under (i) the Credit
Facility or (ii) any other Credit Agreement that is incurred on the basis of a
representation by the Company to the applicable lenders that the applicable
Subsidiary Guarantor is permitted to incur such Indebtedness under the Notes
Indenture).
"Hedging Obligations" means with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements with respect to Indebtedness that
is permitted by Section 9(a) and (ii) other agreements or arrangements designed
to protect such Person against fluctuation in interest rates or the value of
foreign currencies purchased or received by such Person in the ordinary course
of business.
"Holder" means a Person in whose name a share of Series B Preferred
Stock is registered.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, incur, issue, assume, guarantee or otherwise become
liable contingently or otherwise (and "Incurrence", "Incurred", "Incurrable" and
"Incurring" shall have meanings correlative to the foregoing).
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, (i) in respect of borrowed money, or
(ii) evidenced by bonds, notes, debentures or similar instruments or letters of
credit or reimbursement agreements in respect thereof (other than letters of
credit securing obligations not constituting Indebtedness that are issued in the
ordinary course of business by a Person to the extent not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the tenth
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit) or bankers' acceptances, or (iii)
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable for such property or service, or
(iv) representing any Hedging Obligations, in each case if and to the extent any
of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business and
extensions of trade credit in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness. Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any
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direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary of
the Company, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Issue Date" means the date on which any shares of Series B Preferred
Stock are initially issued after the effectiveness of this amended and restated
Series B Statement of Resolutions Fixing Terms.
"Junior Securities" has the meaning set forth in Section 2.
"Leverage Ratio" means the ratio of (i) the aggregate outstanding
amount of Indebtedness of the Company and its Subsidiaries as of the date of
calculation on a consolidated basis in accordance with GAAP (subject to the
terms described in the next paragraph) plus the aggregate liquidation preference
of all outstanding Disqualified Stock of the Company and preferred stock of the
Company's Subsidiaries (except preferred stock issued to the Company or a Wholly
Owned Subsidiary of the Company) on such date to (ii) the Consolidated Cash Flow
of the Company for the four full fiscal quarters (the "Four Quarter Period")
ending on or prior to the date of determination.
For purposes of this definition, (i) the amount of Indebtedness which
is issued at a discount shall be deemed to be the accreted value of such
Indebtedness at the end of the Four Quarter Period, whether or not such amount
is the amount then reflected on a balance sheet prepared in accordance with GAAP
and (ii) the aggregate outstanding principal amount of Indebtedness of the
Company and its Subsidiaries and the aggregate liquidation preference of all
outstanding preferred stock of the Company's Subsidiaries for which such
calculation is made shall be determined on a pro forma basis as if the
Indebtedness and preferred stock giving rise to the need to perform such
calculation had been incurred and issued and the proceeds therefrom had been
applied, and all other transactions in respect of which such Indebtedness is
being incurred or preferred stock is being issued had occurred, on the first day
of the Four Quarter Period. In addition to the foregoing, for purposes of this
definition, Consolidated Cash Flow shall be calculated on a pro forma basis
after giving effect to (i) the incurrence of the Indebtedness of such Person and
its Subsidiaries and the issuance of the preferred stock of such Subsidiaries
(and the application of the proceeds therefrom) giving rise to the need to make
such calculation and any incurrence (and the application of the proceeds
therefrom) or repayment of other Indebtedness, other than the incurrence or
repayment of Indebtedness pursuant to working capital facilities, at any time
subsequent to the beginning of the Four Quarter Period and on or prior to the
date of determination, as if such incurrence or issuance (and the application of
the proceeds thereof), or the repayment, as the case may be, occurred on the
first day of the Four Quarter Period, (ii) any acquisition (including, without
limitation, any acquisition giving rise to the need to make such calculation as
a result of such Person or one of its Subsidiaries (including any Person that
becomes a Subsidiary as a result of such acquisition) incurring, assuming or
otherwise becoming liable for Indebtedness or such Person's Subsidiaries issuing
preferred stock) at any time on or subsequent to the first day of the Four
Quarter Period and on or prior to the date of determination, as if such
acquisition (including the incurrence, assumption or liability for any such
Indebtedness and the issuance of such preferred stock and also including any
Consolidated Cash Flow associated with such acquisition) occurred on the first
day of the Four Quarter Period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company consistent with Article 11 of Regulation S-X, promulgated pursuant to
the Securities Act, as such Regulation is in effect on the Issue Date.
Furthermore, in calculating "Consolidated Interest Expense" for purposes of the
calculation of "Consolidated Cash Flow," (i) interest on Indebtedness determined
on a fluctuating basis as of the date of determination (including Indebtedness
actually incurred on the date of the transaction giving rise to the need to
calculate the Leverage Ratio) and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined on a
fluctuating basis, to the extent such interest is covered by Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with, respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing
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statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction other than a precautionary financing statement with respect to a
lease not intended as a security agreement).
"Liquidation Preference" means $10,000.00 per share of Series B
Preferred Stock.
"Mandatory Redemption Date" means October 3, 2009.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and after any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any asset sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or asset swap or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness), or (b) is directly
or indirectly liable (as a guarantor or otherwise); (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) the explicit terms of which provide that there is
no recourse against any of the assets of the Company or its Restricted
Subsidiaries.
"Notes Indenture" means the Indenture dated July 1, 1998, among the
Company, the Subsidiary Guarantors and the trustee in respect thereof, pursuant
to which the Senior Subordinated Notes were issued.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed by two officers at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company and delivered to the
Transfer Agent.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Transfer
Agent, delivered to the Transfer Agent.
"Parity Securities" has the meaning set forth in Section 2.
"Paying Agent" means Firstar Trust Company, a state bank organized and
existing under the laws of the State of Wisconsin.
