<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 30, 1996
REGISTRATION NO. 333-02495
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
JACOR COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------------
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OHIO 31-0978313
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
1300 PNC CENTER
201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
(513) 621-1300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------------
R. CHRISTOPHER WEBER
JACOR COMMUNICATIONS, INC.
1300 PNC CENTER
201 EAST FIFTH STREET
CINCINNATI, OHIO 45202
(513) 621-1300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------------
COPIES OF COMMUNICATIONS TO:
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RICHARD G. SCHMALZL, ESQ. GREGG A. NOEL, ESQ.
GRAYDON, HEAD & RITCHEY SKADDEN, ARPS, SLATE, MEAGHER & FLOM
1900 FIFTH THIRD CENTER 300 SOUTH GRAND AVENUE, SUITE 3400
CINCINNATI, OHIO 45202 LOS ANGELES, CALIFORNIA 90071
(513) 621-6464 (213) 687-5000
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
The prospectus contained in this Registration Statement also relates to a
registration statement previously filed with the Commission.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT
NO. 2 TO REGISTRATION STATEMENT NO. 333-02495 TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF CINCINNATI, STATE OF OHIO
ON THIS 30TH DAY OF MAY 1996.
JACOR COMMUNICATIONS, INC.
BY: /s/ JON M. BERRY
-----------------------------------
Jon M. Berry
SENIOR VICE PRESIDENT AND
TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO. 333-02495 HAS BEEN SIGNED ON MAY
30, 1996 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
Principal Executive Officer: Principal Financial and Accounting
Officer:
/s/ RANDY /s/ R. CHRISTOPHER WEBER*
MICHAELS*
- ----------------------------------- -----------------------------------
Randy Michaels R. Christopher Weber
PRESIDENT, CO-CHIEF OPERATING SENIOR VICE PRESIDENT, CHIEF
OFFICER AND DIRECTOR FINANCIAL OFFICER AND SECRETARY
/s/ ROBERT L. /s/ ROD F. DAMMEYER*
LAWRENCE*
- ----------------------------------- -----------------------------------
Robert L. Lawrence Rod F. Dammeyer
CO-CHIEF OPERATING OFFICER AND DIRECTOR
DIRECTOR
/s/ SHELI Z. /s/ F. PHILIP HANDY*
ROSENBERG*
- ----------------------------------- -----------------------------------
Sheli Z. Rosenberg F. Philip Handy
BOARD CHAIR AND DIRECTOR DIRECTOR
/s/ JOHN W. /s/ MARC LASRY*
ALEXANDER*
- ----------------------------------- -----------------------------------
John W. Alexander Marc Lasry
DIRECTOR DIRECTOR
*By: Jon M. Berry as attorney-in-fact,
pursuant to a power of attorney
previously filed.
II-3
<PAGE>
INDEX TO EXHIBITS
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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1.1 Form of Purchase Agreement.
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2.1 Agreement and Plan of Merger dated February 12, 1996 (the "Merger *
Agreement") among Citicasters Inc., the Registrant and JCAC, Inc.
Incorporated by reference to Exhibit 2.1 to the Registrant's Current
Report on Form 8-K dated February 27, 1996.
2.2 Stockholders Agreement dated February 12, 1996 among the Registrant, JCAC, *
Inc., Great American Insurance Company, American Financial Corporation,
American Financial Enterprises, Inc., Carl H. Lindner, The Carl H.
Lindner Foundation and S. Craig Lindner. Incorporated by reference to
Exhibit 2.2 to the Registrant's Current Report on Form 8-K dated February
27, 1996.
2.3 Jacor Shareholders Agreement dated February 12, 1996 among Citicasters Inc. *
and Zell/ Chilmark Fund L.P. Incorporated by reference to Exhibit 2.3 to
the Registrant's Current Report on Form 8-K dated February 27, 1996.
2.4 Escrow Agreement among the Registrant, Citicasters Inc. and PNC Bank dated *
March 13, 1996. Incorporated by reference to Exhibit 2.4 to the
Registrant's Registration Statement on Form S-3 (File No. 333-01917).
2.5 Irrevocable Letter of Credit, Banque Paribas, Chicago Branch dated March *
13, 1996. Incorporated by reference to Exhibit 2.4 to the Registrant's
Registration Statement on Form S-3 (File No. 333-01917).
2.6 Letter of Credit and Reimbursement Agreement by and between the Registrant *
and Banque Paribas dated March 13, 1996. Incorporated by reference to
Exhibit 2.4 to the Registrant's Registration Statement on Form S-3 (File
No. 333-01917).
2.7 Form of Employment Continuation Agreement (executive officer form) between *
Citicasters Inc. and [executive officer] (referred to as exhibit
6.6(c)(i) in Merger Agreement). Incorporated by reference to Exhibit 2.5
to the Registrant's Current Report on Form 8-K dated February 27, 1996.
2.8 Form of Employment Continuation Agreement (management form) between *
Citicasters Inc. and [manager] (referred to as exhibit 6.6(c)(ii) in
Merger Agreement). Incorporated by reference to Exhibit 2.6 to the
Registrant's Current Report on Form 8-K dated February 27, 1996.
2.9 Form of Warrant Agreement between the Registrant, and KeyCorp Shareholder *
Services, Inc., as warrant agent (referred to as exhibit 3.1 in Merger
Agreement). Incorporated by reference to Exhibit 2.7 to the Registrant's
Current Report on Form 8-K dated February 27, 1996.
2.10 Stock Purchase and Stock Warrant Redemption Agreement dated as of February *
20, 1996 among the Registrant, Prudential Venture Partners II, L.P.,
Northeast Ventures, II, John T. Lynch, Frank A. DeFrancesco, Thomas R.
Jiminez, William R. Arbenz, CIHC, Incorporated, Bankers Life Holding
Corporation and Noble Broadcast Group, Inc. ("Noble") (omitting exhibits
not deemed material or filed separately in executed form). [Prudential
and Northeast are sometimes referred to hereafter as the "Class A
Shareholders"; Lynch, DeFrancesco, Jiminez and Arbenz as the "Class B
Shareholders"; and CIHC and Bankers Life as the Warrant Sellers.]
Incorporated by reference to Exhibit 2.1 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
2.11 Investment Agreement dated as of February 20, 1996 among the Registrant, *
Noble and the Class B Shareholders (omitting exhibits not deemed
material). Incorporated by reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended.
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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2.12 Warrant to Purchase Class A Common Stock of Noble issued to the Registrant. *
Incorporated by reference to Exhibit 2.3 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
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2.13 Indemnification and Escrow Agreement dated as of February 20, 1996 among *
the Registrant, Noble, the Class A Shareholders, the Class B
Shareholders, the Warrant Sellers, The Fifth Third Bank and Conseco, Inc.
Incorporated by reference to Exhibit 2.4 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
2.14 Stock Escrow and Security Agreement dated as of February 20, 1996 among the *
Registrant, Noble, the Class B Shareholders, Philip H. Banks, as trustee,
and The Fifth Third Bank, as escrow agent (omitting exhibits not deemed
material or filed separately in executed form). Incorporated by reference
to Exhibit 2.5 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended.
2.15 Trust Agreement dated as of February 20, 1996 among the Class B *
Shareholders and their spouses, and Philip H. Banks, as trustee.
Incorporated by reference to Exhibit 2.6 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
2.16 Registration Rights Agreement dated as of February 20, 1996 between the *
Registrant and Noble. Incorporated by reference to Exhibit 2.7 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
2.17 Asset Purchase Agreement dated as of February 20, 1996 among Chesapeake *
Securities, Inc. (a Registrant subsidiary), Noble Broadcast of San Diego,
Inc., Sports Radio, Inc. and Noble Broadcast Center, Inc. Incorporated by
reference to Exhibit 2.7 to the Registrant's Current Report on Form 8-K
dated March 6, 1996, as amended.
2.18 Jacor--CMM Limited Partnership Agreement of Limited Partnership dated *
January 1, 1994, by and between Jacor Cable, Inc., Up Your Ratings, Inc.
and the Registrant. Incorporated by reference to Exhibit 2.2 of the
Registrant's Annual Report on Form 10-K dated March 30, 1995.
2.19 Amendment No. 1 to Jacor--CMM Limited Partnership Agreement of Limited *
Partnership dated July 22, 1994, by and between Jacor Cable, Inc., Up
Your Ratings, Inc. and the Registrant to amend the Jacor-CMM Limited
Partnership Agreement of Limited Partnership dated January 1, 1994.
Incorporated by reference to Exhibit 2.3 of the Registrant's Annual
Report on Form 10-K dated March 30, 1995.
2.20 Amendment No. 2 to Jacor--CMM Limited Partnership Agreement of Limited *
Partnership with an effective date as of January 1, 1994, by and between
Jacor Cable, Inc., Up Your Ratings, Inc. and the Registrant to amend the
Jacor--CMM Limited Partnership Agreement of Limited Partnership dated
January 1, 1994. Incorporated by reference to Exhibit 2.4 of the
Registrant's Annual Report on Form 10-K dated March 30, 1995.
4.1 Specimen Common Stock Certificate. Incorporated by reference to Exhibit 2.1 *
to the Registrant's Form 8-A, dated January 12, 1993.
4.2 Credit Agreement dated as of February 20, 1996, among the Registrant, the *
Banks named therein, Banque Paribas, as Agent, and The First National
Bank of Boston and Bank of America Illinois, as Co-Agents (omitting
exhibits not deemed material or filed separately in executed form).
Incorporated by reference to Exhibit 4.1 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
4.3 Revolving A Note in favor of Banque Paribas by the Registrant dated as of *
February 20, 1996. (1) Incorporated by reference to Exhibit 4.2 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
</TABLE>
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<TABLE>
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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4.4 Revolving B Note in favor of Banque Paribas by the Registrant dated as of *
February 20, 1996. (1) Incorporated by reference to Exhibit 4.3 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
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4.5 Security Agreement dated as of February 20, 1996 among the Registrant, *
Banque Paribas, as Agent, for itself, the Co-Agents and the Banks.
Incorporated by reference to Exhibit 4.4 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
4.6 Pledge Agreement dated as of February 20, 1996 among the Registrant, Banque *
Paribas, as Agent, for itself, the Co-Agents and the Banks. Incorporated
by reference to Exhibit 4.5 to the Registrant's Current Report on Form
8-K dated March 6, 1996, as amended.
4.7 Trademark Security Agreement dated as of February 20, 1996 among the *
Registrant, Banque Paribas, as Agent, for itself, the Co-Agents and the
Banks. Incorporated by reference to Exhibit 4.6 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended.
4.8 Subsidiary Guaranty dated as of February 20, 1996, by various subsidiaries *
of the Registrant in favor of Banque Paribas, as Agent, for itself, the
Co-Agents and the Banks. (2) Incorporated by reference to Exhibit 4.7 to
the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended.
4.9 Subsidiary Security Agreement dated as of February 20, 1996, by various *
Company subsidiaries in favor of Banque Paribas, as Agent, for itself,
the Co-Agents and the Banks (omitting exhibits not deemed material). (2)
Incorporated by reference to Exhibit 4.8 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
4.10 Primary Pledge Agreement dated as of February 20, 1996 among Chesapeake *
Securities, Inc. (a subsidiary of the Registrant), Banque Paribas as
Agent, for itself, the Co-Agents and the Banks. (3) Incorporated by
reference to Exhibit 4.9 to the Registrant's Current Report on Form 8-K
dated March 6, 1996, as amended.
4.11 Secondary Pledge Agreement dated as of February 20, 1996 between the *
Registrant and Chesapeake Securities, Inc. (a subsidiary of the
Registrant). (4) Incorporated by reference to Exhibit 4.10 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
4.12 Subsidiary Trademark Agreement dated as of February 20, 1996 among Jacor *
Broadcasting of Tampa Bay, Inc., Jacor Broadcasting of Atlanta, Inc.,
Jacor Broadcasting Corporation and Jacor Broadcasting of Florida, Inc. in
favor of Banque Paribas as Agent, for itself, the Co-Agents and the
Banks. Incorporated by reference to Exhibit 4.11 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended.
4.13 Deed to Secure Debt and Security Agreement, dated as of February 20, 1996, *
by and between Jacor Broadcasting of Atlanta, Inc. and Banque Paribas, as
Agent. Incorporated by reference to Exhibit 4.12 to the Registrant's
Current Report on Form 8-K dated March 6, 1996, as amended.
4.14 Deed of Trust and Security Agreement, dated as of February 20, 1996, *
between Jacor Broadcasting of Colorado, Inc. and the Public Trustee in
the County of Weld and the State of Colorado. (6) Incorporated by
reference to Exhibit 4.13 to the Registrant's Current Report on Form 8-K
dated March 6, 1996, as amended.
4.15 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement, *
dated February 20, 1996, by and between Jacor Broadcasting Corporation
and Banque Paribas, as Agent. (7) Incorporated by reference to Exhibit
4.14 to the Registrant's Current Report on Form 8-K dated March 6, 1996,
as amended.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ---------- --------------------------------------------------------------------------- ---------
4.16 Open-End Mortgage, Assignment of Rents and Leases and Security Agreement *
dated as of February 20, 1996, by Jacor Broadcasting of Tampa Bay, Inc.
in favor of Banque Paribas, as Agent. (8) Incorporated by reference to
Exhibit 4.15 to the Registrant's Current Report on Form 8-K dated March
6, 1996, as amended.
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4.17 Deed of Trust and Security Agreement, Assignment of Leases, Rents and *
Profits, Financing Statement and Fixture Filing made by Chesapeake
Securities, Inc. for the Benefit of Banque Paribas as Agent dated as of
February 20, 1996. Incorporated by reference to Exhibit 4.16 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
4.18 Second Consolidated Amended and Restated Intercompany Demand Note issued to *
the Company by various subsidiaries of the Registrant dated as of
February 20, 1996. (5) Incorporated by reference to Exhibit 4.17 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
4.19 Second Amended and Restated Intercompany Security Agreement and Financing *
Statement dated as of February 20, 1996 by various subsidiaries of the
Registrant in favor of the Company (omitting exhibits not deemed
material). (2) Incorporated by reference to Exhibit 4.18 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
4.20(+) Restricted Stock Agreement dated as of June 23, 1993 by and between the *
Registrant and Rod F. Dammeyer. (9) Incorporated by reference to Exhibit
4.2 to the Registrant's Quarterly Report on Form 10-Q dated August 13,
1993.
4.21(+) Stock Option Agreement dated as of June 23, 1993 between the Registrant and *
Rod F. Dammeyer covering 10,000 shares of the Registrant's common stock.
(10) Incorporated by reference to Exhibit 4.3 to the Registrant's
Quarterly Report on Form 10-Q dated August 13, 1993.
4.22(+) Stock Option Agreement dated as of December 15, 1994 between the Registrant *
and Rod F. Dammeyer covering 5,000 shares of the Registrant's common
stock. (11) Incorporated by reference to Exhibit 4.23 to the Registrant's
Quarterly Report on Form 10-Q dated August 13, 1993.