"Permitted Business" means the broadcasting business or any business
that is reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
"Permitted Indebtedness" means (a) Indebtedness evidenced by the Senior
Subordinated Notes and the Subsidiary Guarantees; (b) Indebtedness pursuant to
Credit Agreements, so long as the aggregate principal amount of all Indebtedness
outstanding under all Credit Agreements does not, at any one time, exceed $175.0
million, less the aggregate amount of all mandatory prepayments of principal
applied since the date of the Series A Statement of Resolutions Fixing Terms to
permanently reduce the outstanding amount of such Indebtedness; (c) Indebtedness
of the Company and its Restricted Subsidiaries in existence as of the date of
the Series A Statement of Resolutions Fixing Terms; (d) intercompany
Indebtedness between or among the Company and any of its Wholly Owned Restricted
Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a Person
other than the Company or a Wholly Owned Restricted
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Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly Owned Restricted Subsidiary
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be; (e)
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price, lease or cost of construction or
improvement of property, plant or equipment used in a Permitted Business in an
aggregate principal amount not to exceed $15.0 million at any time outstanding;
(f) the incurrence by the Company or its Restricted Subsidiaries of Permitted
Refinancing Debt in exchange for, or the net proceeds of which are used to
refund, refinance or replace Indebtedness (other than intercompany Indebtedness)
that is permitted by this Series B Statement of Resolutions Fixing Terms to be
incurred; (g) the incurrence by the Company or its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating or variable rate Indebtedness or
for the purpose of protecting against fluctuations in interest rates or the
value of foreign currencies purchased or received, in each case in respect of
Indebtedness that is permitted by the terms of this Statement of Resolutions
Fixing Terms to be outstanding; provided, however, that in the case of Hedging
Obligations that are incurred for the purpose of fixing or hedging interest rate
risks with respect to Indebtedness, the notional principal amount of any such
Hedging Obligation does not exceed the principal amount of the Indebtedness to
which such Hedging Obligation relates and in the case of Hedging Obligations
incurred for the purpose of protecting against fluctuations in interest rates or
the value of foreign currencies purchased or received, such Hedging Obligations
do not increase the Indebtedness of the Company and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder; (h)
Indebtedness incurred solely in respect of performance, surety and similar bonds
or completion guarantees, to the extent that such incurrence does not result in
the incurrence of any obligation for the payment of borrowed money to others;
(i) Indebtedness arising out of standby letters of credit covering workers
compensation, performance or similar obligations in an aggregate amount not to
exceed $500,000 at any time outstanding; (j) any guarantee of the Company of
Indebtedness or other obligations of any of its Restricted Subsidiaries so long
as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is
permitted under the terms of this Statement of Resolutions Fixing Terms; (k) the
incurrence by the Company of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding not to exceed
$10.0 million; (l) the issuance of shares of Series A Preferred Stock issued as
dividends on the Series A Preferred Stock outstanding on the Issue Date or
issued subsequent to the Issue Date as dividends permitted pursuant to this
clause (l), to the extent such dividends are made pursuant to the terms of the
Series A Statement of Resolutions Fixing Terms as in effect on the Issue Date,
on any Preferred Stock issued in exchange for the Series A Preferred Stock, or
any dividends on such Preferred Stock to the extent such dividends are made
pursuant to the terms of the Series A Statement of Resolutions Fixing Terms of
such Preferred Stock; (m) the issuance of Dividend Shares issued on the Series B
Preferred Stock outstanding on the Issue Date or issued subsequent to the Issue
Date as dividends permitted pursuant to this clause (m), to the extent such
dividends are made pursuant to the terms of this Statement of Resolution Fixing
Terms as in effect on the Issue Date, on any Preferred Stock issued in exchange
for the Series B Preferred Stock, or any dividends on such Preferred Stock to
the extent such dividends are made pursuant to the terms of the this Series B
Statement of Resolutions Fixing Terms of such Preferred Stock; and (n) Guarantor
Senior Debt constituting Guarantees by the Subsidiary Guarantors of Indebtedness
incurred under the Credit Facility that is permitted by the terms of this Series
B Statement of Resolutions Fixing Terms to be incurred.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents or securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof having
maturities of not more than one year from the date of acquisition; (c) any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person if, as a result of such Investment, (i) such Person becomes a Wholly
Owned Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company; (d) any Investment made as a
result of the receipt of non-cash consideration from an asset sale; (e) other
Investments in any Person or Persons having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (e) that are at the time outstanding without giving
effect to subsequent changes in value or increases or decreases attributable to
the accounting for the net income of such Investment, not to exceed $15.0
million; (f) any Investment acquired by the Company in exchange for Equity
Interests in the Company (other than Disqualified Stock); (g) any Investment
acquired by the Company or any of its
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Restricted Subsidiaries (i) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable or (ii) as a
result of the transfer of title with respect to any secured investment in
default as a result of a foreclosure by the Company or any of its Restricted
Subsidiaries with respect to such secured Investment; (h) Hedging Obligations
permitted under Section 9(a); (i) loans and advances to officers, directors and
employees for business-related travel expenses, moving expenses and other
similar expenses, in each case, incurred in the ordinary course of business; (j)
any guarantees permitted to be made pursuant to Section 9(a); and (k) all
Investments of the Company and its Restricted Subsidiaries in existence as of
the date hereof.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness (other than Indebtedness incurred under a Credit Agreement) of the
Company or any of its Restricted Subsidiaries; provided that: (i) the principal
amount of such Permitted Refinancing Debt does not exceed the principal amount
of the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Debt has a final maturity date on or
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iii) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" means, with respect to any Person, any and all shares
of Capital Stock of such Person that have preferential rights to any other
Capital Stock of such Person with respect to dividends or redemptions or upon
liquidation.
"Principal" means Richard W. Weening and Lewis W. Dickey, Jr.
"Purchase Agreement" means that certain Securities Purchase Agreement
dated October 2, 2000 between the Company and the initial purchasers of shares
of Series B Preferred Stock, as modified or amended in accordance with the terms
thereof.
"Record Date" has the meaning set forth in Section 3(a).
"Redemption Date" has the meaning set forth in Section 5(d).
"Related Party" with respect to any Principal means (i) any controlling
stockholder, 80% (or more) owned subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (ii) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (i).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any distribution on account of any Junior Securities
(other than dividends or distributions payable in Junior Securities (other than
Disqualified Stock)), (ii) the purchase, redemption or other acquisition or the
retirement of, for value, any Junior Securities or (iii) the making of any
Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the
Company that is not an Unrestricted Subsidiary.
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"Redemption Price" has the meaning set forth in Section 5(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Notes" means the 10 3/8% Senior Subordinated Notes
Due 2008 of the Company.
"Series A Issue Date" means the date on which shares of Series A
Preferred Stock were initially issued.
"Series A Preferred Stock" means the 13.75% Series A Cumulative
Convertible Redeemable Preferred Stock Due 2009 issued pursuant to the Series A
Statement of Resolution Fixing Terms.
"Series B Preferred Stock" means the 12% Series B Cumulative Preferred
Stock issued pursuant to this Series B Statement of Resolutions Fixing Terms.
"Series A Statement of Resolutions Fixing Terms" means the Statement of
Resolutions Fixing Terms of Voting Power, Preferences and Relative,
Participating, Optional and other Special Rights and Qualifications, Limitations
and Restrictions of the Series A Preferred Stock as in effect on the Issue Date.
"Series B Statement of Resolutions Fixing Terms" means this Statement
of Resolutions Fixing Terms of Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and Qualifications, Limitations
and Restrictions of 12% Series B Cumulative Preferred Stock of the Company, as
amended and restated hereunder.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock, entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Subsidiary Guarantees" means each of the Guarantees entered into by
each Subsidiary Guarantor of the Company dated as of the date of the Note
Indenture and each Guarantee entered into by each Restricted Subsidiary created
or acquired by the Company thereafter.
"Subsidiary Guarantors" means each Subsidiary of the Company party to a
Subsidiary Guarantee.
"Transfer Agent" means Firstar Trust Company, a state bank organized
and existing under the laws of the State of Wisconsin.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Undesignated Shares" means shares of the preferred stock of the
Company which are authorized under its Articles of Incorporation, are not issued
and outstanding, and have not been assigned to a series of preferred stock.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company which
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below), (ii) any
Subsidiary of an Unrestricted Subsidiary and (iii) CCC. The Board of Directors
of the Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary or a Person becoming a Subsidiary through
merger or consolidation or Investment therein) to be an Unrestricted Subsidiary
only if (a) such Subsidiary does not own any Capital Stock of, or own or hold
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary; (b) all the Indebtedness of such Subsidiary shall, at the date of
designation, and will at all times thereafter, consist of Non-Recourse Debt; (c)
the Company certifies that such designation complies with Section 9(c); (d) such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not
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operate, directly or indirectly, all or substantially all of the business of the
Company and its Subsidiaries; (e) such Subsidiary does not, directly or
indirectly, own any Indebtedness of or Equity Interest in, and has no
Investments in, the Company or any Restricted Subsidiary; (f) such Subsidiary is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (1) to subscribe for
additional Equity Interests or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (g) on the date such Subsidiary is designated an
Unrestricted Subsidiary, such Subsidiary is not a party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary with terms substantially less favorable to the Company than those
that might have been obtained from Persons who are not Affiliates of the
Company. Any such designation by the Board of Directors of the Company shall be
evidenced by a resolution of the Board of Directors of the Company giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Statement of Resolutions Fixing Terms and any
Indebtedness of such Subsidiary shall be deemed to be incurred as of such date.
The Board of Directors of the Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, that immediately after giving effect to
such designation, no Voting Rights Triggering Event shall have occurred and be
continuing or would occur as a consequence thereof and the Company could incur
at least $1.00 of additional Indebtedness (excluding Permitted Indebtedness)
pursuant to Section 9(a)(i) on a pro forma basis taking into account such
designation.
"Voting Rights Amendment" means an amendment to the Bylaws of the
Company providing for an increase in the size of the Board of Directors of the
Company to, at all times, accommodate the appointment of a sufficient number of
directors designated by the Holders of Series B Preferred Stock in compliance
with clauses (a) and (b) of Section 7(b).
"Voting Rights Triggering Event" has the meaning set forth in Section
7(b).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned, directly or indirectly, by such Person or by one or more
Wholly Owned Restricted Subsidiaries of such Person.
2. Ranking.
(a) The Series B Preferred Stock shall, with respect to
dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company, rank (i) senior to all
classes of common stock of the Company and to each other class of
Capital Stock of the Company established after the Issue Date by the
Board of Directors of the Company the terms of which do not expressly
provide that it ranks on a parity with the Series B Preferred Stock as
to dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company (collectively referred to,
together with all classes of common stock of the Company, as "Junior
Securities"); (ii) subject to certain conditions described below, on a
parity with each series of preferred stock existing on the Issue Date
the terms of which do not expressly provide that it ranks junior to the
Series B Preferred Stock as to dividend distributions and distributions
upon the liquidation, winding-up and dissolution of the Company and any
class or series of Capital Stock established after the Issue Date by
the Board of Directors of the Company, the terms of which expressly
provide that such class or series will rank on a parity with the Series
B Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company
(collectively referred to as "Parity Securities"). The Shares of Series
B Preferred Stock shall rank on parity with the Series A Preferred
Stock as to dividend distributions and
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<PAGE> 19
distribution upon the liquidation, winding up and dissolution of
the Company, and Parity Securities shall include, without limitation,
the shares of Series A Preferred Stock.
(b) The Company shall not authorize or issue any new
class of Parity Securities without the affirmative vote or consent
(voting or consenting as one class) of the holders of at least 50% of
the shares of Series B Preferred Stock then outstanding, voting or
consenting, as the case may be, as one class; provided, that, without
the approval of Holders of the Series B Preferred Stock, the Company
may issue shares of Parity Securities in exchange for, or the proceeds
of which are used to redeem or purchase, any or all of the shares of
the Series B Preferred Stock or other Parity Securities then
outstanding.
3. Dividends.
(a) The Holders of the outstanding shares of the Series B
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds of the Company legally available therefor,
dividends on the Series B Preferred Stock, which shall accrue at a rate per
annum equal to 12% of the Liquidation Preference (the "Dividend Rate"). If at
any time dividends on the Series B Preferred Stock are in arrears and unpaid for
four consecutive quarterly dividend periods, holders of Series B Preferred Stock
will be entitled to the voting rights specified in Section 7 of this Series B
Statement of Resolutions Fixing Terms. All dividends will be cumulative, whether
or not earned or declared on a daily basis, from the Issue Date and will be
payable quarterly in arrears on July 1, October 1, January 1 and April 1,of each
year, commencing on January 1, 2001, or, if any such date is not a Business Day,
on the next succeeding Business Day (each, a "Dividend Payment Date") to the
Holders on the June 15, September 15, December 15 or March 15 immediately
preceding the relevant Dividend Payment Date (each, a "Record Date"). The
Company may, at its option, pay dividends in cash or in Dividend Shares
(including fractional shares, provided that the Company may, at its option, pay
cash in lieu of issuing fractional shares) having an aggregate Liquidation
Preference equal to the amount of such dividends. The issuance of such Dividend
Shares shall constitute "payment" of the related dividend for all purposes of
this Series B Statement of Resolutions Fixing Terms. Dividends payable on the
Series B Preferred Stock will be computed on the basis of a 360-day year
consisting of twelve 30-day months and the number of days actually elapsed and
will be deemed to accrue on a daily basis.
(b) Dividend Rate Adjustment Following Default. The
Dividend Rate shall be adjusted from 12% of the Liquidation Preference per annum
to 17% of Liquidation Preference per annum on the first day next following the
occurrence of a breach of any of the terms of this Series B Statement of
Resolutions Fixing Terms or a breach of any of the terms of (i) Section(s) 8.1,
8.4, 8.6, 8.8, 8.9, 8.10, 8.11, 8.17, 8.18 or 11.13, (ii) Article IX, or (iii)
Article X of the Purchase Agreement (each, a "Specified Event of Default") and
shall continue to accrue at such adjusted per annum rate through and including
the day following the date on which such Specified Event of Default or breach
has been cured or waived in writing by the holders of not less than a majority
of the aggregate number of shares of Series B Preferred Stock outstanding (such
period being herein referred to as the "Covenant Default Period"). Such adjusted
Dividend Rate shall automatically be readjusted from the default rate applicable
during the Covenant Default Period as provided above to 12% of the Liquidation
Preference per annum on the day following the date on which such Specified Event
of Default or breach is cured as provided in the Purchase Agreement or waived in
writing by the holders of not less than a majority of the aggregate number of
shares of Series B Preferred Stock outstanding.
(c) No full dividends shall be declared or paid or funds
set apart for the payment of dividends on any Parity Securities for any period
unless full cumulative dividends shall have been or contemporaneously are
declared and paid (or are deemed declared and paid) in full or declared and, if
payable in cash, a sum in cash sufficient for such payment set apart for such
payment on the Series B Preferred Stock. If full dividends are not so paid, the
Series B Preferred Stock will share dividends pro rata with the Parity
Securities. Unless full cumulative dividends on all outstanding shares of Series
B Preferred Stock for all past dividend periods shall have been declared and
paid, or declared and a sufficient sum for the payment thereof set apart, then:
(i) no dividend (other than a dividend on Junior Securities payable solely in
shares of any Junior Securities) shall be declared or paid upon (or deemed
paid), or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (ii) no shares of Junior Securities or Parity Securities
shall be repurchased, redeemed or otherwise acquired or retired by the Company
or any of its Subsidiaries except as permitted under Section 9(c) hereof; and
(iii) no monies shall be paid into or set apart or made available for a sinking
or other like fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities or Parity Securities by
the Company or any of its Subsidiaries. Dividends on account of arrears for any
past dividend period and dividends in connection with any optional redemption
may be declared
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<PAGE> 20
and paid at any time, without reference to any regular Dividend Payment Date, to
holders of record of the Series B Preferred Stock on such date, not more than 45
days prior to the payment thereof, as may be fixed by the Board of Directors of
the Company.