4.23 Form of Indenture for the LYONs.
5.1 Form of Opinion of Graydon, Head & Ritchey.
8.1 Form of Tax Opinion of Graydon, Head & Ritchey (to be filed by amendment). **
10.1 Credit Agreement dated as of February 20, 1996 among Broadcast Finance,
Inc. (a Regis-trant subsidiary), Noble Broadcast Group, Inc. and Noble
Broadcast Holdings, Inc. (omitting exhibits not deemed material or filed
separately in executed form). Incorporated by reference to Exhibit 10.1
to the Registrant's Current Report on Form 8-K dated March 6, 1996, as
amended.
10.2 Subsidiary Guaranty dated as of February 20, 1996 in favor of Broadcast *
Finance, Inc. by Noble Broadcast Center, Inc., Noble Broadcast of
Colorado, Inc., Noble Broadcast of St. Louis, Inc., Noble Broadcast of
Toledo, Inc., Nova Marketing Group, Inc., Noble Broadcast Licenses, Inc.,
Noble Broadcast of San Diego, Inc., Sports Radio, Inc. and Sports Radio
Broadcasting, Inc. Incorporated by reference to Exhibit 10.2 to the
Registrant's Current Report on Form 8-K dated March 6, 1996, as amended.
10.3 Term Note in the amount of $40,000,000 by Noble Broadcast Holdings, Inc. in *
favor of Broadcast Finance, Inc. dated as of February 20, 1996.
Incorporated by reference to Exhibit 10.3 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
</TABLE>
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<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
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10.4 Revolving Note in the amount of $1,000,000 by Noble Broadcast Holdings, *
Inc. in favor of Broadcast Finance, Inc. dated as of February 20, 1996.
Incorporated by reference to Exhibit 10.4 to the Registrant's Current
Report on Form 8-K dated March 6, 1996, as amended.
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10.5(+) Jacor Communications, Inc. 1993 Stock Option Plan. Incorporated by *
reference to Exhibit 99 to the Quarterly Report on Form 10-Q dated August
13, 1993.
10.6(+) Jacor Communications, Inc. 1995 Employee Stock Purchase Plan. Incorporated *
by reference to Exhibit 4.01 to the Registration Statement on Form S-8,
filed on November 9, 1994.
12 Computation of Ratio of Earnings to Fixed Charges. ***
23.1 Consent of Coopers & Lybrand L.L.P. ***
23.2 Consent of Ernst & Young LLP. ***
23.3 Consent of Price Waterhouse LLP. ***
23.4 Consent of Graydon, Head & Ritchey (included in opinion of counsel filed as
Exhibit 5.1).
24 Powers of Attorney. ***
25 Statement of Eligibility of the Bank of New York as Trustee. ***
27.1 Financial Data Schedule of the Registrant. Incorporated by reference to the *
Registrant's Annual Report on Form 10-K for the year ended December 31,
1995, as amended.
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(*) Incorporated by reference.
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(**) To be filed by Amendment.
(***) Previously filed.
(+) Management Contracts and Compensatory Arrangements.
(1) Identical Notes were issued by the Company in favor of the following Banks:
The First National Bank of Boston
Bank of America Illinois
Bank of Montreal
The Bank of New York
The Bank of Nova Scotia
CIBC, Inc.
First Bank
Society National Bank
Union Bank
The aggregate principal amount of Revolving A Notes is $190 million. The aggregate
principal amount of the Revolving B Notes is $110 million.
(2) Executed by the following subsidiaries of the Registrant:
Jacor Broadcasting of Florida, Inc.
Jacor Broadcasting of Atlanta, Inc.
Jacor Broadcasting of Knoxville, Inc.
Jacor Broadcasting of Colorado, Inc.
Jacor Broadcasting of Tampa Bay, Inc.
Jacor Broadcasting of St. Louis, Inc.
Jacor Cable, Inc.
Georgia Network Equipment, Inc.
Jacor Broadcasting Corporation
Broadcast Finance, Inc.
Chesapeake Securities, Inc.
OIA Broadcasting L.L.C.
(3) An identical Primary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
</TABLE>
<PAGE>
<TABLE>
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(4) An identical Secondary Pledge Agreement was executed by Jacor Broadcasting of Atlanta,
Inc.
(5) Such notes were issued by the subsidiaries of the Registrant identified in (2) above.
(6) A substantially similar document was entered into by Jacor Broadcasting of Colorado,
Inc. relating to real property located in Douglas County, Colorado.
(7) A substantially similar document was entered into by Jacor Broadcasting Corporation
relating to real property located in Hamilton County, Ohio.
(8) Substantially similar documents were entered into by Jacor of Tampa Bay, Inc. relating
to real property located in Manatee County, Florida and by Jacor Broadcasting of
Florida relating to real property located in Duval County, Florida and St. Johns
County, Florida.
(9) Substantially identical documents were entered into with John W. Alexander, F. Philip
Handy and Marc Lasry covering 20,000, 30,000 and 10,000 shares of common stock,
respectively.
(10) Identical documents were entered into with John W. Alexander, F. Philip Handy and Marc
Lasry.
(11) Identical documents were entered into with John W. Alexander, F. Philip Handy, Marc
Lasry and Sheli Z. Rosenberg.
</TABLE>
<PAGE>
JACOR COMMUNICATIONS, INC.
(an Ohio corporation)
$225,000,000 Principal Amount At Maturity
Liquid Yield Option-TM- Notes Due 2011
(Zero Coupon - Subordinated)
PURCHASE AGREEMENT
[ ], 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305
Dear Sirs:
Jacor Communications, Inc., an Ohio corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Underwriter"), with respect to the sale by the Company
and the purchase by the Underwriter of $225,000,000 aggregate principal amount
at maturity of its Liquid Yield Option-TM- Notes due 2011 (the "LYONs-TM-") and
with respect to the grant by the Company to the Underwriter of the option
described in Section 2 hereof to purchase all or any part of an additional
$33,750,000 aggregate principal amount at maturity of its LYONs solely to cover
over-allotments. The aforesaid aggregate principal amount at maturity of LYONs
(the "Initial Securities") and all or any part of the $33,750,000 aggregate
principal amount at maturity of the LYONs subject to the over-allotment option
described in Section 2 hereof (the "Option Securities") are collectively
_______________
- -TM- Trademark of Merrill Lynch & Co., Inc.
<PAGE>
referred to herein as the "Securities." The Securities are to be issued
pursuant to an indenture, to be dated as of __________, 1996, as it may be
amended or supplemented from time to time (the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee").
The Securities are convertible into shares of common stock, no par
value per share, of the Company (the "Common Stock"), at any time before the
close of business on the maturity date of the Securities. On __________, 2001
and __________, 2006, the holders of the Securities each have the option to
require the Company to purchase such Securities by paying the issue price of the
Securities plus the accrued original issue discount to the date of purchase,
such payment to be made, at the option of the Company, in cash, in shares of
Common Stock or any combination thereof.
Prior to the purchase and public offering of the Securities by the
Underwriter, the Company and the Underwriter shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company and the Underwriter and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-02495) and a related
preliminary prospectus for the registration of the offering of Securities
including the Common Stock issuable upon conversion thereof under the Securities
Act of 1933, as amended (the "1933 Act"), has filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement (as
amended, if applicable) and the prospectus constituting a part thereof
(including in each case all documents, if any, incorporated by reference therein
and the information, if any, deemed to be part
2
<PAGE>
thereof pursuant to Rule 430A(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations")), as from time to time amended
or supplemented pursuant to the 1933 Act, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that if any
revised prospectus shall be provided to the Underwriter by the Company for use
in connection with the offering of the Securities including the Common Stock
issuable upon conversion thereof which differs from the Prospectus on file at
the Commission at the time the Registration Statement becomes effective (whether
or not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer
to such revised prospectus from and after the time it is first provided to the
Underwriter for such use.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after the
Registration Statement becomes effective, the Pricing Agreement has been
executed and delivered and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
The Securities are being issued and sold in connection with (i) the
merger (the "Merger") of Citicasters Inc., a Florida corporation
("Citicasters"), with and into a wholly owned subsidiary of the Company, and
(ii) the acquisition of all of the equity interests of Noble Broadcasting Group,
Inc., a Delaware corporation ("Noble"), by the Company (the "Noble Acquisition"
and collectively, with the Merger, the "Pending Acquisitions").
The Merger is being effected pursuant to an Agreement and Plan of
Merger, dated as of February 12, 1996 (the "Merger Agreement"), by and among the
Company, JCAC, Inc., a Florida corporation and a wholly owned subsidiary of the
Company (the "Merger Sub"), and Citicasters. Pursuant to the Merger Agreement,
the Company will acquire all of the issued and outstanding capital stock of
Citicasters.
The Noble Acquisition is being effected pursuant to the Stock Purchase
and Stock Warrant Redemption Agreement dated as of February 20, 1996 by and
among the
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Company, Prudential Venture Partners II, L.P., Northeast Ventures, II, John T.
Lynch, Frank A. DeFrancesco, Thomas R. Jiminez, William R. Arbenz, CIHC,
Incorporated, Bankers Life Holding Corporation and Noble (the "Noble Acquisition
Agreement"). Pursuant to the Noble Acquisition Agreement, the Company will
acquire all of the issued and outstanding equity interests of Noble.
Prior to or concurrently with the issuance and sale of the Securities,
the Company will (i) enter into a new credit facility with availability of
$600,000,000 with Chemical Bank, as administrative agent, Banque Paribas, as
documentation agent, Bank of America, Illinois, as syndication agent and certain
lenders named therein (together with the documents and agreements contemplated
thereby, the "New Credit Facility"); (ii) issue and sell 11,250,00 Securities of
Common Stock, no par value per share, of the Company (the"Common Stock")
(excluding 1,687,500 shares of Common Stock which is subject to an over-
allotment option) and (iii) issue and sell $100.0 million aggregate principal
amount of ___% Senior Subordinated Notes due __________, 2006 (the "Sub Notes").
This Underwriting Agreement, the Indenture, the Merger Agreement and all related
agreements and documents, the Noble Acquisition Agreement and all related
agreements and documents, the New Credit Facility and all related agreements and
documents, and all documents and agreements related to each of the Common Stock
offering and the Sub Notes offering are collectively referred to herein as the
"Transaction Documents."
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Underwriter as of the date hereof and as of the date of the
Pricing Agreement (such latter date being hereinafter referred to as the
"Representation Date") as follows:
(a) When the Registration Statement becomes effective,
including at the date of any post-effective amendment, at the date of
the Prospectus (if different) and at the Closing Date, the
Registration Statement will comply in all material respects with the
provisions of the Act, and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements
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<PAGE>
therein not misleading; the Prospectus and any supplements or amendments
thereto will not at the date of the Prospectus, at the date of any such
supplements or amendments and at the Closing Date contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties contained in this paragraph (a) shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus (or any supplement or amendment to them) made in reliance upon
and in conformity with information relating to the Underwriter furnished to
the Company in writing by or on behalf of the Underwriter expressly for use
therein. The Company acknowledges for all purposes under this Agreement
that the statements with respect to price and underwriting discount and the
last paragraph all as set forth on the cover page and in the second and
third sentences of the first paragraph under the caption "Underwriting" in
the Prospectus (or any amendment or supplement) constitute the only written
information furnished to the Company by the Underwriter expressly for use
in the Registration Statement or the Prospectus (or any amendment or
supplement to them) and that the Underwriter shall not be deemed to have
provided any other information (and therefore is not responsible for any
such statement or omission).
(b) Any term sheet and prospectus subject to
completion provided by the Company to the Underwriter for use in
connection with the offering and sale of the Securities pursuant to
Rule 434 under the Act together are not materially different from the
Prospectus included in the Registration Statement.
(c) Each preliminary prospectus and the Prospectus
filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Act, and each Regis-
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<PAGE>
tration Statement filed pursuant to Rule 462(b) under the Act, if any,
complied when so filed in all material respects with the Act.
(d) The Company and each of its Subsidiaries,
Citicasters and Noble have been duly organized, is validly existing as
a corporation in good standing under the laws of its jurisdiction of
organization and has the requisite corporate power and authority to
carry on its business as it is currently being conducted, to own,
lease and operate its properties and, as applicable, to authorize the
offering of the Securities, including the Common Stock issuable upon
conversion thereof to execute, deliver and perform this Agreement, and
to issue, sell and deliver the Securities, including the Common Stock
issuable upon conversion thereof and to execute, deliver and perform
the Transaction Documents, as applicable, and each is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction where the operation, ownership or
leasing of property or the conduct of its business requires such
qualification, except where the failure to be so qualified could not,
singly or in the aggregate, reasonably be expected to have a material
adverse effect on the respective properties, business, results of
operations, condition (financial or otherwise), affairs or prospects
of each of (i) the Company and the Subsidiaries taken as a whole; (ii)
Citicasters and its subsidiaries (collectively referred to herein as
"Citicasters") taken as a whole; and (iii) Noble and its subsidiaries
(collectively referred to herein as "Noble") taken as a whole;
individually (a "Material Adverse Effect").
(e) All of the issued and outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary
have been duly and validly authorized and issued, and all of the
shares of capital stock of, or other ownership interests in, each
Subsidiary are owned, directly or through Subsidiaries, by the Company
and, upon completion of the trans-
6
<PAGE>
actions contemplated by the Transaction Documents, all of the shares of
capital stock of, or other ownership interests in, each of Citicasters and
Noble, will be owned, directly or through Subsidiaries, by the Company.
All such shares of capital stock are fully paid and nonassessable, and are
owned free and clear of any security interest, mortgage, pledge, claim,
lien or encumbrance (each, a "Lien"), except for Liens arising under the
New Credit Facility. There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or
Liens related to or entitling any person to purchase or otherwise to
acquire any shares of the capital stock of, or other ownership interest in,
any Subsidiary.
(f) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
"Capitalization"; all the shares of issued and outstanding Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and not subject to any preemptive or similar rights; the
Securities, including the Common Stock issuable upon conversion
thereof, have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and nonassessable; the capital stock of the Company, including the
Common Stock, conforms in all material respects to all statements
relating thereto in the Prospectus and the Registration Statement; and
the issuance of the Securities, including the Common Stock issuable
upon conversion thereof by the Company will not be subject to
preemptive or other similar rights.
(g) None of the Company and any of the Subsidiaries,
Citicasters or Noble, are in violation of their respective charters or
bylaws or in default in the performance of any bond, debenture, note
or any other evidence of
7
<PAGE>
indebtedness or any indenture, mortgage, deed of trust or other contract,
lease or other instrument to which the Company or any of the Subsidiaries,
Citicasters or Noble is a party or by which any of them is bound, or to
which any of the property or assets of the Company or any of the
Subsidiaries, Citicasters or Noble is subject, except, in the case of
Citicasters or Noble, as could not have a Material Adverse Effect.
(h) This Agreement and the New Credit Facility have
been duly authorized and validly executed and delivered by the Company
and constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms
(assuming, in the case of this Agreement, the due execution and
delivery hereof by you).