4. Liquidation Preference.
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, Holders of Series B Preferred Stock shall be entitled to payment, out
of the assets of the Company available for distribution to stockholders, the
Liquidation Preference per share of Series B Preferred Stock, plus, without
duplication, an amount in cash equal to all accumulated and unpaid dividends
thereon to but excluding the date fixed for liquidation, dissolution or
winding-up (including an amount equal to a prorated dividend for the period from
the last Dividend Payment Date to the date fixed for liquidation, dissolution or
winding-up), before any distribution is made on any Junior Securities,
including, without limitation, common stock of the Company. If, upon any
voluntary or involuntary liquidation, dissolution or winding-up of the Company,
the amounts payable with respect to the Series B Preferred Stock and all other
Parity Securities are not paid in full, the Holders of the Series B Preferred
Stock and the Parity Securities shall share equally and ratably in any
distribution of assets of the Company in proportion to the full liquidation
preference to which each is entitled. After payment of the full amount of the
Liquidation Preference and accumulated and unpaid dividends to which they are
entitled, the Holders of shares of Series B Preferred Stock shall not be
entitled to any further participation in any distribution of assets of the
Company. However, neither the sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
of the property or assets of the Company nor the consolidation or merger of the
Company with or into one or more Persons shall be deemed to be a liquidation,
dissolution or winding-up of the Company, unless such sale, conveyance, exchange
or transfer shall be in connection with a liquidation, dissolution or winding-up
of the business of the Company.
5. Redemption by the Company.
(a) On the Mandatory Redemption Date, the Company shall be
required to redeem (subject to the legal availability of funds therefor and to
Section 9.10 of the BCA) all outstanding shares of Series B Preferred Stock at a
price (the "Redemption Price") equal to 100% of the then effective Liquidation
Preference thereof, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends, if any, to but excluding the Redemption Date
(including an amount in cash equal to a prorated dividend for the period from
the Dividend Payment Date immediately prior to the Redemption Date). The Company
shall not be required to make sinking fund payments to protect the Liquidation
Preference with respect to the Series B Preferred Stock.
(b) The Series B Preferred Stock may be redeemed (subject to
contractual and other restrictions with respect thereto, to the legal
availability of funds therefor and to Section 9.10 of the BCA) at any time, in
whole or from time to time in part, at the option of the Company at the
Redemption Price.
(c) In the event of partial redemptions of Series B Preferred
Stock, the shares to be redeemed will be determined pro rata or by lot, as
determined by the Company, provided that the Company may redeem such shares held
by any Holder of fewer than 100 shares (or shares held by Holders who would hold
less than 100 shares as a result of such redemption), without regard to any pro
rata redemption requirement.
(d) Notice of any redemption shall be sent by or on behalf of the
Company not less than 30 nor more than 60 days prior to the date specified for
redemption in such notice (including the Mandatory Redemption Date, the
"Redemption Date"), by first class mail, postage prepaid, to all Holders of
record of the Series B Preferred Stock at their registered address. In addition
to any information required by law or by the applicable rules of any exchange
upon which Series B Preferred Stock may be listed or admitted to trading, such
notice shall state: (i) whether such redemption is being made pursuant to the
optional or the mandatory redemption provisions hereof; (ii) the Redemption
Date; (iii) the redemption price; (iv) if less than all the outstanding shares
of Series B Preferred Stock are to be redeemed, the Liquidation Preference of,
and the accrued and unpaid dividends on, the shares of Series B Preferred Stock
to be redeemed; (v) that on the Redemption Date the redemption price shall
become due and payable upon each share of Series B Preferred Stock to be
redeemed; and (vii) the place or places where shares are to be surrendered for
payment of the redemption price. Upon the mailing of any such notice of
redemption, the
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<PAGE> 21
Company shall become obligated to redeem at the time of redemption specified
thereon all shares called for redemption.
(e) If notice has been mailed in accordance with Section 5(d)
above and, provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been segregated and
irrevocably set apart by the Company, in trust for the pro rata benefit of the
Holders of the shares so called for redemption, so as to be, and to continue to
be available therefor, then, on and after the Redemption Date, unless the
Company defaults in the payment of the applicable redemption price, dividends on
the shares of the Series B Preferred Stock so called for redemption shall cease
to accumulate and all rights of the Holders of such shares shall terminate
except for the right to receive from the Company the redemption price, without
interest; provided, however, that if a notice of redemption shall have been
given and the funds necessary for redemption (including an amount in respect of
all dividends that will accrue to the Redemption Date) shall have been
segregated and irrevocably set apart by the Company, in trust for the pro rata
benefit of the Holders of the shares called for redemption, dividends shall
cease to accumulate on the Redemption Date on the shares to be redeemed and, at
the close of business on the day on which such funds are segregated and set
apart, the Holders of the shares to be redeemed shall cease to be stockholders
of the Company and shall be entitled only to receive the redemption price for
such shares. New certificates of Series B Preferred Stock having an aggregate
Liquidation Preference equal to the unredeemed portion of the Series B Preferred
Stock shall be issued in the name of the Holder thereof upon cancellation of the
original shares of Series B Preferred Stock without cost to the Holder thereof.
Upon surrender, in accordance with said notice, of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Company
shall so require and the notice shall so state), such shares shall be redeemed
by the Company at the applicable redemption price. Shares of Series B Preferred
Stock issued and reacquired by the Company pursuant to this Section 5 shall,
upon compliance with the applicable requirements of Illinois law, have the
status of Undesignated Shares of the Company, and may, with any and all other
Undesignated Shares of the Company, be designated or redesignated, and issued or
reissued, as the case may be, as part of any series of preferred stock of the
Company, except that any issuance or reissuance of shares of Series B Preferred
Stock must be in compliance with this Series B Statement of Resolutions Fixing
Terms.
(f) Any deposit of funds with a bank or trust company for the
purpose of redeeming Series B Preferred Stock shall be irrevocable except that:
(i) the Company shall be entitled to receive from such
bank or trust company the interest or other earnings, if any, earned on any
money so deposited in trust, and the Holders of any shares redeemed shall have
no claim to such interest or other earnings; and
(ii) any balance of monies so deposited by the Company and
unclaimed by the Holders of the Series B Preferred Stock entitled thereto at the
expiration of two years from the applicable Redemption Date shall be repaid,
together with any interest or other earnings earned thereon, to the Company, and
after any such repayment, the holders of the shares entitled to the funds so
repaid to the Company shall look only to the Company for payment without
interest or other earnings.
(g) No Series B Preferred Stock may be redeemed except with funds
legally available for the purpose. The Company shall take all actions required
or permitted under the BCA to permit any redemption which is required pursuant
to clause (a) above or which the Company elects pursuant to clause (b) above.
(h) No optional redemption may be authorized or made (i) unless
prior thereto or contemporaneously therewith full unpaid cumulative dividends
shall have been paid or a sum set apart for such payment on the Series B
Preferred Stock and on the Series A Preferred Stock, or (ii) at a price less
than 101 % of the Liquidation Preference of the Series B Preferred Stock at any
time when the Company is making an offer to purchase shares of Series B
Preferred Stock under a Change of Control Offer in accordance with Section 8.
6. Conversion Rights. The Holders shall have conversion rights in
respect of the shares of Series B Preferred Stock as follows (the "Conversion
Rights"):
(a) The shares of Series B Preferred Stock shall be convertible,
at the times and under the conditions described in this Section 6 hereafter, at
the rate (the "Conversion Rate") of one share of Series B Preferred Stock into
the number of shares of Class B Common Stock that equals the quotient obtained
by dividing the Liquidation
A-14
<PAGE> 22
Preference by the Conversion Price (defined hereinafter). Thus, the number of
shares Class B Common Stock to which a Holder shall be entitled upon any
conversion provided for in this Section 6 shall be the product obtained by
multiplying the Conversion Rate by the number of shares of Series B Preferred
Stock being converted. Such conversion shall be deemed to have been made on the
Conversion Effective Date (defined hereinafter), and such conversion shall be
effected in accordance with the procedures described herein below. Upon
conversion of any shares of Series B Preferred Stock, the Company shall pay all
declared or accrued but unpaid dividends as to such shares to the Holders
thereof to and through the Conversion Effective Date; provided, however, that
the Company may, at its option, in lieu of making a full cash payment of all
such declared or accrued but unpaid dividends, make payment thereof in that
number of whole shares of Class B Common Stock calculated by dividing the total
of such declared or accrued but unpaid dividends due such Holders by the
Conversion Price. The "Conversion Price" shall be equal to the lower of (i) the
closing sale prices of the Company's Class A Common Stock as reported by the
NASDAQ Stock Market on the Conversion Notice Date (or the first trading day
prior thereto if such date is not a trading day) or (ii) the average of the
closing sales prices of the Company's Class A Common Stock as reported by the
NASDAQ Stock Market for the twenty (20)-day trading period prior to the
Conversion Notice Date.
(b) Each share of Series B Preferred Stock shall be convertible,
at the option of the Holder thereof, at any time on or after March 30, 2002, or
at any time after the occurrence of a Specified Event of Default, in respect of
such share at the office of the Company or any transfer agent for the Series B
Preferred Stock, into Class B Common Stock at the then effective Conversion
Rate.
(c) No fractional shares of Class B Common Stock shall be issued
upon conversion of Series B Preferred Stock, and any shares of Series B
Preferred Stock surrendered for conversion that would otherwise result in a
fractional share of Class B Common Stock shall be redeemed at the then effective
Conversion Price per share, payable as promptly as possible when funds are
legally available therefor.
(d) Before any Holder shall be entitled to receive certificates
representing the shares of Class B Common Stock into which shares of Series B
Preferred Stock are converted in accordance with this Section 6, such Holder
shall surrender the certificate or certificates for such shares of Series B
Preferred Stock, duly endorsed, at the office of the Company or of any transfer
agent for the Series B Preferred Stock, and shall give written notice to the
certificates for shares of Class B Common Stock to be issued, if different from
the name shown on the books and records of the Company. Said conversion notice
("Conversion Notice") shall also contain such representations of the Holder as
may reasonably be required by the Company to the effect that the shares to be
received upon conversion are not being acquired and will not be transferred in
any way that might violate the then applicable securities laws. In the case of a
conversion pursuant to this Section 6, the Company shall, on or before the
fifteenth (15th) day following receipt by the Company of the Conversion Notice,
issue and deliver at such office to such Holder, or to the nominee or nominees
of such Holder as provided in the Conversion Notice, a certificate or
certificates for the number of shares of Class B Common Stock to which such
Holder shall be entitled as aforesaid. Such date for issuance and delivery of
the shares of Class B Common Stock received upon conversion of Preferred Stock
pursuant to this Section 6 is hereafter referred to as the Conversion Effective
Date. The person or persons entitled to receive the shares of Class B Common
Stock issuable upon a conversion pursuant to this Section 6 shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of the Conversion Effective Date. All certificates issued upon the exercise or
occurrence of the conversion shall contain a legend governing restrictions upon
such shares imposed by law or agreement of the Holder or his or its
predecessors.
(e) In the event the Company at any time or from time to time
after the Issue Date effects a subdivision or combination of the outstanding
Class B Common Stock into a greater or lesser number of shares without a
proportionate and corresponding subdivision or combination of the outstanding
Series B Preferred Stock, then and in each such event the Conversion Price to
the extent then determined, (and the corresponding Conversion Rate) shall be
increased or decreased proportionately.
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<PAGE> 23
(f) The Company shall not, by amendment of its Articles of
Incorporation or Bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but shall at all
times in good faith assist in the carrying out of all the provisions of this
Section 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the Holders against
impairment.
(g) The Company shall at all times reserve and keep available out
of its authorized but unissued shares of Class B Common Stock solely for the
purpose of effecting the conversion of the shares of the Series B Preferred
Stock, to the extent such authorized but unissued shares of Class B Common Stock
are available as of the Issue Date, such number of its shares of Class B Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock; and if at any time after the
Issue Date the number of authorized but unissued shares of Class B Common Stock
shall be insufficient to effect the conversion of all then outstanding shares of
the Series B Preferred Stock, the Company shall take such corporate action as it
may deem necessary to increase its authorized but unissued shares of Class B
Common Stock to such number of shares as shall be sufficient for such purpose.
7. Voting Rights.
(a) The Holders of shares of Series B Preferred Stock shall have
no voting rights, except as required by non-waivable provisions of Illinois law
and as hereinafter provided in this Section 7. It is the intention of this
Section 7(a) to deny voting rights to holders of shares of Series B Preferred
Stock except (i) as specifically granted in Sections 7(b) through 7(i), and (ii)
to the extent that non-waivable provisions of Illinois law preclude the denial
of voting rights to holders of shares of Series B Preferred Stock.
(b) If:
(i) at any time, dividends on the outstanding Series B
Preferred Stock are in arrears and unpaid for four (4) consecutive quarterly
dividend periods;
(ii) the Company fails to discharge any redemption
obligation with respect to the Series B Preferred Stock (whether or not the
Company is permitted to do so by the terms of the Credit Facility, the Senior
Subordinated Notes, the BCA, or any other obligation of the Company);
(iii) the Company fails to make a Change of Control Offer
on the terms and in accordance with the provisions described below in Section 8
hereof (whether or not the Company is permitted to do so by the terms of the
Credit Facility, the Senior Subordinated Notes or any other obligation of the
Company) or fails to purchase shares of Series B Preferred Stock from Holders
who elect to have such shares purchased pursuant to the Change of Control Offer;
(iv) the Company breaches or violates any of the other
covenants or agreements set forth in Section 9 hereof and such breach or
violation continues for a period of 60 days or more after the Company receives
notice thereof specifying the default from the Holders of at least 25% of the
shares of Series B Preferred Stock then outstanding; or
(v) the Company or any Restricted Subsidiary defaults
under the terms of any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of this Statement of Resolutions Fixing Terms, which default (A)
is caused by a failure to pay principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (B) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there is then existing a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more (each of the events described in clauses (i), (ii), (iii),
(iv) and (v) being referred to herein as a "Voting Rights Triggering Event");
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<PAGE> 24
then, the number of directors constituting the Board of Directors of the Company
will be adjusted to permit the holders of the majority of the then outstanding
Series B Preferred Stock, voting separately as a class, to elect two directors.