(i) The execution and delivery of this Agreement by
the Company, the issuance and sale of the Securities, including the
Common Stock issuable upon conversion thereof, the performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement and the execution and delivery of the Transaction
Documents by each of the Company, Citicasters and Noble, as
applicable, and the consummation of the transactions contemplated by
the Transaction Documents will not (1) conflict with or result in a
breach or violation of any of the respective charters or bylaws of the
Company or any of the Subsidiaries, Citicasters
8
<PAGE>
or Noble, or any of the terms or provisions of, except, in the case of
Citicasters or Noble, as could not have a Material Adverse Effect or (2)
constitute a default or cause an acceleration of any obligation under or
result in the imposition or creation of (or the obligation to create or
impose) a Lien (except for Liens pursuant to the New Credit Facility) with
respect to, any bond, note, debenture or other evidence of indebtedness or
any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of the Subsidiaries, Citicasters or Noble, is a
party or by which it or any of them is bound, or to which any properties of
the Company or any of the Subsidiaries, Citicasters or Noble, is or may be
subject, except, in the case of Citicasters or Noble, as could not have a
Material Adverse Effect, or (3) contravene any order of any court or
governmental agency or body having jurisdiction over the Company or any of
the Subsidiaries, Citicasters or Noble, or any of their properties, or
violate or conflict with any statute, rule or regulation or administrative
or court decree applicable to the Company or any of the Subsidiaries,
Citicasters or Noble, or any of their respective properties, except, in the
case of Citicasters or Noble, as could not have a Material Adverse Effect.
(j) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign,
pending against or affecting the Company or any of the Subsidiaries,
Citicasters or Noble, or any of their respective properties, which is
required to be disclosed in the Registration Statement or the
Prospectus, or which could reasonably be expected to result, singly or
in the aggregate, in a Material Adverse Effect or which could
reasonably be expected to materially and adversely affect the
consummation of this Agreement or the transactions contemplated hereby
or the consummation of the Transaction Documents or the transactions
contemplated thereby, and to the best of the Company's knowledge, no
such proceedings are contemplated or threatened. No contract or
document of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement is not so described or filed.
(k) No action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the issuance of the
Securities, including the Common Stock issuable upon conversion
thereof, sus-
9
<PAGE>
pends the effectiveness of the Registration Statement, prevents or suspends
the use of any preliminary prospectus or suspends the sale of the
Securities, including the Common Stock issuable upon conversion thereof, in
any jurisdiction referred to in Section 4(g) hereof; no injunction,
restraining order or order of any nature by a Federal or state court of
competent jurisdiction has been issued with respect to the Company or any
of the Subsidiaries which would prevent or suspend the issuance or sale of
the Securities, including the Common Stock issuable upon conversion
thereof, the effectiveness of the Registration Statement, or the use of any
preliminary prospectus in any jurisdiction referred to in Section 4(g)
hereof; no action, suit or proceeding is pending against or, to the best of
the Company's knowledge, threatened against or affecting the Company or any
of the Subsidiaries before any court or arbitrator or any governmental
body, agency or official, domestic or foreign, which, if adversely
determined, would materially interfere with or adversely affect the
issuance of the Securities, including the Common Stock issuable upon
conversion thereof, or in any manner draw into question the validity of the
Transaction Documents; and every request of the Commission or any
securities authority or agency of any jurisdiction for additional
information (to be included in the Registration Statement or the Prospectus
or otherwise) has been complied with in all material respects.
(l) (i) None of the Company nor any of the
Subsidiaries, Citicasters or Noble are in violation of any Federal,
state or local laws and regulations relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances, materials or wastes, or
petroleum and petroleum products ("Materials of Environmental
Con
10
<PAGE>
cern"), or otherwise relating to the protection of human health and
safety, or the storage, disposal, transport or handling of Materials
of Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations, except to the extent
that any such violation could not have a Material Adverse Effect or
otherwise require disclosure in the Prospectus; and (ii) to the best
knowledge of the Company and any of the Subsidiaries, Citicasters or
Noble, after due inquiry, (A) none of the Company and any of the
Subsidiaries, Citicasters or Noble, have received any communication
(written or oral), whether from a governmental authority or otherwise,
alleging any such violation or noncompliance, and there are no
circumstances, either past, present or that are reasonably
foreseeable, that may lead to such violation in the future, (B) there
is no pending or threatened claim, action, investigation or notice
(written or oral) by any person or entity alleging potential liability
for investigatory, cleanup, or governmental responses costs, or
natural resources or property damages, or personal injuries,
attorney's fees or penalties relating to (x) the presence, or release
into the environment, of any Material of Environmental Concern at any
location owned or operated by the Company and any of the Subsidiaries,
Citicasters or Noble, now or in the past, or (y) circumstances forming
the basis of any violation, or alleged violation, of any Environmental
Law (collectively, "Environmental Claims") that could have a Material
Adverse Effect or otherwise require disclosure in the Prospectus, and
(C) there are no past or present actions, activities, circumstances,
conditions, events or incidents, that could form the basis of any
Environmental Claim against the Company and any of the Subsidiaries,
Citicasters or Noble or against any person or entity whose liability
for any Environmental Claim the Company and any of the Subsidiaries,
Citicasters or Noble has retained or assumed either contractually or
by operation of law.
11
<PAGE>
In the ordinary course of its business, each of the Company and the
Subsidiaries, Citicasters and Noble conducts a periodic review of the
effect of Environmental Laws on the business, operations and properties of
the in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean- up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties); on the basis of such review, the Company and the Subsidiaries,
Citicasters and Noble have reasonably concluded that such associated costs
and liabilities could not have a Material Adverse Effect.
(m) None of the Company nor any of the Subsidiaries,
Citicasters or Noble has violated any Federal, state or local law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable wage or hour laws, nor any provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") or the
rules and regulations promulgated thereunder, nor has the Company or
any of the Subsidiaries, Citicasters or Noble engaged in any unfair
labor practice, which in each case described in this sentence could
reasonably be expected to result, singly or in the aggregate, in a
Material Adverse Effect. There is (i) no significant unfair labor
practice complaint pending against the Company or any of the
Subsidiaries, Citicasters or Noble or, to the best knowledge of the
Company, threatened against any of them, before the National Labor
Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending
against the Company or any of the Subsidiaries, Citicasters or Noble
or, to the best knowledge of the Company, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stop
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<PAGE>
page pending against the Company or any of its Subsidiaries, Citicasters or
Noble or, to the best knowledge of the Company, threatened against the
Company or any of the Subsidiaries, Citicasters or Noble and (iii) to the
best knowledge of the Company, no union representation question existing
with respect to the employees of the Company or any of the Subsidiaries,
Citicasters or Noble and, to the best knowledge of the Company, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, singly or in the aggregate)
such as could not have a Material Adverse Effect.
(n) The Company and each of its Subsidiaries,
Citicasters and Noble have good and marketable title, free and clear
of all Liens, to all property and assets described in the Registration
Statement as being owned by it, except for (i) Liens pursuant to the
New Credit Facility, (ii) Liens on general office equipment which are
not material to the Company's operations and (iii) Liens pursuant to
the bank credit agreement entered into by Citicasters in October 1994.
All leases to which the Company or the Subsidiaries, Citicasters or
Noble are a party are valid and binding and no default has occurred or
is continuing thereunder and the Company and each of its Subsidiaries,
Citicasters and Noble enjoy peaceful and undisturbed possession under
all such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the
Company or any such Subsidiary, Citicasters and Noble.
(o) The respective firm of accountants that has
certified or shall certify the applicable consolidated financial
statements and supporting schedules of the Company, Citicasters and
Noble filed or to be filed with the Commission as part of the
Registration Statement and the Prospectus are independent public
accountants with respect to the Company and the Subsidiaries,
Citicasters or Noble as
13
<PAGE>
required by the Act. The consolidated historical and PRO FORMA financial
statements, together with related schedules and notes, set forth in the
Prospectus and the Registration Statement comply as to form in all material
respects with the requirements of the Act. Such historical financial
statements fairly present the consolidated financial position of the
Company and the Subsidiaries at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout such periods. Such PRO FORMA
financial statements have been prepared on a basis consistent with such
historical statements, except for the PRO FORMA adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly the historical and proposed transactions contemplated by the
Prospectus and the Transaction Documents. The other financial and
statistical information and data included in the Prospectus and in the
Registration Statement, historical and PRO FORMA, are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company, Citicasters
and Noble.
(p) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and up to the Closing Date, none of the Company and any of the
Subsidiaries, Citicasters or Noble have incurred any liabilities or
obligations, direct or contingent, which are material to the Company
and the Subsidiaries taken as a whole, Citicasters or Noble,
respectively, nor entered into any transaction not in the ordinary
course of business and there has not been, singly or in the aggregate,
any material adverse change, or any development which could reasonably
be expected to involve a material adverse change, in the properties,
business, results of operations, condition (financial or
14
<PAGE>
otherwise), affairs or prospects of the Company and the Subsidiaries taken
as a whole, Citicasters or Noble, respectively each individually (a
"Material Adverse Change").
(q) All tax returns required to be filed by the
Company and any of the Subsidiaries, Citicasters and Noble in any
jurisdiction have been filed, other than those filings being contested
in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or
claimed to be due from such entities have been paid, other than those
being contested in good faith and for which adequate reserves have
been provided or those currently payable without penalty or interest.
(r) No authorization, approval or consent or order of,
or filing with, any court or governmental body or agency is necessary
in connection with the transactions contemplated by the Transaction
Documents, except such as may be required by the NASD or have been
obtained and made under the Act, the Exchange Act, the Trust Indenture
Act of 1939, as amended (the "TIA") or state securities or "Blue Sky"
laws or regulations. Neither the Company nor any of its affiliates is
presently doing business with the government of Cuba or with any
person or affiliate located in Cuba.
(s) (i) Each of the Company and the Subsidiaries,
Citicasters and Noble have all certificates, consents, exemptions,
orders, permits, licenses, authorizations, or other approvals (each,
an "Authorization") of and from, and has made all declarations and
filings with, all Federal, state, local and other governmental
authorities (including the Federal Communications Commission ("FCC")),
all self-regulatory organizations and all courts and other tribunals,
necessary or required to own, lease, license and use its properties
and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
could
15
<PAGE>
not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect, (ii) all such Authorizations are valid and
in full force and effect, (iii) each of the Company and the
Subsidiaries, Citicasters and Noble are in compliance in all material
respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and
governing bodies having jurisdiction with respect thereto and (iv)
each commercial radio broadcast station identified in the Prospectus
as owned and operated by any of the Company, the Subsidiaries,
Citicasters or Noble, as applicable, are operating with the maximum
facilities specified by the Authorization pertaining thereto.
(t) Neither the Company nor any of the Subsidiaries is
(a) an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as
amended, or (b) a "holding company" or a "subsidiary company" of a
holding company, or an "affiliate" thereof within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(u) No holder of any security of the Company has or
will have any right to require the registration of such security by
virtue of any transaction contemplated by this Agreement.
(v) The Securities have been approved for quotation on
the Nasdaq SmallCap Market, subject to notice of issuance.
(w) Each of the Company and the Subsidiaries,
Citicasters and Noble possess the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, "Intellectual Property") presently employed
by them in connection with the businesses now operated by them, and
16
<PAGE>
none of the Company and the Subsidiaries, Citicasters or Noble have
received any notice of infringement of or conflict with asserted
rights of others with respect to the foregoing which, singly or in the
aggregate, could reasonably be expected to result in any Material
Adverse Change. The use of such Intellectual Property in connection
with the business and operations of each of the Company and the
Subsidiaries, Citicasters and Noble does not, to the Company's
knowledge, infringe on the rights of any person except where any such
infringement has not resulted in, or could not reasonably be expected
to result in any Material Adverse Change.
(x) Each certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the
Underwriter shall be deemed to be a representation and warranty by the
Company to the Underwriter as to the matters covered thereby.
(y) Each of the Company and the Subsidiaries,
Citicasters and Noble maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and
to maintain asset accountability; (3) access to assets is permitted
only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) The Company has not (i) taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which could reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of
17
<PAGE>
the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(aa) Each of the Company and the Subsidiaries,
Citicasters and Noble maintains insurance covering their properties,
operations, personnel and businesses. Such insurance insures against
such losses and risks as are adequate in accordance with customary
industry practice to protect the Company and its Subsidiaries and
their businesses. None of the Company and any Subsidiary,
Citicasters or Noble have received notice from any insurer or agent
of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such
insurance. All such insurance is outstanding and duly in force on
the date hereof and will be outstanding and duly in force on the
Closing Date.
(bb) None of the Company, Citicasters or Noble have,
directly or indirectly, paid or delivered any fee, commission or other
sum of money or item or property, however characterized, to any
finder, agent, government official or other party, in the United
States or any other country, which is in any manner related to the
business or operations of the Company, Citicasters or Noble,
respectively, which the Company knows or has reason to believe to have
been illegal under any Federal, state or local laws of the United
States or any other country having jurisdiction; and none of
the Company, Citicasters or Noble have participated, directly or
indirectly, in any boycotts or other similar practices in contravention
of law affecting any of its actual or potential customers.
(cc) Except as disclosed in the Prospectus, none of the
Company, Citicasters or Noble own any "margin securities" as that term
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<PAGE>
is defined in Regulations G and U of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), and none of the
proceeds of the sale of the Securities will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security
or for any other purpose which might cause any of the Securities to be
considered a "purpose credit" within the meanings of Regulation G, T,
U or X of the Federal Reserve Board.
(dd) Each person described in the Prospectus as a
person to whom the Company or any of the Subsidiaries provides
programming pursuant to a local marketing agreement or a joint sales
agreement (a "Licensee") has been issued by the FCC an FCC license
(which is in full force and effect) for the operation of the
commercial radio broadcast station identified in the Prospectus as
programmed by the Company or any of its Subsidiaries, which licenses
expire on the dates set forth in the Prospectus.
(ee) Each person described in the Prospectus as a
person to whom the Company or any of the Subsidiaries provides
programming pursuant to an exclusive sales agency agreement (a
"Mexican Licensee"), has been issued by the Mexican government all
necessary Mexican licenses (which are in full force and effect) for
the operation of the commercial radio broadcast station identified in
the Prospectus as programmed by the Company or any of its
Subsidiaries. Each of the Company and its Subsidiaries have all
Authorizations necessary to deliver programming to the Mexican
Licensees.
(ff) Each of the Company and its Subsidiaries,
Citicasters and Noble has filed with the FCC all material reports,
documents, instruments, information and applications required to be
filed pursuant to the FCC's rules, regulations and requests. No
notice has been
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<PAGE>
issued by the FCC which could permit, or after notice or lapse of time or
both could permit, revocation or termination of any FCC license of any of
the Subsidiaries, or Noble or its subsidiaries or Citicasters or its
subsidiaries, or to the knowledge of the Company, of any of the Licensees
prior to the expiration dates thereof or which could reasonably be expected
to result in any other material impairment of any of the Company's,
Subsidiaries or Noble or its subsidiaries or Citicasters or its
subsidiaries or, to the knowledge of the Company, of any of the Licensees'
rights thereunder and which could reasonably be expected to, singly or in
the aggregate, have a Material Adverse Effect.
(gg) Each of the Stations is now operating, and has
operated, in compliance in all material respects with the
Communications Act of 1934, as amended (the "Communications Act"), and
the published rules and regulations of the FCC. There is not issued,
outstanding or pending any Notice of Violation, Notice of Apparent
Liability, Order to Show Cause, material complaint or investigation by
or before the FCC which could materially threaten or materially
adversely affect any of the Company's or any of its Subsidiary's,
Noble's or its subsidiaries', Citicasters' or its subsidiaries' or, to
the knowledge of the Company, any Licensees' FCC licenses or which
could reasonably be expected to result in any material adverse effect
upon any of the Company's, Subsidiaries', Noble or its subsidiaries,
Citicasters or its subsidiaries or, to the knowledge of the Company,
any Licensees' operation of its respective stations and which could
reasonably be expected to, singly or in the aggregate, have a Material
Adverse Effect, nor does the Company have reason to believe that the
FCC licenses with respect to the Stations will not be renewed for a
full eight year term when such FCC licenses are due for renewal.