(c) Whenever the foregoing voting rights shall have vested, such
rights may be exercised initially either at a special meeting of the Holders of
Series B Preferred Stock, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent of the Holders of
Series B Preferred Stock. Such right of the Holders of Series B Preferred Stock
to elect directors may be exercised until (i) all dividends in arrears shall
have been paid in full (ii) all other failures, breaches or defaults giving rise
to such Voting Rights Triggering Event are remedied or waived by the Holders of
at least a majority of the shares of Series B Preferred Stock then outstanding,
at which time the term of such directors previously elected pursuant to the
provisions of this Section 7(b) shall thereupon terminate, and such directors
shall be deemed to have resigned.
(d) At any time when the foregoing voting rights shall have vested
in the Holders of Series B Preferred Stock and if such rights shall not already
have been initially exercised, a proper officer of the Company shall, upon the
written request of Holders of record of 10% or more of the Series B Preferred
Stock then outstanding, addressed to the Secretary of the Company, call a
special meeting of Holders of Series B Preferred Stock. Such meeting shall be
held at the earliest practicable date based upon the number of days of notice
required for annual meetings of stockholders at the place for holding annual
meetings of stockholders of the Company or, if none, at a place designated by
the Secretary of the Company. If such meeting shall not be called by the
officers of the Company within 30 days after the personal service of such
written request upon the Secretary of the Company, or within 30 days after
mailing the same within the United States, by registered mail, addressed to the
Secretary of the Company at its principal office (such mailing to be evidenced
by the registry receipt issued by the postal authorities), then the Holders of
record of 10% of the shares of Series B Preferred Stock then outstanding may
designate in writing a Holder of Series B Preferred Stock to call such meeting
at the expense of the Company, and such meeting may be called by such person so
designated upon the number of days of notice required for annual meetings of
stockholders and shall be held at the place for holding annual meetings of the
Company or, if none, at a place designated by such Holder. Any Holder of Series
B Preferred Stock that would be entitled to vote at such meeting shall have
access to the stock books of the Company for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this Section 7.
Notwithstanding the provisions of this Section 7(d) however, no such special
meeting shall be called if any such request is received less than 90 days before
the date fixed for the next ensuing annual or special meeting of stockholders.
(e) If any director so elected by the Holders of Series B
Preferred Stock shall cease to serve as a director before his term shall expire,
the Holders of Series B Preferred Stock then outstanding may, at a special
meeting of the Holders called as provided above, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
(f) In addition to the matters set forth in Section 2(b), the
Company shall not, without the affirmative vote or consent of the Holders of at
least a majority of the shares of Series B Preferred Stock then outstanding
(with shares held by the Company or any of its Affiliates not being considered
to be outstanding for this purpose) voting or consenting as the case may be, as
one class merge, consolidate or sell all or substantially all of the assets of
the Company except as permitted pursuant to Section 9(b).
(g) In addition to the matters set forth in clause (f) above,
except as stated above under Section 2, the Company shall not, without the
affirmative vote or consent of holders of at least a 50% of the shares of Series
B Preferred Stock then outstanding (with shares held by the Company or any of it
of its Affiliates not being considered to be outstanding for this purpose),
voting or consenting, as the case may be, as one class:
(i) amend this Series B Statement of Resolutions Fixing
Terms so as to adversely affect the specified rights, preferences, privileges or
voting rights of holders of shares of the Series B Preferred Stock, or
(ii) increase the number of authorized shares of the
Company designated as Series B Preferred Stock.
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(h) Without the consent of each Holder affected, an amendment or
waiver of the Company's Articles of Incorporation or of this Series B Statement
of Resolutions Fixing Terms may not (with respect to any shares of Series B
Preferred Stock held by a non-consenting Holder):
(i) alter the voting rights with respect to the Series B
Preferred Stock (provided, however, that the consent of Holders of Series B
Preferred Stock shall not be required to approve the Voting Rights Amendment) or
reduce the number of shares of Series B Preferred Stock whose holders must
consent to an amendment, supplement or waiver of the terms of this Series B
Statement of Resolutions Fixing Terms;
(ii) reduce the Liquidation Preference of or change the
Mandatory Redemption Date of any share of Series B Preferred Stock or alter the
provisions with respect to the redemption of the Series B Preferred Stock
(except as provided with respect to Section 8 hereof);
(iii) reduce the rate or change the time for payment of
dividends on any share of Series B Preferred Stock;
(iv) waive the consequences of any failure to pay
dividends on the Series B Preferred Stock;
(v) make any share of Series B Preferred Stock payable in
any form other than that stated in this Statement of Resolutions Fixing Terms;
(vi) make any change in the provisions of this Series B
Statement of Resolutions Fixing Terms relating to waivers of the rights of
holders of Series B Preferred Stock to receive the Liquidation Preference and
dividends on the Series B Preferred Stock;
(vii) waive a redemption payment with respect to any share
of Series B Preferred Stock (except as provided with respect to Section 8
hereof); or
(viii) make any change in the foregoing amendment and waiver
provisions.
(i) The Company in its sole discretion may, without the vote or
consent of any Holders of the Series B Preferred Stock, amend or supplement this
Series B Statement of Resolutions Fixing Terms:
(i) to cure any ambiguity, defect or inconsistency;
(ii) except as set forth in Section 2(b) and clauses (f)
and (g) above, to create, authorize or issue any shares of Junior Securities or
Parity Securities;
(iii) to decrease the amount of authorized capital stock of
any class, including any Series A Preferred Stock or Series B Preferred Stock;
(iv) to increase the amount of authorized capital stock of
any class of Junior Securities; or
(v) to make any change that would provide any additional
rights or benefits to the Holders of this Series B Preferred Stock or that does
not adversely affect the legal rights under this Series B Statement of
Resolutions Fixing Terms of any such Holder.
8. Change of Control.
(a) Upon the occurrence of a Change of Control, and subject to the
limitation provided in Section 8(h), the Company shall make an offer (the
"Change of Control Offer") to each Holder of shares of Series B Preferred Stock
to repurchase all or any part (but not, in the case of any Holder requiring the
Company to purchase less than all of the shares of Series B Preferred Stock held
by such Holder, any fractional shares) of such Holder's Series B Preferred Stock
at an offer price in cash equal to 101% of the aggregate Liquidation Preference
thereof plus, without duplication, an amount in cash equal to all accumulated
and unpaid dividends, if any, thereon to but excluding the date of purchase (the
"Change of Control Payment") (including an amount in cash equal to a pro rated
dividend for the period from the Dividend Payment Date immediately prior to the
Change of Control Payment Date) (subject to the right of Series B Preferred
Stock Holders of record on the relevant record date to receive dividends due on
the relevant Dividend Payment Date); provided, however, that notwithstanding the
occurrence of a Change
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of Control, the Company shall not be obligated to purchase the Series B
Preferred Stock pursuant to this covenant in the event that it has exercised its
right to redeem all of the Series B Preferred Stock pursuant to Section 5(b).
(b) The Change of Control Offer shall include all instructions and
materials necessary to enable Holders to tender their shares of Series B
Preferred Stock and a full description of the circumstances and relevant facts
and financial information regarding such Change of Control.