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(hh) The execution, delivery and performance of the
obligations by the Company under this Agreement are not and will not
be contrary to the Communications Act, as amended, will not result in
any violation of the FCC's published rules and regulations, will not
cause any forfeiture or impairment of any FCC license of any of the
Stations by or before the FCC, and will not require any consent,
approval or authorization of the FCC.
(ii) The execution, delivery and performance of the
obligations by each of the parties to the Merger Agreement and the
Noble Acquisition Agreement are not and will not be contrary to the
Communications Act, will not result in any violation of the FCC's
published rules and regulations, will not cause any forfeiture or
impairment of any FCC license of any of the Stations by or before the
FCC, and will not require any consent, approval or authorization of
the FCC (other than approval for a transfer of control over the
relevant Stations). All necessary applications, exhibits or other
filings required by the FCC for transfer of control of the Stations
now controlled by Citicasters and Noble pursuant to the Merger
Agreement and the Noble Acquisition Agreement have been filed with the
FCC (the "Transfer Applications"). To the best of the Company's
knowledge, there are no circumstances that would cause the FCC to
reject the Transfer Applications.
(jj) For purposes of considering the application of
the local ownership rules contained in the Telecommunications Act of
1996, the Denver market contains more than 45 commercial stations.
(kk) The Company, Merger Sub, Citicasters and Noble
(each, a "Merger Party" and, collectively the "Merger Parties") have,
to the extent each is or will be a party thereto, all requisite
corporate power and authority to execute, deliver and perform their
respective obligations under each of the Transaction
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<PAGE>
Documents; each of the Transaction Documents has been duly and validly
authorized, executed and delivered by the Merger Parties, to the extent
each is a party thereto, and each constitutes a valid and legally binding
agreement of the Merger Party enforceable against each Merger Party in
accordance with its terms; except as set forth in the Prospectus, no
consent, approval, authorization or order of any court or governmental
agency or body is required for the performance of any of the Transaction
Documents by each of the Merger Parties, to the extent each is a party
thereto, or the consummation by each of the Merger Parties of any of the
transactions contemplated thereby, except such as may be required and have
been obtained, or upon effectiveness of the Registration Statement, will
have been obtained, under the Act, the Exchange Acts, the TIA, or state
securities or "Blue Sky" laws or regulations or such as may be required by
the NASD in connection with the purchase and distribution of the Securities
by the Underwriters; and none of the Merger Parties is (i) in violation of
its charter or bylaws, (ii) in violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of their
respective properties or assets, which violation would have a Material
Adverse Effect, or (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any of the
Transaction Documents or any other contract, indenture, mortgage, deed of
trust, loan agreement note, lease, license, franchise agreement, permit,
Authorizations, certificate or agreement or instrument to which any of them
is a party or to which any of them is subject, which default would have a
Material Adverse Effect.
(ll) The execution, delivery and performance by the
Merger Parties, to the extent each is a party thereto, of each of the
Transaction Documents, and the consummation by the respective Merger
Parties of the transactions contemplated thereby, will not violate,
conflict with or constitute or result in a
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breach of or a default under (or an event which, with notice or lapse of
time, or both, would constitute a breach of or a default under) any of (i)
the terms or provisions of any of the Transaction Documents or any other
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, or agreement or instrument to which a Merger Party, is
a party or to which any of their respective properties or assets are
subject, which violation, conflict, breach or default would have a Material
Adverse Effect, (ii) the charter or bylaws of the Merger Party, or (iii)
any statute, judgment, decree, order, rule or regulation of any court,
governmental agency or other body or self regulatory organization
applicable to each Merger Party, or any of their respective properties or
assets, which violation, conflict, breach or default would have a Material
Adverse Effect.
(mm) The Merger and the Noble Acquisition have been
duly authorized by the relevant Merger Parties and the transactions
contemplated by the Transaction Documents have been approved, to the
extent required, by all appropriate corporate action; approval of the
transactions contemplated by the Transaction Documents by the
shareholders of the Company is not required; the Transaction Documents
conform and the Merger and the Noble Acquisition will conform in all
material respects to the descriptions thereof in the Prospectus.
(nn) The Company has delivered to the Underwriter a
true and correct copy of each of the Transaction Documents that have
been executed and delivered prior to the date of this Agreement and
each other Transaction Document in the form substantially as it will
be executed and delivered, together with all related agreements and
all schedules and exhibits thereto, and there have been no amendments,
alterations, modifications or waivers of any of the provisions of any
of the Transaction Documents since their date of execution or from the
form in which it has been delivered to the
23
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Underwriter; there exists as of the date hereof (after giving effect to the
transactions contemplated by the Transaction Documents) no event or
condition which would constitute a default or an event of default (in each
case as defined in the New Credit Facility, the Common Stock or the Sub
Notes, respectively) under the New Credit Facility, the Common Stock or the
Sub Notes, respectively, and no event or condition which would constitute a
default or an event of default (in each case as defined in each of the
Transaction Documents) under any of the Transaction Documents other than
the New Credit Facility, the Common Stock or the Sub Notes, respectively,
which would result in a Material Adverse Effect or materially adversely
effect the ability of each of the Company, Citicasters or Noble to
consummate the transactions contemplated by the Transaction Documents.
(oo) No director, officer or substantial shareholder
of the Company has a 5% or greater interest (or no such persons
collectively have a 10% or greater interest), directly or indirectly,
in Citicasters or Noble.
(pp) The shares of Common Stock to be issued pursuant
to the Merger Agreement, will not have upon issuance, voting power
equal to or in excess of 20% of the voting power outstanding before
the issuance of the common stock or securities convertible into or
exercisable for Common Stock.
(qq) The Securities have received a rating of B3 from
Moody's Investor Services ("Moody's"); and the Sub Notes have received
a rating of B2 from Moody's.
(rr) Each of the representations and warranties
contained in each of the Transaction Documents are true and correct on
and as of the date hereof, except as could not have a Material Adverse
Effect.
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<PAGE>
SECTION 2. SALE AND DELIVERY TO UNDERWRITER; CLOSING. On the basis
of the representations and warranties herein contained and subject to the terms
and conditions herein set forth, the Company agrees to sell to the Underwriter
and the Underwriter agrees to purchase from the Company, at the price per $1,000
principal amount at maturity set forth in the Pricing Agreement, the Initial
Securities.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price, the initial conversion
rate and the purchase price (per $1,000 principal amount at maturity) to be paid
by the Underwriter for the Securities have each been determined and set forth in
the Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus will be filed before the Registration
Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the purchase price (per $1,000 principal amount at maturity) to
be paid by the Underwriter for the Securities shall be an amount equal to the
initial public offering price, less an amount per Security to be determined by
agreement between the Underwriter and the Company. The initial public offering
price (per $1,000 principal amount at maturity) of the Securities and the
initial conversion rate applicable to the Securities likewise shall be
determined by agreement between the Underwriter and the Company. The initial
public offering price, the initial conversion rate and the purchase price, when
so determined, shall be set forth in the Pricing Agreement. In the event that
such prices have not been agreed upon and the Pricing Agreement has not been
executed and delivered by the parties thereto by the close of business on the
fourth business day following the date of this Agreement, this Agreement shall
terminate forthwith, without liability of any party to any other party, unless
otherwise agreed to by the Company and the Underwriter.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriter, to purchase from
it any or all of the Option Securities (in
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<PAGE>
multiples of $1,000 principal amount at maturity) at the same price (per $1,000
principal amount at maturity) as is to be paid by the Underwriter for the
Initial Securities, plus accrued amortization of original issue discount, if
any, on the terms set forth in the Pricing Agreement. The option hereby granted
will expire 30 days after (i) the date the Registration Statement becomes
effective, if the Company has elected not to rely on Rule 430A under the 1933
Act Regulations, or (ii) the Representation Date, if the Company has elected to
rely on Rule 430A under the 1933 Act Regulations, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Underwriter to the Company setting forth
the number of Option Securities as to which the Underwriter is then exercising
the option and the time and date of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Underwriter, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to the Closing
Time, as hereinafter defined, unless otherwise agreed by the Underwriter and the
Company.
(c) Delivery of the Initial Securities shall be made at the
offices of the Underwriter in New York City, and payment of the purchase price
for the Initial Securities shall be made at the offices of counsel for the
Company in __________, ____, or, in each case, at such other place as shall be
agreed upon by the Underwriter and the Company, at 10:00 A.M., New York City
time, on the fourth business day following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
fourth business day after execution of the Pricing Agreement), or such other
time not later than ten business days after such date as shall be agreed upon by
the Underwriter and the Company (such time and date of payment and delivery
being herein called the "Closing Time"). In addition, in the event that any or
all of the Option Securities are purchased by the Underwriter, payment of the
purchase price for, and delivery of certificates for, such Option Securities
shall be made at the offices set forth above, or at such other place as shall be
agreed upon by the Underwriter and the Company, on the Date of Delivery as
specified in the notice from the Underwriter to the
26
<PAGE>
Company. Payment shall be made by certified or official bank check or checks
drawn in New York Clearing House funds or similar next day funds payable to the
order of the Company against delivery to the Underwriter of certificates for the
Securities to be purchased by it. Certificates for the Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Underwriter may request in writing at least two business days
before Closing Time or the Date of Delivery, as the case may be. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Underwriter not later
than 10:00 A.M., New York City time, on the last business day prior to the
Closing Time or the Date of Delivery, as the case may be, in New York City.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Underwriter as follows:
(a) It will, if the Registration Statement has not
heretofore become effective under the Act, file an amendment to the
Registration Statement or, if necessary pursuant to Rule 430A under
the Act, a post-effective amendment to the Registration Statement, in
each case as soon as practicable after the execution and delivery of
this Agreement, and will use its best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company will comply
fully and in a timely manner with the applicable provisions of Rule
424 and Rule 430A, and if applicable, Rule 462, under the Act.
(b) It will advise you promptly and, if requested by any of
you, confirm such advice in writing, (i) when the Registration
Statement has become effective, if and when the Prospectus is sent for
filing pursuant to Rule 424 under the Act and when any post-effective
amendment to the Registration Statement becomes effective, (ii) of the
receipt of any comments from the Commission or any state securities
commission or regulatory authority that relate to the Registration
Statement or requests by
27
<PAGE>
the Commission or any state securities commission or regulatory authority
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by the Commission or any state securities
commission or other regulatory authority, and (iv) of the happening of any
event during such period as in your reasonable judgment you are required to
deliver a prospectus in connection with sales of the Securities by you
which makes any statement of a material fact made in the Registration
Statement untrue or which requires the making of any additions to or
changes in the Registration Statement (as amended or supplemented from
time to time) in order to make the statements therein not misleading
or that makes any statement of a material fact made in the Prospectus
(as amended or supplemented from time to time) untrue or which
requires the making of any additions to or changes in the Prospectus
(as amended or supplemented from time to time) in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The Company shall use its best efforts to
prevent the issuance of any stop order or order suspending the
qualification or exemption of the Securities under any state
securities or Blue Sky laws, and, if at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption of the Securities under any state securities or Blue Sky
laws, the Company shall use every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
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<PAGE>
(c) It will furnish to you without charge two (2) signed
copies (plus one (1) additional signed copy to your legal counsel) of
the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits filed therewith, and will
furnish to you such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, without exhibits,
as you may reasonably request.
(d) It will not file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or make any amendment or supplement to the
Prospectus, of which you shall not previously have been advised and
provided a copy within two business days prior to the filing thereof
(or such reasonable amount of time as is necessitated by the exigency
of such amendment or supplement) or to which you shall reasonably
object; and it will prepare and file with the Commission, promptly
upon your reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by
you, and will use its best efforts to cause any amendment to the
Registration Statement to become effective as promptly as possible.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period in your
reasonable judgment as a prospectus is required to be delivered in
connection with sales of the Securities by you, it will furnish to
each Underwriter and dealer without charge as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriters and dealers may reasonably request. The Company
consents to the use of the Prospectus and any amendment or supplement
thereto by any Underwriter or any dealer, both in connection with the
offering or sale of the Securities and for such period of time
thereafter as the Prospectus is required by the Act or the
29
<PAGE>
Exchange Act to be delivered in connection therewith.
(f) If during such period as in your reasonable judgment
you are required to deliver a prospectus in connection with sales of
the Securities by you any event shall occur as a result of which it
becomes necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances
existing as of the date the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, it will promptly prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances existing as
of the date the Prospectus is so delivered, be misleading, and will
comply with applicable law, and will furnish to each Underwriter and
dealer without charge such number of copies thereof as such
Underwriters and dealers may reasonably request.
(g) Prior to any public offering of the Securities, it will
cooperate with you and your counsel in connection with the
registration or qualification of the Securities[, including the Common
Stock issuable upon conversion thereof,] for offer and sale by you
under the state securities or Blue Sky laws of such jurisdictions as
you may request (provided, that the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is
not so qualified or to take any action that would subject it to
general consent to service of process in any jurisdiction in which it
is not now so subject). The Company will continue such qualification
in effect so long as required by law for distribution of the
Securities.
(h) It will make generally available to its security
holders as soon as reasonably practicable a consolidated earning
statement
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covering a period of at least twelve months beginning after
the "effective date" (as defined in Rule 158 under the Act) of the
Registration Statement (but in no event commencing later than 90 days
after such date) which shall satisfy the provisions of Section 11(a)
of the Act and Rule 158 thereunder, and to advise you in writing when
such statement has been so made available.
(i) It will timely complete all required filings and
otherwise fully comply in a timely manner with all provisions of the
Exchange Act.
(j) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to shareholders or filed with the Commission, and
(ii) from time to time such other information concerning the Company
as you may request.
(k) It will use the proceeds from the sale of the
Securities in the manner described in the Prospectus under the caption
"Use of Proceeds."
(l) It will cause the Securities to be quoted on the Nasdaq
SmallCap Market and will use its reasonable best efforts to maintain
such quotation while any of the Securities are outstanding.
(m) It will use its best efforts to do and perform all
things required to be done and performed under this Agreement by it
prior to or after the Closing Date and to satisfy all conditions
precedent on its part to the delivery of the Securities.
(n) It will timely complete all required filings and
otherwise comply fully in a timely manner with all provisions of the
Exchange Act, and will file all reports and any definitive proxy or
information statements required to be filed by the Company with the
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Commission pursuant to Sections 13(a), 13(c), 14(a) or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offer or sale of the Securities, including the Common Stock issuable
upon conversion thereof.
(o) During the period beginning on the date of this
Agreement and continuing to and including the Closing Date, except as
described in the Prospectus with respect to the Merger or the Noble
Acquisition, there will be no transactions entered into by the Company
or any of its subsidiaries (each a "Subsidiary" and, collectively, the
"Subsidiaries"), Citicasters or Noble which are material with respect
to the Company or any of the Subsidiaries, Citicasters or Noble,
respectively, taken individually or as a whole, and there will be no
dividend or distribution of any kind declared, paid or made by the
Company on any class of capital stock or other equity interests.
SECTION 4. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, the Company
will pay and be responsible for all costs, expenses, fees and taxes in
connection with or incident to (i) the printing, processing, filing,
distribution and delivery under the Act or the Exchange Act of the Registration
Statement, each preliminary prospectus, the Prospectus and all amendments or
supplements thereto, (ii) the printing, processing, execution, distribution and
delivery of this Agreement, any memoranda describing state securities or Blue
Sky laws and all other agreements, memoranda, correspondence and other documents
printed, distributed and delivered in connection with the offering of the
Securities, (iii) the registration with the Commission and the issuance and
delivery of the Securities, (iv) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
jurisdictions referred to in paragraph (g) above (including, in each case, the
fees and disbursements of counsel relating to such registration or qualification
and memoranda relating thereto and any filing fees in connection therewith), (v)
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<PAGE>
furnishing such copies of the Registration Statement, Prospectus and preliminary
prospectus, and all amendments and supplements to any of them, as may be
reasonably requested by you, (vi) filing, registration and clearance with the
NASD in connection with the offering of the Securities (including any filing
fees in connection therewith and the fees and disbursements of counsel relating
thereto), (vii) the listing of the Securities on the Nasdaq Stock Market's
SmallCap Market (the "NASDAQ SmallCap Market"), (viii) the rating of the
Securities and the Sub Notes by investment rating agencies, (ix) any "qualified
independent underwriter" as required by Schedule E of the Bylaws of the NASD
(including fees and disbursements of counsel for such qualified independent
underwriter), (x) the printing, processing, execution, distribution and delivery
of the Transaction Documents and all other agreements, memoranda, correspondence
and other documents, printed, distributed and delivered in connection with the
Transaction Documents and (xi) the performance by the Company of its other
obligations under this Agreement, the cost of its personnel and other internal
costs, the cost of printing and engraving the certificates representing the
Securities, and all expenses and taxes incident to the sale and delivery of the
Securities to you.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations
of the Underwriter hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the
Closing Date. The Company shall have performed or complied with all
of its obligations and agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) (i) The Registration Statement shall have become effective (or,
if a post-effective amendment is required to be filed pursuant to Rule 430A
promulgated under the Act, such post-effective amend-
33
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ment shall have become effective) not later than 10:00 A.M. (and in the
case of a Registration Statement filed under Rule 462(b) of the Act, not
later than 10:00 P.M.), New York City time, on the date of this Agreement
or at such later date and time as you may approve in writing, (ii) at the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or
contemplated by the Commission and every request for additional information
on the part of the Commission shall have been complied with in all material
respects, and (iii) no stop order suspending the sale of the Securities in
any jurisdiction referred to in Section 5(g) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending
or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Securities, including the Common Stock issuable upon
conversion thereof,; and no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the
issuance of the Securities, including the Common Stock issuable upon
conversion thereof, the Common Stock, or the Sub Notes or the
consummation of the transactions contemplated by the Transaction
Documents.
(d) (i) Since the date hereof or since the dates as of which
information is given in the Registration Statement and the Prospectus,
there shall not have been any Material Adverse Change, (ii) since the
date of the latest balance sheet included in the Registration
Statement and the Prospectus, there shall not have been any material
change in the capital stock or long-term debt, or material increase in
short-term debt, of the Company or any of the Subsidiaries taken as a
whole, Citicasters or
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Noble and (iii) the Company and the Subsidiaries taken as a whole,
Citicasters or Noble shall have no liability or obligation, direct or
contingent, that is material to the Company and the Subsidiaries taken as a
whole, Citicasters or Noble, respectively, and is required to be disclosed
on a balance sheet in accordance with GAAP and is not disclosed on the
latest applicable balance sheet included in the Registration Statement and
the Prospectus.
(e) You shall have received a certificate of the Company, dated
the Closing Date, executed on behalf of the Company, by the President
or any Vice President and a principal financial or accounting officer
of the Company confirming, as of the Closing Date, the matters set
forth in paragraphs (a), (b), (c) and (d) of this Section 5.
(f) On the Closing Date, you shall have received:
(1) an opinion (satisfactory to you and your counsel), dated the
Closing Date, of Graydon, Head & Ritchey, counsel for the Company, to the effect
that:
(i) (A) the Company and each of the Subsidiaries is a
duly organized and validly existing corporation in good standing under
the laws of its jurisdiction of incorporation, has the requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement
and the Prospectus, and is duly qualified as a foreign corporation and
in good standing in each jurisdiction where the ownership, leasing or
operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified could not
be reasonably expected to have, singly or in the aggregate, a Material
Adverse Effect; and (B) the Company has the requisite corporate power
and authority to execute, deliver and perform this Agreement;
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(ii) (A) the Company has full power and authority to
execute, deliver and perform its obligations under the Transaction
Documents;
(iii) the Transaction Documents have been duly
authorized, executed and delivered by the Company;
(iv) (A) the authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus under
"Capitalization" and conforms in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus; (B) the shares of issued and outstanding Common Stock,
have been duly authorized and are validly issued and are fully paid
and nonassessable; (C) the Securities have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be validly
issued and fully paid and nonassessable; and (D) the issuance of the
Securities is not subject to preemptive or other similar rights;
(v) all of the issued and outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary
have been duly and validly authorized and issued, and the shares of
capital stock of, or other ownership interests in, each Subsidiary are
owned, directly or through Subsidiaries, by the Company, are fully
paid and nonassessable, and are owned free and clear of any Lien,
except for Liens pursuant to the New Credit Facility;
(vi) to the knowledge of such counsel (after due
inquiry) there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or Liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other
36
<PAGE>
ownership interest in, any Subsidiary except as disclosed in the
Prospectus;
(vii) neither the Company nor any of the Subsidiaries
is (a) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of
1940, as amended, or (b) a "holding company" or a "subsidiary company"
of a holding company, or an "affiliate" thereof within the meaning of
the Public Utility Holding Company Act of 1935, as amended;
(viii) neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Securities, the Common Stock or the Sub Notes will
violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System;
(ix) when authenticated in accordance with the terms
of the indenture and delivered to and paid for in accordance with the
terms of the agreement, the Sub Notes will constitute a valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with its terms and entitled to the benefits of
the indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that a waiver
of rights under any usury laws may be unenforceable;
(x) the shares of common stock, no par value per
share, initially issuable upon conversion of the Securities have been
duly authorized and reserved for issuance upon conversion of the
Securities, are free of preemptive rights and, when issued upon
conversion of the Securities in accordance with the terms of the
Indenture, will be validly issued, fully paid and non-assessable;
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(xi) the Indenture, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except
to the extent that a waiver of rights under any usury laws may be
unenforceable;
(xii) when authenticated in accordance with the terms
of the Indenture and delivered to and paid for in accordance with the
terms of this Agreement, the Securities will constitute a valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of
the indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that a waiver
of rights under any usury laws may be unenforceable;
(xiii) to the best knowledge of such counsel, there is
no current, pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiary or to which any of their
respective properties is subject of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus;
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(xiv) the descriptions in the Registration Statement
and the Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate in all material respects
and fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings
required to be described in the Registration Statement or Prospectus
which are not described as required or of any contracts or documents
of a character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required; it being understood
that such counsel need express no opinion as to the financial
statements, notes or schedules or other financial data included
therein;
(xv) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements and term sheets thereto, pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and to the knowledge of such counsel (after due inquiry) no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings therefor have been
instituted or are pending or contemplated under the Act;
(xvi) no authorization, approval, consent or order of,
or filing with, any court or governmental body or agency is required
for the consummation by the Company of the transactions contemplated
by the Transaction Documents, except such as have been obtained and
made under the Act, the Exchange Act, the TIA, state securities or
"Blue Sky" laws or regulations or such as may be required by the NASD;
no authorization, approval, consent or order of, or filing with, any
court or governmental body or agency is required for the consummation
by the Company, Citicasters or Noble of the transactions contemplated
by the applicable Transaction Documents; the execution and deliv-
39
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ery of this Agreement, the issuance and sale of the Securities, the
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in a breach or
violation of any of (A) any of the respective charters or bylaws of
the Company or any of the Subsidiaries or (B) to the knowledge of such
counsel (after due inquiry), the terms or provisions of any agreement
or instrument which is filed as an exhibit to the Registration
Statement and to which the Company or any of the Subsidiaries is a
party or by which any of them is bound, or to which any of the
properties of the Company or any of the Subsidiaries is subject, or
(C) to the knowledge of such counsel (after due inquiry) constitute a
default under, any statute, rule or regulation to which the Company or
any Subsidiary is bound or to which any of the properties of the
Company or any Subsidiary is subject or (D) any order of any court or
governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries or any of their properties which conflict,
breach or default in each of the cases described in clauses (B), (C)
and (D) could reasonably be expected to have a Material Adverse
Effect;
(xvii) at the time it became effective and on the
Closing Date, the Registration Statement complied as to form in all
material respects with the Act;
(xviii) to the knowledge of such counsel, none of the
Company and the Subsidiaries, Citicasters or Noble have received any
notice of infringement of or conflict with asserted rights of others
with respect to the Intellectual Property which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to result in a Material Adverse
Change. The use of such Intellectual Property in connection with the
business and operations of the Company and the Subsidiaries,
Citicasters and Noble does not, to the knowl-
40
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edge of such counsel, infringe on the rights of any person;
(xix) to the best knowledge of such counsel, (A) there
are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments to which the Company and any of the
Subsidiaries, Citicasters and Noble are a party or by which any of
them may be bound that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement other than those described therein or filed
as exhibits thereto, (B) no default exists in the due performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described or filed in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, or any agreement identified on a schedule
attached to the opinion, except for defaults which could not
reasonably be expected to have a Material Adverse Effect and (C) the
statements in the Prospectus under the captions "Description of
Capital Stock" and "Securities Eligible for Future Sale" insofar as
they relate to statements of law or legal conclusions, are accurate in
all material respects; and
(xx) the Company and the Subsidiaries, Citicasters and
Noble to the extent each is a party thereto, have full power and
authority to execute, deliver and perform the Transaction Documents;
(xxi) the Transaction Documents; conform in all
material respects to the descriptions thereof contained in the
Prospectus;
(xxii) the Transaction Documents, assuming the
authorization, execution and delivery thereof by the parties other
than the Company, Merger Sub, Citicasters or Noble, constitute valid
and legally binding agreements of the respective parties thereto
enforceable
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against each of the parties, to the extent each is a party
thereto, in accordance with their respective terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights generally and to principles
of equity (regardless of whether enforcement is sought in a proceeding
at law or equity) and except to the extent that a waiver of rights
under usury laws may be unenforceable; and
(xxiii) the approval of the transactions contemplated
by the Transaction Documents by the shareholders of the Company is not
required.
(2) Such counsel shall additionally state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
your representatives and your counsel in connection with the preparation of the
Registration Statement and Prospectus and has considered the matters required to
be stated therein and the statements contained therein, although such counsel
has not independently verified the accuracy, completeness or fairness of such
statements (except as indicated above); and such counsel advises you that, on
the basis of the foregoing, no facts came to such counsel's attention that
caused such counsel to believe that the Registration Statement (as amended or
supplemented, if applicable), at the time such Registration Statement or any
post-effective amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (other than
information omitted therefrom in reliance on Rule 430A under the Act), or the
Prospectus (as amended or supplemented), as of its date and the Closing Date,
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Without limiting the
foregoing, such counsel may further state that the firm assumes no
responsibility for, and the firm has not independently verified, the accuracy,
completeness or fairness of the financial
42
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statements, notes and schedules and other financial data included in the
Registration Statement.
(3) An opinion (satisfactory to you and your counsel), dated the
Closing Date of Hogan & Hartson, counsel for the Company with respect to FCC and
related matters to the effect that:
(i) Those statements in the Prospectus under the
caption "Business -- Federal Regulation of Radio Broadcasting" that
describe provisions of the Communications Act, and regulations, rules
and policies of the FCC, are accurate descriptions in all material
respects;
(ii) the execution, delivery and performance of the
obligations as of the date hereof of the Company and each of its
Subsidiaries, Citicasters and Noble under the Transaction Documents
will not violate any law, rule, regulation or order of the FCC or the
terms of any license;
(iii) no application, filing or registration with, or
approval, authorization, consent, adjudication or order of the FCC
which has not been made or obtained is required to be made or obtained
by the Company or any Subsidiary, Citicasters and Noble in connection
with the execution, delivery and performance of the obligations as of
the date hereof of the Company and each of its Subsidiaries,
Citicasters and Noble under the Transaction Documents;
(iv) Schedule A to the opinion shall set forth a
complete list of the authorizations issued by the FCC to the Company
and its Subsidiaries (for purposes of the opinion only, the
"Licenses"). To such counsel's knowledge, the Licenses are the only
licenses, permits or authorizations required under the Communications
Act for the operation of the radio stations listed on Schedule B (for
purposes of the opinion only, the "Jacor Stations"). Except for the
pending applications noted on Schedule A thereto, the Licenses are
43
<PAGE>
in full force and effect (and the time within which any administrative or
judicial appeal, reconsideration, rehearing or other review has lapsed with
respect to the grant of the authorizations for the currently effective
terms, and no such appeal, reconsideration, rehearing, or other review has
been taken or instituted), and are duly and validly held by the relevant
Subsidiary, and are valid until the dates set forth in Schedule A thereto.
Except as indicated on Schedule C to such opinion, the Licenses are not
subject to any conditions other than those that appear on the Licenses or
are customarily imposed by the FCC on radio stations of the same class and
type. To such counsel's knowledge, each of the Jacor Stations is licensed
to operate with the maximum facilities specified by the License pertaining
thereto;
(v) except as listed in Schedule D hereto, there is no
proceeding or other administrative action pending or, to such
counsel's knowledge, threatened, before the FCC against the Company or
any Subsidiary, which, if adversely determined, would adversely affect
the business or condition of the Company or any Subsidiary. To such
counsel's knowledge, except as listed on Schedules D and E to such
opinion, the Company and the Subsidiaries are in compliance with the
Licenses and with the provisions of the Communications Act and the
rules and regulations promulgated thereunder, except as would not have
a material adverse effect on the Company. To such counsel's
knowledge, except as listed on Schedule E to such opinion, the Company
and the Subsidiaries have filed with the FCC all material reports,
forms and statements required to be filed by the Company and the
Subsidiaries with the FCC with respect to the Jacor Stations, such
filings are complete and accurate and such filings have been timely;
and
(vi) except that prior FCC approval is required for a
transfer of control, the execution, delivery and performance of the
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<PAGE>
obligations by the each of the parties under the Transaction Documents
are not and will not be contrary to the Communications Act, will not
result in any violation of the FCC's published rules and regulations
(other than the one-to-a-market rule), will not cause any forfeiture
or impairment of any FCC license of any of the Stations by or before
the FCC, and will not require any consent, approval or authorization
of the FCC (other than approval for a transfer of control over the
relevant Stations). All necessary applications, exhibits or other
filings required by the FCC for transfer of control of the Stations
now controlled by Citicasters and Noble pursuant to the Transaction
Documents (for purposes of the opinion only, the Transfer
Applications") have been filed with the FCC. To such counsel's
knowledge, there are no circumstances that would cause the FCC to
reject the Transfer Applications.