(c) The Company shall comply, to the extent applicable, with the
requirements of Rule 14(e) of the Exchange Act and any other securities laws and
regulations in connection with the repurchase of the Series B Preferred Stock as
a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this covenant, the
Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under this paragraph by virtue
thereof. The Change of Control Offer shall contain information concerning the
business of the Company and its Subsidiaries which the Company in good faith
believes will enable such Holders to make an informed decision with respect to
the Change of Control Offer (which at a minimum will include (i) the most recent
annual and quarterly financial statements, (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Change of Control Offer) and (iii)
if applicable, appropriate pro forma financial information concerning the Offer
to Purchase).
(d) Within 30 days following any Change of Control (or at the
Company's option, prior to such Change of Control but after the public
announcement thereof), the Company shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this Section 8 and that all shares of Series B Preferred Stock
tendered shall be accepted for payment;
(ii) the amount of the Change of Control Payment, the
purchase date, which shall be not earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date");
(iii) that any share of Series B Preferred Stock not
tendered shall continue to accumulate dividends;
(iv) the place or places where Series B Preferred Stock
are to be surrendered for tender pursuant to the Change of Control Offer;
(v) that, on the Change of Control Payment Date, the
purchase price shall become due and payable upon each share of Series B
Preferred Stock accepted for payment pursuant to the Change of Control Offer
and, unless the Company fails to pay the Change of Control Payment on the Change
of Control Payment Date, all shares of Series B Preferred Stock accepted for
payment pursuant to the Change of Control Offer shall cease to accumulate
dividends after the Change of Control Payment Date;
(vi) that Holders electing to have any shares of Series B
Preferred Stock purchased pursuant to a Change of Control Offer will be required
to surrender the shares of Series B Preferred Stock, with the form entitled
"Option of Holder to Elect Purchase" which shall be included with the notice of
Change of Control completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(vii) that, if such Offer is made prior to such Change of
Control, payment is conditioned on the occurrence of such Change of Control; and
(viii) that the Holder may tender all or any portion of the
shares of Series B Preferred Stock held by such Holder and that in the case of
any Holder whose shares are to be purchased only in part, the Company shall
execute, authorize and deliver to the Holder, without service charge, a new
certificate as requested by such Holder, for the unpurchased portion of his
shares of Series B Preferred Stock.On the Change of Control Payment Date, the
Company shall, to the extent lawful, (i) accept for payment all shares of Series
B Preferred Stock or portions thereof property tendered pursuant to the Change
of Control Offer, (ii) deposit with the Payment Agent an amount equal to the
Change of Control Payment in respect of all shares of Series B Preferred Stock
so tendered and
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(iii) deliver or cause to be delivered to the Transfer Agent the shares of
Series B Preferred Stock so accepted together with an Officers' Certificate
stating the aggregate Liquidation Preference of the shares of Series B Preferred
Stock or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each holder of Series B Preferred Stock so tendered the Change
of Control Payment for such Series B Preferred Stock, and the Transfer Agent
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each holder a new certificate representing the shares of Series B Preferred
Stock equal in Liquidation Preference amount to any unpurchased portion of the
shares of Series B Preferred Stock represented by the certificates so
surrendered. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(f) If, at the time of a Change of Control, the Company is
restricted or prohibited by the terms of any Credit Agreements from purchasing
shares of Series B Preferred Stock that may be tendered by Holders pursuant to a
Change of Control Offer, prior to complying with the provisions of Section 8(a),
but in any event within 30 days following a Change of Control (unless the
Company has exercised its right to redeem all the Series B Preferred Stock
pursuant to Section 5(b)), the Company shall either (i) repay in full all
outstanding Obligations under such Credit Agreements or offer to repay in full
all outstanding Obligations under such Credit Agreements and repay the
Obligations of each lender who has accepted such offer or (ii) obtain the
requisite consent under such Credit Agreements to permit the repurchase of the
Series B Preferred Stock required by this Section 8. The Company must first
comply with the covenant described in the preceding sentence before it will be
required to repurchase shares of Series B Preferred Stock in the event of a
Change of Control; provided, that if the Company fails to comply with the
covenant described in the preceding sentence, the sole remedy to holders of
Series B Preferred Stock will be the voting rights arising from a Voting Rights
Triggering Event. Moreover, the Company will not repurchase or redeem any Series
B Preferred Stock pursuant to this Change of Control provision prior to the
Company's repurchase of the Senior Subordinated Notes pursuant to the Change of
Control covenants in the Notes Indenture.
(g) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 8 applicable to a Change of Control Offer
made by the Company and purchases all shares of Series B Preferred Stock validly
tendered and not withdrawn under such Change of Control Offer.
(h) The Company may not repurchase or redeem, pursuant to the
provisions of this Section 8, any shares of Series B Preferred Stock (or any
securities into which any of such shares are convertible or exchangeable) prior
to compliance by the Company with the provisions of Section 8 of the Series A
Statement of Resolutions Fixing Terms and compliance with Section 4.13 of the
Notes Indenture as in effect on the date hereof.
9. Certain Covenants.
(a) Limitation on Incurrence of Indebtedness and Issuance of
Preferred Stock.
(i) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Debt) and the Company will not issue any Disqualified Stock
and will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that the Company and the Subsidiary
Guarantors may incur Indebtedness (including Acquired Debt) and the Company may
issue shares of Disqualified Stock if the Company's Leverage Ratio at the time
of the incurrence of such Indebtedness or issuance of such Disqualified Stock,
after giving pro-forma effect thereto and to the use of proceeds therefrom, is
less than 7.0 to 1. Accrual of interest, accretion or amortization of original
issue discount and the payment of interest in the form of additional
Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes
of this Section 9(a).
(ii) Notwithstanding clause (i) above, the Company and its
Restricted Subsidiaries may Incur Permitted Indebtedness without regard to the
foregoing limitation provided, however, that the Company will not permit any
Unrestricted Subsidiary to Incur Indebtedness other than Non-Recourse Debt and
in the event such Indebtedness ceases to be Non-Recourse Debt such event shall
be deemed to constitute an Incurrence of Indebtedness by the Company.
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(b) Merger, Consolidation, or Sale of Assets.
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets, in
one or more related transactions, to another Person, and the Company may not
permit any of its Restricted Subsidiaries to enter into any such transaction or
series of transactions if such transaction or series of transactions would, in
the aggregate, result in a sale, assignment, transfer, lease, conveyance, or
other disposition of all or substantially all of the properties or assets of the
Company to another Person unless (i) the Company is the surviving corporation or
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made (the "Surviving Entity") is a
corporation organized or existing under the laws of the United States, any state
thereof or the District of Columbia; (ii) the Series B Preferred Stock shall be
converted into or exchanged for and shall become shares of the Surviving Entity,
having in respect of such successor, transferee or resulting corporation
substantially the same powers, preferences and relative participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereon that the Series B Preferred Stock had immediately prior to such
transaction; (iii) immediately after such transaction, no Voting Rights
Triggering Event, and no event that after the giving of notice or lapse of time
or both would become a Voting Rights Triggering Event, shall have occurred and
be continuing; and (iv) the Company or the Surviving Entity will, at the time of
such transaction or series of transactions and after giving pro forma effect
thereto as if such transaction or series of transactions had occurred at the
beginning of the applicable Four Quarter Period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the test set forth in the first
paragraph of Section 9(a)(i). Notwithstanding the restrictions described in the
foregoing clause (iv), any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company, and
any Wholly Owned Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to another Wholly Owned
Restricted Subsidiary.