(4) An opinion (satisfactory to you and your counsel), dated the
Closing Date, of Haley Bader & Potts, counsel for Noble with respect to FCC and
related matters to the effect that:
(i) Schedule A to the opinion sets forth a complete
list of the authorizations issued by the FCC to Noble (for purposes of
the opinion only, the "Licenses"). To our knowledge, the Licenses are
the only licenses, permits or authorizations required under the
Communications Act for the operation of the radio stations listed on
Schedule B to such opinion (for purposes of the opinion only, the
"Noble Stations"). Except for the pending applications noted on
Schedule A to the opinion, the Licenses are in full force and effect
(and the time within which any administrative or judicial appeal,
reconsideration, rehearing or other review has lapsed with respect to
the grant of the authorizations for the currently effective terms, and
no such appeal, reconsideration, rehearing, or other review has been
taken or instituted), and are duly and validly held by the relevant
subsidiary, and are valid until the dates set forth in Schedule A
there-
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<PAGE>
to. Except as indicated on Schedule C to the opinion, the
Licenses are not subject to any conditions other than those that
appear on the Licenses or are customarily imposed by the FCC on radio
stations of the same class and type. To our knowledge, each of the
Noble Stations is licensed to operate with the maximum facilities
specified by the License pertaining thereto;
(ii) except as listed in Schedule D to the opinion,
there is no proceeding or other administrative action pending or, to
such counsel's knowledge, threatened, before the FCC against Noble,
which, if adversely determined, would adversely affect the business or
condition of Noble. To such counsel's knowledge, except as listed on
Schedules D and E to the opinion, Noble is in compliance with the
Licenses and with the provisions of the Communications Act and the
Rules, except as would not have a material adverse effect on Noble.
To such counsel's knowledge, except as listed on Schedule E to the
opinion, Noble has filed with the FCC all material reports, forms and
statements required to be filed by Noble with the FCC with respect to
the Noble Stations, such filings are complete and accurate and such
filings have been timely; and
(iii) except that prior FCC approval is required for a
transfer of control, the execution, delivery and performance of the
obligations by the each of the parties under the Noble Acquisition
Agreement are not and will not be contrary to the Communications Act,
will not result in any violation of the FCC's published rules and
regulations, will not cause any forfeiture or impairment of any FCC
license of any of the stations by or before the FCC, and will not
require any consent, approval or authorization of the FCC (other than
approval for a transfer of control over the relevant stations). All
necessary applications, exhibits or other filings required by the FCC
for transfer of control of the Noble stations pursuant to the Noble
Acquisition Agreement (for purposes of the opinion only, the "Transfer
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Applications") have been filed with the FCC. To such counsel's
knowledge, there are no circumstances that would cause the FCC to
reject the Transfer Applications.
(5) An opinion (satisfactory to you and your counsel), dated the
Closing Date, of ________________, counsel for Citicasters with respect to FCC
and related matters to the effect that:
(i) Schedule A to the opinion sets forth a complete
list of the authorizations issued by the FCC to Citicasters (for
purposes of the opinion only, the "Licenses"). To our knowledge, the
Licenses are the only licenses, permits or authorizations required
under the Communications Act for the operation of the radio stations
listed on Schedule B to the opinion (for purposes of the opinion only,
the "Citicasters Stations"). Except for the pending applications noted
on Schedule A thereto, the Licenses are in full force and effect (and
the time within which any administrative or judicial appeal,
reconsideration, rehearing or other review has lapsed with respect to
the grant of the authorizations for the currently effective terms, and
no such appeal, reconsideration, rehearing, or other review has been
taken or instituted), and are duly and validly held by the relevant
Subsidiary, and are valid until the dates set forth in Schedule A
thereto. Except as indicated on Schedule C to the opinion, the
Licenses are not subject to any conditions other than those that
appear on the Licenses or are customarily imposed by the FCC on radio
stations of the same class and type. To our knowledge, each of the
Citicasters Stations is licensed to operate with the maximum
facilities specified by the License pertaining thereto;
(ii) except as listed in Schedule D to the opinion,
there is no proceeding or other administrative action pending or, to
our knowledge, threatened, before the FCC against Citicasters, which,
if adversely determined, would adversely affect the business or
condi-
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<PAGE>
tion of Citicasters. To such counsel's knowledge, except as
listed on Schedules D and E to the opinion, Citicasters is in
compliance with the Licenses and with the provisions of the
Communications Act and the Rules, except as would not have a material
adverse effect on Citicasters. To such counsel's knowledge, except as
listed on Schedule E to the opinion, Citicasters has filed with the
FCC all material reports, forms and statements required to be filed by
Citicasters with the FCC with respect to the Citicasters Stations,
such filings are complete and accurate and such filings have been
timely; and
(iii) except that prior FCC approval is required for a
transfer of control, the execution, delivery and performance of the
obligations by the each of the parties under the Merger Agreement is
not and will not be contrary to the Communications Act, will not
result in any violation of the FCC's published rules and regulations,
will not cause any forfeiture or impairment of any FCC license of any
of the Stations by or before the FCC, and will not require any
consent, approval or authorization of the FCC (other than approval for
a transfer of control over the relevant stations). All necessary
applications, exhibits or other filings required by the FCC for
transfer of control of the Citicasters stations pursuant to the Merger
Agreement for purposes of the opinion only, the "Transfer
Applications") have been filed with the FCC. To such counsel's
knowledge, there are no circumstances that would cause the FCC to
reject the Transfer Applications.
(g) You shall have received an opinion, dated the Closing Date,
of Skadden, Arps, Slate, Meagher & Flom ("Skadden Arps"), counsel for the
Underwriters, in form and substance reasonably satisfactory to you.
(h) You shall have received letters on and as of the date hereof
as well as on and as of the Closing Date (in the latter case constituting
an
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<PAGE>
affirmation of the statements set forth in the former), in form and
substance satisfactory to you, from Coopers & Lybrand, Ernst & Young LLP
and Price Waterhouse LLP, independent public accountants, with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus for each of the Company,
Citicasters and Noble, respectively.
(i) Skadden Arps shall have been furnished with such documents
and opinions, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Section 5 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Company shall have furnished
to you such further information, certificates and documents as you may
reasonably request.
(k) At the Closing Date, the Securities and the Common Stock
shall have been approved for quotation on the Nasdaq SmallCap Market and
Nasdaq National Market, respectively, subject to notice of issuance.
(l) You shall have received each of the opinions required to be
delivered under any of the other Transaction Documents, together with
appropriate reliance letters addressed to the Underwriters.
(m) There shall have been no amendments, alterations,
modifications, or waivers of any provisions of the Transaction Documents
since the date of the execution and delivery thereof by the parties thereto
other than those which under the Act are not required to be disclosed in
the Prospectus or any supplement thereto and which have been disclosed to
the Underwriters prior to the date hereof.
(n) Each of the Company, Citicasters and Noble shall, to the
extent each is a party thereto, have complied in all respects with all
agreements
49
<PAGE>
and covenants in the Transaction Documents and performed all
conditions specified therein that the terms thereof require to be complied
with or performed at or prior to the Effective Time of the Merger.
(o) Prior to or concurrently with the purchase and sale of the
Securities hereunder, the Company shall have entered into the New Credit
Facility and satisfied all conditions to borrowing thereunder and you shall
received counterparts, conformed as executed, thereof. The Lenders under
the New Credit Facility shall have indicated to you that all such
conditions have been satisfied and that they are prepared to fund them term
loans in the amount of $_________ and revolving loans in the amount of
$__________ upon consummation of the Merger.
(p) Prior to or concurrently with the purchase and sale of the
Securities hereunder, the Company shall have completed the issuance and
sale of the Common Stock and the Sub Notes.
(q) Except as is disclosed to the Underwriters in writing, the
representations and warranties of the Company, Citicasters and Noble set
forth in the Transaction Documents shall be true, accurate and complete in
all respects.
SECTION 6. INDEMNIFICATION. The Company agrees to indemnify and hold
harmless (i) the Underwriter and (ii) each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) any of
the Underwriters (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "controlling person"), and (iii) the respective
officers, directors, partners, employees, representatives and agents of any of
the Underwriter or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding
50
<PAGE>
by any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Person) directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including
the information deemed to be a part of the Registration Statement or the
Prospectus (including any amendment or supplement thereto) or any preliminary
prospectus, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading, PROVIDED, HOWEVER, that (i) except insofar as such losses,
claims, damages, liabilities, judgments, actions or expenses are caused by an
untrue statement or omission or alleged untrue statement or omission that is
made in reliance upon and in conformity with information relating to the
Underwriter furnished in writing to the Company by the Underwriter expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) or any preliminary prospectus, (ii) the
foregoing indemnity agreement with respect to any untrue statement contained in
or omission from a preliminary prospectus shall not inure to the benefit of the
Underwriter from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented, if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of the Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and the untrue statement contained in or omission from
such preliminary prospectus was corrected in the Prospectus (or the Prospectus
as amended or supplemented). The Company shall notify you promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement which involves the Company or an Indemnified Person.
(b) In case any action or proceeding (including any governmental
investigation) shall be brought or asserted
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against any of the Indemnified Persons with respect to which indemnity may be
sought against the Company, the Underwriter shall promptly notify the Company in
writing (provided, that the failure to give such notice shall not relieve the
Company of its obligations pursuant to this Agreement). Such Indemnified Person
shall have the right to employ its own counsel in any such action and the fees
and expenses of such counsel shall be paid, as incurred, by the Company
(regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder). The Company shall not, in connection
with any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for such Indemnified Persons, which firm shall be
designated by the Underwriter. The Company shall be liable for any settlement of
any such action or proceeding effected with the Company's prior written consent,
which consent will not be unreasonably withheld, and the Company agrees to
indemnify and hold harmless any Indemnified Person from and against any loss,
claim, damage, liability or expense by reason of any settlement of any action
effected with the written consent of the Company. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested the Company
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, the Company agrees that
it shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 10 business
days after receipt by the Company of the aforesaid request, and (ii) the Company
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. The Company shall not, without the prior
written consent of each Indemnified Person, settle or compromise or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of
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<PAGE>
each Indemnified Person from all liability arising out of such action, claim,
litigation or proceeding.
(c) The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement, any person
controlling (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, and the officers, directors, partners, employees,
representatives and agents of each such person, to the same extent as the
foregoing indemnity from the Company to each of the Indemnified Persons, but
only with respect to claims and actions based on information relating to the
Underwriter furnished in writing by the Underwriter expressly for use in the
Prospectus.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities,
judgments, actions or expenses referred to herein, then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities, judgments, actions and expenses (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the indemnifying parties and the indemnified party,
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and of the Underwriter, on the other
hand, shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company and the
Underwriter shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact related to information
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supplied by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The indemnity and contribution obligations of the Company
set forth herein shall be in addition to any liability or obligation the Company
may otherwise have to any Indemnified Person.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by PRO
RATA allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities, judgments, actions or expenses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, the Underwriter (and its related Indemnified Persons) shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total underwriting discount applicable to the Securities purchased by
the Underwriter exceeds the amount of any damages which the Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the Indemnified Parties
although applicable in accordance with its terms, the Company and the
Underwriter shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriter, as incurred, in such proportions
that the Underwriter is responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial public offer-
54
<PAGE>
ing price appearing thereon, and the Company is responsible for the balance;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company submitted pursuant to Section 5 of this Agreement, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Underwriter or controlling person, or by or on behalf of the
Company, and shall survive delivery of the Securities to the Underwriter and any
termination of this Agreement.
SECTION 9. TERMINATION OF AGREEMENT. This Agreement shall become
effective upon the later of (i) the execution and delivery of this Agreement by
the parties hereto, (ii) the effectiveness of the Registration Statement, and
(iii) if a post-effective amendment is required to be filed pursuant to Rule
430A under the Act, the effectiveness of such post-effective amendment.
This Agreement may be terminated at any time on or prior to the
Closing Date by you by notice to the Company if any of the following has
occurred: (i) subsequent to the date the Registration Statement is declared
effective or the date of this Agreement, any Material Adverse Change occurs
which, in the judgment of any Underwriter, make it impracticable or inadvisable
to market the Securities or to enforce contracts for the sale of the Securities,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in the financial
markets of the United States or elsewhere, or any other
55
<PAGE>
substantial national or international calamity or emergency if the effect of
such outbreak, escalation, calamity, crisis or emergency would, in the judgment
of any Underwriter, make it impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, (iii) any
suspension or limitation of trading generally in securities on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market or in the
over-the-counter markets or any setting of minimum prices for trading on such
exchanges or markets, (iv) any declaration of a general banking moratorium by
Federal, New York or Ohio authorities, (v) the taking of any action by any
Federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States, and would, in your judgment, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (vi) the enactment, publication, decree, or
other promulgation of any Federal or state statute, regulation, rule or order of
any court or other governmental authority which, in your judgment, materially
and adversely affects or will materially and adversely affect the business or
operations of the Company or any Subsidiary, or (vii) any securities of the
Company or any of the Subsidiaries shall have been downgraded or placed on any
"watch list" for possible downgrading by any nationally recognized statistical
rating organization, PROVIDED, that in the case of such "watch list" placement,
termination shall be permitted only if such placement would, in the judgment of
any Underwriter, make it impracticable or inadvisable to market the Securities
or to enforce contracts for the sale of the Securities or materially impair the
investment quality of the Securities.
The indemnities and contribution provisions and the other agreements,
representations and warranties of the Company, its officers and directors and of
the Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Securities, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any of the Underwriters or by or on
behalf of the Company, the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Securities
56
<PAGE>
and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters pursuant to
clauses (i) or (vii) of the second paragraph of this Section 9 or because of the
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
you for all out-of-pocket expenses (including the fees and disbursements of
counsel) incurred by you. Notwithstanding any termination of this Agreement,
the Company shall be liable for all expenses which it has agreed to pay pursuant
to Section 4 hereof.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter at [Sears Tower Building, Suite
5500, Chicago, Illinois 60606], Attention of [Brit Bartter], Managing Director,
with a copy to Skadden, Arps, Slate, Meagher & Flom, 300 South Grand Avenue,
Suite 3400, Los Angeles, California 90071, Attention: Gregg A. Noel, Esq.;
notices to the Company shall be directed to it at 1300 PNC Center, 201 East
Fifth Street, Cincinnati, Ohio 45202, Attention: Randy Michaels, President,
with a copy to Graydon, Head & Ritchey, 1900 Fifth Third Center, 511 Walnut
Street, P.O. Box 6464, Cincinnati, Ohio 45201, Attention: Richard G. Schmalzl,
Esq.
SECTION 11. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriter and the Company
and their respective successors, heirs and legal representatives. Nothing
expressed or mentioned in this Agreement or in the Pricing Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Underwriter and the Company and their respective successors, heirs and legal
representatives, and the controlling persons and officers and directors referred
to in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all condi-
57
<PAGE>
tions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriter and the Company and their respective
successors, heirs and legal representatives and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 12. GOVERNING LAW AND TIME. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
58
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
JACOR COMMUNICATIONS, INC.