(b) Restricted Payments.
(i) The Company and its Restricted Subsidiaries shall not
make any Restricted Payment unless after giving effect thereto (A) no Voting
Rights Triggering Event or event which, with notice or lapse of time or both,
would become a Voting Rights Triggering Event has occurred and is continuing;
(B) such Restricted Payment, together with the aggregate of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after the date of
this Series B Statement of Resolutions Fixing Terms (excluding Restricted
Payments permitted by clauses (B), (C) and (E) of paragraph (ii) below), is less
than the sum of (1) (a) 100% of the aggregate Consolidated Cash Flow of the
Company (or, in the event such Consolidated Cash Flow shall be a deficit, minus
100% of such deficit) accrued for the period beginning on the first day of the
Company's fiscal quarter commencing after the Series A Issue Date and ending on
the last day of the Company's most recent fiscal quarter for which financial
information is available to the Company ending prior to the date of such
proposed Restricted Payment, taken as one accounting period, less (b) 1.4 times
Consolidated Interest Expense for the same period, plus (2) 100% of the
aggregate net cash proceeds and the fair market value of marketable securities
(as determined in good faith by the Company) received by the Company from the
issue or sale since the Series A Issue Date of Equity Interests of the Company
or of debt securities of the Company that have been converted into or exchanged
for such Equity Interests (other than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company, other than Disqualified Stock
or debt securities that have been converted into Disqualified Stock and other
than the Common Stock issued in the Common Stock Offering), plus (3) to the
extent that any Restricted Investment that was made after the Series A Issue
Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of
(a) the net proceeds of such sale, liquidation or repayment and (b) the amount
of such Restricted Investment, plus (4) $5.0 million.
(ii) The provisions in Section 9(c)(i) shall not be
violated by reason of (A) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Series B Statement of Resolutions
Fixing Terms; (B) the redemption, repurchase, retirement or other acquisition of
any Junior Securities or Parity Securities of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Junior Securities or Parity Securities of
the Company (other than any Disqualified Stock); (C) the repurchase, redemption
or other acquisition or retirement for value of any Junior Securities or Parity
Securities of the Company or any Subsidiary of the Company held by any of the
Company's (or any of its Subsidiaries') employees pursuant to
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any management equity subscription agreement or stock option agreement in
connection with the termination of such person's employment for any reason
(including by reason of death or disability); provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired Junior Securities
or Parity Securities shall not exceed $500,000 in any twelve-month period; and
provided further that no Voting Rights Triggering Event shall have occurred and
be continuing immediately after such transaction; and (D) repurchases of Junior
Securities or Parity Securities deemed to occur upon exercise of stock options
if such Junior Securities or Parity Securities represent a portion of the
exercise price of such options.
(d) Designation of Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if such designation would not cause a Voting
Rights Triggering Event. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated will be deemed to
be Restricted Payments at the time of such designation and will reduce the
amount available for Restricted Payments under clause (C) of Section 9(c)(i).
All such outstanding Investments will be deemed to constitute Investments in an
amount equal to the greater of the fair market value or the book value of such
Investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
(e) Limitations on Transactions with Affiliates and Related
Persons.
The Company shall not, and shall not permit any Restricted Subsidiary of the
Company to, make any payment to, or sell, lease, transfer or otherwise dispose
of any of its properties or assets to, or purchase any property or assets from,
or enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any of its Affiliates (each of
the foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) (A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, such Affiliate Transaction or series of related
Affiliate Transactions has been approved in good faith by a majority of the
members of the Board of Directors who are disinterested with respect to such
Affiliate Transaction or series of related Affiliate Transactions, and (B) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, such Affiliate
Transaction or series of related Affiliate Transactions has been approved in
good faith by a resolution adopted by a majority of the members of the Board of
Directors of the Company who are disinterested with respect to such Affiliate
Transaction or series of related Affiliate Transactions and an opinion as to the
fairness to the Company or such Subsidiary of such Affiliate Transaction or
series of related Affiliate Transactions from a financial point of view has been
issued to the Company by an accounting, appraisal, engineering or investment
banking firm of national standing, provided that the following shall not be
deemed Affiliate Transactions: (1) transactions contemplated by any employment
agreement or other compensation plan or arrangement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary,
(2) transactions between or among the Company and/or its Restricted
Subsidiaries, (3) Restricted Payments and Permitted Investments that are
permitted by Section 9(c), (4) indemnification payments made to officers,
directors and employees of the Company or any Restricted Subsidiary pursuant to
charter, bylaw, statutory or contractual provisions and (5) any agreement in
effect as of the Issue Date or any transaction contemplated thereby.
(f) Reports.
Whether or not required by the rules and regulations of the Commission, so long
as any shares of Series B Preferred Stock are outstanding, the Company will
furnish to the Transfer Agent and the Holders, (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries and, with respect to
the annual information only, a report thereon by the Company certified
independent accountants and (ii) all current reports that would be required to
be filed with the
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Commission on Form 8-K if the Company was required to file such reports, in each
case within the time periods set forth in the Commission's rules and
regulations. In addition, whether or not required by the rules and regulations
of the Commission, the Company will file a copy of such information and reports
with the Commission for public availability within the time periods set forth in
the Commission's rules and regulations (unless the Commission will not accept
such filing).
10. Amendment.
Notwithstanding anything to the contrary in the BCA, unless otherwise
provided in Section 2(b) or 7, neither this Series B Statement of Resolutions
Fixing Terms nor the Articles of Incorporation shall be amended in any manner
that would increase or decrease the par value of the shares of the Series B
Preferred Stock or alter or change the powers, preferences or special rights of
the Series B Preferred Stock so as to affect the Holders thereof adversely
without the affirmative vote of the Holders of a majority of the outstanding
Series B Preferred Stock voting separately as a class.
11. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of Series B
Preferred Stock shall not have any voting powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in this Series B Statement of Resolutions Fixing Terms (as such Series
B Statement of Resolutions Fixing Terms may be amended from time to time in
accordance with the terms hereof) and in the Articles of Incorporation. The
shares of Series B Preferred Stock shall have no preemptive or subscription
rights.
12. Headings of Sections.
The headings of the various sections and subsections hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
13. Severability of Provisions.
If any voting powers, preferences and relative, participating, optional
and other special rights of the Series B Preferred Stock and qualifications,
limitations and restrictions thereof set forth in this Series B Statement of
Resolutions Fixing Terms (as this Statement of Resolutions Fixing Terms may be
amended from time to time) is invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, all other voting powers,
preferences and relative, participating, optional and other special rights of
Series B Preferred Stock and qualifications, limitations and restrictions
thereof set forth in this Statement of Resolutions Fixing Terms (as so amended)
which can be given effect without the invalid, unlawful or unenforceable voting
powers, preferences and relative, participating, optional and other special
rights of Series B Preferred Stock and qualifications, limitations and
restrictions thereof, shall, nevertheless, remain in full force and effect, and
no voting powers, preferences and relative, participating, optional or other
special rights of Series B Preferred Stock and qualifications, limitations and
restrictions thereof herein set forth shall be deemed dependent upon any other
such voting powers, preferences and relative, participating, optional or other
special rights of Series B Preferred Stock and qualifications, limitations and
restrictions thereof unless so expressed herein.
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