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _________________________
Name:
Title: _______________, Investment Banking Group
59
<PAGE>
Exhibit A
JACOR COMMUNICATIONS, INC.
(A DELAWARE CORPORATION)
$ PRINCIPAL AMOUNT AT MATURITY
LIQUID YIELD OPTION-TM- NOTES DUE 2011
(ZERO COUPON - SUBORDINATED)
PRICING AGREEMENT
_________, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305
Dear Sirs:
Reference is made to the Purchase Agreement, dated , 1996
(the "Purchase Agreement"), relating to the purchase by Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), of the
above Liquid Yield Option-TM- Notes (the "Securities"), of Jacor Communications,
Inc. (the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company agrees
with the Underwriter as follows:
1. The initial public offering price per $1,000 principal amount
at maturity of Securities shall be $ .
_______________
- -TM- Trademark of Merrill Lynch & Co., Inc.
60
<PAGE>
2. The initial conversion rate per $1,000 principal amount at
maturity of Securities shall be .
3. The purchase price per $1,000 principal amount at maturity of
Securities to be paid by the Underwriter shall be $ , being an
amount equal to the initial public offering price set forth above, less
$ per $1,000 principal amount at maturity of Securities, plus
accrued amortization of original issue discount, if any, from the date of
issuance, calculated on a semiannual bond equivalent basis.
61
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
JACOR COMMUNICATIONS, INC.
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ______________________________
Name:
Title: ______________________, Investment Banking Group
62
<PAGE>
Exhibit B
MATERIAL SUBSIDIARIES
Jacor Broadcasting of Florida, Inc.
Jacor Broadcasting of Atlanta, Inc.
Jacor Broadcasting of Knoxville, Inc.
Jacor Broadcasting of Colorado, Inc.
Jacor Broadcasting of Tampa Bay, Inc.
Jacor Cable, Inc.
Georgia Network Equipment, Inc.
Jacor Broadcasting Corporation
Broadcast Finance, Inc.
Chesapeake Securities, Inc.
Jacor Broadcasting of St. Louis, Inc.
JCAC, Inc.
63
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
JACOR COMMUNICATIONS, INC.
LIQUID YIELD OPTION-TM- NOTES DUE 2011
(ZERO COUPON -- SENIOR)
_______________________
INDENTURE
Dated as of _______, 1996
_______________________
The Bank of New York,
Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TM-Trademark of Merrill Lynch & Co., Inc.
<PAGE>
TABLE OF CONTENTS
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . 6
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . 6
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . 7
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Execution and Authentication. . . . . . . . . . . . . 8
SECTION 2.03. Registrar, Paying Agent and Conversion
Agent . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.04. Paying Agent To Hold Money and
Securities in Trust . . . . . . . . . . . . . . . . 9
SECTION 2.05. Securityholder Lists. . . . . . . . . . . . . . . . 10
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . 10
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . 11
SECTION 2.08. Outstanding Securities; Determinations
of Holders' Action. . . . . . . . . . . . . . . . 12
SECTION 2.09. Temporary Securities. . . . . . . . . . . . . . . . 13
SECTION 2.10. Cancellation. . . . . . . . . . . . . . . . . . . . 13
SECTION 2.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. Right to Redeem; Notices to Trustee . . . . . . . . 14
SECTION 3.02. Selection of Securities to Be Redeemed. . . . . . . 15
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . . 15
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . 16
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . 16
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . 17
SECTION 3.07. Conversion Arrangement on Call for
Redemption. . . . . . . . . . . . . . . . . . . . 17
SECTION 3.08. Purchase of Securities at the Option of
the Holder. . . . . . . . . . . . . . . . . . . . 18
SECTION 3.09. Purchase of Securities at Option of the
Holder upon Change in Control . . . . . . . . . . 25
SECTION 3.10. Effect of Purchase Notice or Change in
Control Purchase Notice . . . . . . . . . . . . . 28
SECTION 3.11. Deposit of Purchase Price or Change in
Control Purchase Price. . . . . . . . . . . . . . 30
i
<PAGE>
SECTION 3.12. Securities Purchased in Part. . . . . . . . . . . . 30
SECTION 3.13. Covenant to Comply with Securities Laws
upon Purchase of Securities . . . . . . . . . . . 31
SECTION 3.14. Repayment to the Company. . . . . . . . . . . . . . 31
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . 31
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.03. Compliance Certificate; Notice of
Defaults. . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.04. Further Instruments and Acts. . . . . . . . . . . . 33
SECTION 4.05. Maintenance of Office or Agency . . . . . . . . . . 33
SECTION 4.06. Calculation of Original Issue Discount. . . . . . . 33
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge or Transfer
Assets. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.02. Successor Company Substituted.. . . . . . . . . . . 34
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . 35
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . 37
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . 37
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . 38
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . 38
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . 38
SECTION 6.07. Rights of Holders to Receive Payment. . . . . . . . 39
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . 39
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . 39
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . 41
SECTION 6.12. Notice of Defaults. . . . . . . . . . . . . . . . . 41
SECTION 6.13. Waiver of Stay, Extension or Usury Laws . . . . . . 41
ARTICLE 7
TRUSTEE
SECTION 7.01. Rights of Trustee . . . . . . . . . . . . . . . . . 42
SECTION 7.02. Individual Rights of Trustee. . . . . . . . . . . . 43
SECTION 7.03. Trustee's Disclaimer. . . . . . . . . . . . . . . . 43
SECTION 7.04. Notice of Defaults. . . . . . . . . . . . . . . . . 44
SECTION 7.05. Reports by Trustee to Holders . . . . . . . . . . . 44
SECTION 7.06. Compensation and Indemnity. . . . . . . . . . . . . 44
SECTION 7.07. Replacement of Trustee. . . . . . . . . . . . . . . 45
SECTION 7.08. Successor Trustee by Merger . . . . . . . . . . . . 46
SECTION 7.09. Eligibility; Disqualification . . . . . . . . . . . 46
SECTION 7.10. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . 46
ii
<PAGE>
SECTION 7.11. Money Held in Trust . . . . . . . . . . . . . . . . 46
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities. . . . . . . . 47
SECTION 8.02. Repayment to the Company. . . . . . . . . . . . . . 47
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . 48
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . 48
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . 50
SECTION 9.04. Revocation and Effect of Consents,
Waivers and Actions . . . . . . . . . . . . . . . 50
SECTION 9.05. Notation on or Exchange of Securities . . . . . . . 50
SECTION 9.06. Trustee to Sign Supplemental Indentures . . . . . . 50
SECTION 9.07. Effect of Supplemental Indentures . . . . . . . . . 50
ARTICLE 10
CONVERSION
SECTION 10.01. Conversion Privilege . . . . . . . . . . . . . . . 51
SECTION 10.02. Conversion Procedure . . . . . . . . . . . . . . . 52
SECTION 10.03. Fractional Shares. . . . . . . . . . . . . . . . . 53
SECTION 10.04. Taxes on Conversion. . . . . . . . . . . . . . . . 53
SECTION 10.05. Company to Provide Stock . . . . . . . . . . . . . 54
SECTION 10.06. Adjustment for Change in Capital Stock . . . . . . 54
SECTION 10.07. Adjustment for Rights Issue. . . . . . . . . . . . 55
SECTION 10.08. Adjustment for Other Distributions . . . . . . . . 56
SECTION 10.09. When Adjustment May Be Deferred. . . . . . . . . . 59
SECTION 10.10. When No Adjustment Required. . . . . . . . . . . . 59
SECTION 10.11. Notice of Adjustment . . . . . . . . . . . . . . . 60
SECTION 10.12. Voluntary Increase . . . . . . . . . . . . . . . . 60
SECTION 10.13. Notice of Certain Transactions . . . . . . . . . . 60
SECTION 10.14. Reorganization of Company; Special
Distributions. . . . . . . . . . . . . . . . . . 61
SECTION 10.15. Company Determination Final. . . . . . . . . . . . 62
SECTION 10.16. Trustee's Adjustment Disclaimer. . . . . . . . . . 62
SECTION 10.17. Simultaneous Adjustments . . . . . . . . . . . . . 62
SECTION 10.18. Successive Adjustments . . . . . . . . . . . . . . 62
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . 63
SECTION 11.02. Notices. . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.03. Communication by Holders with Other
Holders. . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . 64
SECTION 11.05. Statements Required in Certificate or
Opinion. . . . . . . . . . . . . . . . . . . . . 64
iii
<PAGE>
SECTION 11.06. Separability Clause. . . . . . . . . . . . . . . . 65
SECTION 11.07. Rules By Trustee, Paying Agent,
Conversion Agent and Registrar . . . . . . . . . 65
SECTION 11.08. Legal Holiday. . . . . . . . . . . . . . . . . . . 65
SECTION 11.09. GOVERNING LAW. . . . . . . . . . . . . . . . . . . 65
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . 65
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.12. Multiple Originals . . . . . . . . . . . . . . . . 65
SIGNATURES
EXHIBIT A Form of Face of LYON. . . . . . . . . . . . . . . . . . . . . . . A-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
310(a)(1) ............................................ 7.09
(a)(2) ............................................ 7.09
(a)(3) ............................................ N.A.
(a)(4) ............................................ N.A.
(b) ............................................ 7.07; 7.09
(c) ............................................ N.A.
311(a) ............................................ 7.10
(b) ............................................ 7.10
(c) ............................................ N.A.
312(a) ............................................ 2.05
(b) ............................................ 11.03
(c) ............................................ 11.03
313(a) ............................................ 7.05
(b) ............................................ 7.05
(c) ............................................ 11.02
(d) ............................................ 7.05
314(a) ............................................ 4.02; 11.02
(b) ............................................ N.A.
(c)(1) ............................................ 11.04
(c)(2) ............................................ 11.04
(c)(3) ............................................ N.A.
(d) ............................................ N.A.
(e) ............................................ 11.05
(f) ............................................ N.A.
315(a) ............................................ 7.01
(b) ............................................ 7.04; 11.02
[(c) ............................................ 7.01]
[(d) ............................................ 7.01]
(e) ............................................ 6.11 316
(a)(last sentence) ................................ 2.08
(a)(1)(A) ........................................ 6.05
(a)(1)(B) ........................................ 6.04
(a)(2) ............................................ N.A.
(b) ............................................ 6.07
317(a)(1) ............................................ 6.08
(a)(2) ............................................ 6.09
(b) ............................................ 2.04
318(a) ............................................ 11.01
N.A. means Not Applicable.
_______________
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
INDENTURE, dated as of _________, 1996, between JACOR COMMUNICATIONS, INC.,
a Delaware corporation ("COMPANY"), and The Bank of New York, a New York
banking corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's Liquid Yield OptionTM
Notes due 2011 (Zero Coupon -- Senior) (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"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 the purposes of this definition,
"CONTROL", when used with respect to any specified person, means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"BOARD OF DIRECTORS" or "BOARD" means, with respect to any matter, either
the board of directors of the Company or any committee of such board duly
authorized, with respect to such matter, to exercise the powers of such board.
- -------------------
TM Trademark of Merrill Lynch & Co., Inc.
<PAGE>
"BUSINESS DAY" means each day of the year on which banking institutions in
The City of New York are not required or authorized to close.
"CAPITALIZED LEASE OBLIGATIONS" of any person means the obligations of such
person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"CAPITAL STOCK" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) capital stock issued by that corporation.
"CASH" or "CASH" means such coin or currency of The United States of
America as at any time of payment is legal tender for the payment of public and
private debts.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Company as it exists on the date of this Indenture or any other shares of
capital stock of the Company into which such common stock shall be reclassified
or changed.
"COMPANY" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by either of its Chairman or Vice Chairman of
the Board, its President, any Vice President, its Treasurer, or any Assistant
Treasurer, and by its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"CONSOLIDATED NET ASSETS" means the total amount of assets of the Company
and its Subsidiaries (less applicable depreciation, amortization and other
valuation reserves), after deducting therefrom all current liabilities of the
Company and its Subsidiaries (other than intercompany liabilities and the
current portion of long-term debt and Capitalized Lease Obligations), all as set
forth on the latest consolidated balance sheet of the Company prepared in
accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary the accounts
of which are consolidated with those of the Company as of such date for public
financial reporting purposes.
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"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"DEFAULT" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the date hereof.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"OFFICER" means either Chairman or Vice Chairman of the Board, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.04 and 11.05, (i) signed in the name of the
Company by either its Chairman of the Board, Vice Chairman of the Board,
President, any Vice President, Treasurer, any Assistant Treasurer, Controller,
or any Assistant Controller, and (ii) attested to by its Secretary or any
Assistant Secretary, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 11.04 and 11.05, if applicable, rendered by legal counsel
who may be (i) an employee of, or counsel to, the Company or (ii) other counsel
designated by the Company and reasonably acceptable to the Trustee.
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"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between the
Issue Price and the Principal Amount of the Security as set forth on the face of
the Security.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the principal amount
due at the Stated Maturity of the Security as set forth on the face of the
Security.
"PRINCIPAL PROPERTY" means (i) a parcel of improved or unimproved real
estate or other physical facility or depreciable asset of the Company or a
Subsidiary, the net book value of which on the date of determination exceeds 2%
of Consolidated Net Assets and (ii) any group of parcels of real estate, other
physical facilities, and/or depreciable assets of the Company and/or its
Subsidiaries, the net book value of which, when sold in one or a series of
related Sale and Lease-Back Transactions or securing debt issued in respect of
such Principal Properties, on the date of determination exceeds 2% of the
Consolidated Net Assets. For purposes of the foregoing, "related Sale and
Lease-back Transactions" refers to any two or more such contemporaneous
transactions which are on substantially similar terms with substantially the
same parties.
"REDEMPTION DATE" or "REDEMPTION DATE" shall mean the date specified for
redemption of any of the Securities in accordance with the terms of the
Securities and this Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set forth
in paragraph 5 of the Securities.
"SALE AND LEASE-BACK TRANSACTIONS" means any arrangement with any lessor
(other than the Company), providing for the leasing to the Company or a
Restricted Subsidiary for a period of more than three years (including renewals
at the option of the lessee) of any Principal Property that has been or is to be
sold or transferred by the Company or such Restricted Subsidiary to such lessor
or to any other person, to which funds have been or are to be advanced by such
lessor or other person on the security of the leased property.
"SALE PRICE" of a single share of Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case the
average of the average bid and the average ask prices) on such date as reported
in composite
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transactions for the principal United States securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional stock exchange, as reported by the National
Association of Securities Dealers Automated Quotation System.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means any of the Company's Liquid Yield OptionTM Notes due
2011 (Zero Coupon -- Senior), as amended or supplemented from time to time in
accordance with the terms hereof, issued under this Indenture.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means the date
specified in such Security as the fixed date on which the Principal of such
Security is due and payable.
"SUBSIDIARY" means (i) a corporation, a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is, at the
date of determination, directly or indirectly owned by the Company, by one or
more subsidiaries of the Company or by the Company and one or more subsidiaries
of the Company, (ii) a partnership in which the Company or a subsidiary of the
Company holds a majority interest in the equity capital or profits of such
partnership, or (iii) any other person (other than a corporation) in which the
Company, a subsidiary of the Company or the Company and one or more subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, and as in effect on the date of this Indenture,
except as provided in Section 9.03.
"TRADING DAY" means each day on which the securities exchange or quotation
system which is used to determine the Sale Price is open for trading or
quotation.
"TRUST OFFICER" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it
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pursuant to the applicable provisions of this Indenture and, thereafter, shall
mean such successor.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
----- ------------
"AGENT MEMBERS" ................................................ 2.01(a)
"ASSOCIATE" .................................................... 3.09(a)
"AVERAGE SALE PRICE" ........................................... 10.01
"BANKRUPTCY LAW" ............................................... 6.01
"BENEFICIAL OWNER" ............................................. 3.09(a)
"CAPITALIZED LEASE OBLIGATIONS"................................. 6.01
"CHANGE IN CONTROL" ............................................ 3.09(a)
"CHANGE IN CONTROL PURCHASE DATE" .............................. 3.09(a)
"CHANGE IN CONTROL PURCHASE NOTICE"............................. 3.09(c)
"CHANGE IN CONTROL PURCHASE PRICE" ............................. 3.09(a)
"COMPANY NOTICE" ............................................... 3.08(e)
"COMPANY NOTICE DATE" .......................................... 3.08(e)
"CONSOLIDATED NET ASSETS"....................................... 6.01
"CONVERSION AGENT" ............................................. 2.03
"CONVERSION DATE" .............................................. 10.02
"CONVERSION RATE" .............................................. 10.01
"CUSTODIAN" .................................................... 6.01
"EVENT OF DEFAULT" ............................................. 6.01
"EXCHANGE ACT" ................................................. 3.08(d)
"EX-DIVIDEND TIME" ............................................. 10.01
"EXTRAORDINARY CASH DIVIDEND" .................................. 10.08
"GAAP".......................................................... 6.01
"LEGAL HOLIDAY" ................................................ 11.08
"MARKET PRICE" ................................................. 3.08(d)
"NOTICE OF DEFAULT" ............................................ 6.01
"OPTION"........................................................ 2.02
"PAYING AGENT".................................................. 2.03
"PRINCIPAL PROPERTY"............................................ 6.01
"PURCHASE DATE" ................................................ 3.08(a)
"PURCHASE NOTICE" .............................................. 3.08(a)
"PURCHASE PRICE" ............................................... 3.08(a)
"REGISTRAR" .................................................... 2.03
"SALE AND LEASE-BACK TRANSACTIONS".............................. 6.01
"SECURITIES ACT" ............................................... 3.08(d)
"TIME OF DETERMINATION" ........................................ 10.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, such provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
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"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA or
defined by TIA reference to another statute or regulation have the meanings
assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time in The United States of America;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage (provided that any
such notation, legend or endorsement required by usage is in a form acceptable
to the Company and the Trustee). Each Security shall be dated the date of its
authentication.
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The Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated ______, 1996, between the Company and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Purchase
Agreement").
SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed by the Company by either of its Chairman or Vice Chairman of the Board,
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the Issue Date of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Principal Amount of up to $225,000,000 upon a Company Order without
any further action by the Company; PROVIDED, HOWEVER, that in the event that the
Company sells any Securities pursuant to the option (the "OPTION") granted
pursuant to Section 2 of the Purchase Agreement, dated ______, 1996, between the
Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, then the Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount of up to $225,000,000 plus up to
$33,750,000 aggregate Principal Amount of Securities sold pursuant to the Option
upon a Company Order. The aggregate Principal Amount of Securities outstanding
at any time may not exceed the amount set forth in the foregoing sentence,
subject to the proviso set forth therein, except as provided in Section 2.07.
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 Principal Amount and only integral multiples
thereof.
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SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for purchase or payment ("PAYING AGENT") and
an office or agency where Securities may be presented for conversion
("CONVERSION AGENT"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent. The term
Conversion Agent includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar other than the
Trustee. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee and the Holders of
the name and address of any such agent and of any change in the office or agency
referred to in Section 4.05. If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.06. The
Company or any Subsidiary or an Affiliate of either of them may act as Paying
Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. In
accordance with Section 4.05 and except as otherwise provided herein, prior to
or on each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent a sum of money or, if permitted by the terms
hereof, securities sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money and securities held by the Paying Agent
for the making of payments in respect of the Securities and shall notify the
Trustee of any default by the Company in making any such payment. At any time
during the continuance of any default by the Company in making any payments in
respect of the Securities, the Paying Agent shall, upon the written request of
the Trustee, forthwith pay to the Trustee all money and securities so held in
trust. If the Company, a Subsidiary or an Affiliate of either of them acts as
Paying Agent, it shall segregate the money and securities held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money
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and securities held by it to the Trustee and to account for any money and
securities disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for the money and securities.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish or cause to be furnished to the Trustee (i)
at least semiannually on June 1 and December 1 a list of the names and addresses
of Securityholders dated within 15 days of the date on which the list is
furnished and (ii) at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require, of
the names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. (a) Upon surrender for registration
of transfer of any Security, together with a written instrument of transfer
satisfactory to the Trustee duly executed by the Securityholder or such
Securityholder's attorney duly authorized in writing, at the office or agency of
the Company designated as Registrar or co-registrar pursuant to Section 2.03 or
at the office or agency referred to in Section 4.05, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denomination or denominations, of a like aggregate Principal Amount. The
Company shall not charge a service charge for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership).
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Securities
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selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed), (b) any Securities in respect of
which a Purchase Notice or a Change in Control Purchase Notice has been given
and not withdrawn by the Holder thereof in accordance with the terms of this
Indenture (except, in the case of Securities to be purchased in part, the
portion thereof not to be purchased) or (c) any Securities for a period of 15
days before a selection of Securities to be redeemed.
(b) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(c) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(d) No Registrar shall be required to make registrations of transfer
or exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security is
surrendered to the Company or the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a BONA FIDE purchaser, the Company shall execute, and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company may
require the payment of a sum sufficient to cover
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any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) in
connection therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, mutilated, destroyed, lost or stolen Securities for which the
Trustee has authenticated and delivered a new Security in lieu therefor pursuant
to Section 2.07, those paid pursuant to Section 2.07 and those described in this
Section 2.08 as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; PROVIDED,
HOWEVER, that in determining whether the Holders of the requisite Principal
Amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on
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Stated Maturity, money or, if permitted by the terms hereof including, without
limitation, Section 3.08, securities sufficient to pay the Securities payable on
that date, then on and after that date such Securities shall cease to be
outstanding and Original Issue Discount and interest, if any, on such Securities
shall cease to accrue and all other rights of the Holder shall terminate (other
than the right to receive the applicable Redemption Price, Purchase Price or
Change in Control Purchase Price, as the case may be, upon delivery of the
Security in accordance with the terms of this Indenture); PROVIDED, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made.
If a Security is converted in accordance with Article 10, then from and
after the Conversion Date such Security shall cease to be outstanding and
Original Issue Discount and interest, if any, shall cease to accrue on such
Security.
SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the Officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03 or
4.05, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 2.10. CANCELLATION. All Securities surrendered for payment,
redemption or purchase by the Company pursuant to Article 3, conversion pursuant
to Article 10, registration of transfer or exchange shall, if surrendered to any
person other than the Trustee, be delivered to the Trustee and shall be
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promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. The Company may not
issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
10. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of by the Trustee in accordance with its standard procedures and
evidence of such disposition shall be delivered to the Company unless the
Company directs by Company Order that the Trustee deliver cancelled Securities
to the Company.
SECTION 2.11. CUSIP NUMBERS. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
PROVIDED that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at its
option, may redeem the Securities for cash in accordance with the provisions set
forth in paragraphs 5 and 7 of the Securities. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the Redemption Date, the Principal Amount of Securities to
be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 at least 45 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee). If fewer
than all the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
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record date shall not be less than ten days after the date of notice to the
Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed PRO RATA or by lot or by any other method the Trustee considers fair
and appropriate (so long as such method is not prohibited by the rules of any
stock exchange on which the Securities are then listed). The Trustee shall make
the selection at least 30 but not more than 60 days before the Redemption Date
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the Principal Amount of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in Principal Amounts of $1,000 or an integral multiple
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
If any Security selected for partial redemption is thereafter surrendered
for conversion in part before termination of the conversion right with respect
to the portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be), solely for purposes of determining
the aggregate Principal Amount of Securities to be redeemed by the Company, to
be the portion selected for redemption. Securities that have been converted
during a selection of Securities to be redeemed may be treated by the Trustee as
outstanding for the purpose of such selection. Nothing in this Section 3.02
shall affect the right of any Holder to convert any Security pursuant to Article
10 before the termination of the conversion right with respect thereto.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a Redemption Date, the Trustee, in the name and at the expense of
the Company, shall cause notice of redemption to be mailed, first-class postage
prepaid, to each Holder of Securities to be redeemed at his address as it
appears on the list of Securityholders maintained pursuant to Section 2.05. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in an Authorized Newspaper
in each place of payment.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date (upon which the Redemption Price shall be
paid);
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(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent and
of the office or agency referred to in Section 4.05;
(5) that Securities called for redemption may be converted at any
time before the close of business on the Redemption Date;
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent or at the office or agency referred to in Section 4.05 to
collect the Redemption Price;
(8) the CUSIP number of the Securities;
(9) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and Principal Amounts of the particular Securities
to be redeemed; and
(10) that, unless the Company defaults in payment of the Redemption
Price, Original Issue Discount on Securities called for redemption and
interest, if any, will cease to accrue on and after the Redemption Date.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to such notice of
redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date stated in the notice and at the Redemption Price therefor except
for Securities that are converted in accordance with the terms of this
Indenture. Upon the later of the Redemption Date and the date such Securities
are surrendered to the Paying Agent or at the office or agency referred to in
Section 4.05, such Securities called for redemption shall be paid at the
Redemption Price therefor.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in
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trust) money sufficient to pay the Redemption Price of all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which prior thereto have been delivered by the Company to the Trustee
for cancellation. The Paying Agent shall as promptly as practicable return to
the Company any money, with interest, if any, thereon (subject to the provisions
of Section 7.01(f)), not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company or
a Subsidiary or an Affiliate of the Company in trust and is not required for
such purpose it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder, a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Securities, the Company may arrange, in lieu
of redemption, for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment bankers or other
purchasers to purchase all or a portion of such Securities by paying to the
Trustee in trust for the Securityholders whose Securities are to be so
purchased, on or before the close of business on the Redemption Date, an amount
that, together with any amounts deposited with the Trustee by the Company for
redemption of such Securities, is not less than the Redemption Price, together
with interest, if any, accrued to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no such
agreement shall relieve the Company of its obligation to pay such Redemption
Price and interest, if any. If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 10) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date, subject to payment of the above amount as aforesaid. The
Trustee shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the Company for the redemption of
Securities. Without
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the Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Securities shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Company and such purchasers, including
the costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.08. PURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER. (a)
GENERAL. Securities shall be purchased by the Company pursuant to paragraph 6
of the Securities as of ______, 2001 and ______, 2006 (each, a "PURCHASE DATE"),
at the purchase price specified therein (each, a "PURCHASE PRICE"), at the
option of the Holder thereof, upon:
(1) delivery to the Paying Agent or to the office or agency referred
to in Section 4.05 by the Holder of a written notice of purchase (a
"PURCHASE NOTICE") at any time from the opening of business on the date
that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Security that the Holder will
deliver to be purchased;
(B) the portion of the Principal Amount of the Security which
the Holder will deliver to be purchased, which portion must be $1,000
or an integral multiple thereof;
(C) that such Security shall be purchased on the Purchase Date
pursuant to the terms and conditions specified in this Indenture and
in paragraph 6 of the Securities; and
(D) if the Company elects pursuant to Section 3.08(b) to pay the
Purchase Price on such Purchase Date, in whole or in part, in shares
of Common Stock, but such portion of the Purchase Price to be paid in
Common Stock is ultimately to be paid in cash because any condition in
Section 3.08(d) is not satisfied, such Holder elects (i) to withdraw
such Purchase Notice as to some or all of the Securities to which it
relates (stating the Principal Amount and certificate numbers
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of the Securities as to which such withdrawal shall relate), or (ii)
to receive cash in respect of the Purchase Price for all Securities
subject to such Purchase Notice; and
(2) delivery of such Security prior to, on or after the Purchase Date
(together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent or to the office or agency referred to in
Section 4.05, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor; PROVIDED, HOWEVER, that such Purchase Price
shall be so paid pursuant to this Section 3.08 only if the Security so
delivered conforms in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.08(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions hereof
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or the office or agency referred to in Section 4.05 the
Purchase Notice contemplated by this Section 3.08(a) shall have the right to
withdraw at any time prior to the close of business on the Purchase Date such
Purchase Notice by delivery of a written notice of withdrawal to the Paying
Agent or such office or agency in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
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(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE. The
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, in cash or Common Stock, or in any combination of cash
and Common Stock, subject to the conditions set forth in this Section 3.08. The
Company shall designate, in the notice from the Company delivered pursuant to
Section 3.08(e), whether the Company will purchase the Securities for cash or
Common Stock, and, if a combination thereof, the percentages of the Purchase
Price of Securities in respect of which it will pay in cash or Common Stock;
PROVIDED that the Company will pay cash for fractional interests in Common
Stock. For purposes of determining the existence of potential fractional
interests, all Securities subject to purchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Securities are purchased pursuant to this Section
3.08 shall receive the same percentage of cash or Common Stock in payment of the
Purchase Price for such Securities, except (i) as provided in Section 3.08(d)
with regard to the payment of cash in lieu of fractional shares of Common Stock
and (ii) in the event that the Company is unable to purchase the Securities of a
Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable state securities laws cannot
be obtained, the Company may purchase the Securities of such Holder or Holders
for cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given notice thereof to Securityholders except pursuant to
this Section 3.08(b) or Section 3.08(d).
At least five Business Days before the Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 3.08(e);
(iii) that the conditions to such manner of payment set forth in
Section 3.08(d) have or will be complied with; and
(iv) whether the Company desires the Trustee to give the notice
required by Section 3.08(e).
(c) PURCHASE WITH CASH. On each Purchase Date, at the option of the
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price of such Securities.
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(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of the
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company by the issuance of a number of shares
of Common Stock equal to the quotient obtained by dividing (i) the amount of
cash to which the Securityholders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Securities in cash by (ii) the Market Price (as defined
below) of a share of Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Security
purchased, the number of shares of Common Stock shall be based on the aggregate
amount of Securities to be purchased.
The Company's right to exercise its election to purchase the Securities
pursuant to this Section through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given notice of an election to pay
entirely in cash and its giving of timely notice of election to purchase
all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act of
1933, as amended (the "SECURITIES ACT") and the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), in each case if required for the
initial issuance thereof;
(iii) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of
Common Stock to be issued by the Company in payment of the Purchase Price
in respect of Securities have been duly authorized
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and, when issued and delivered pursuant to the terms of this Indenture in
payment of the Purchase Price in respect of the Securities, will be validly
issued, fully paid and nonassessable and shall be free of any preemptive
rights and any lien or adverse claim (provided that such Opinion of Counsel
may state that, insofar as it relates to the absence of such preemptive
rights, liens and adverse claims, it is given upon the best knowledge of
such counsel), and, in the case of such Officers' Certificate, that
conditions (i), (ii) and (iii) above have been satisfied and, in the case
of such Opinion of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount of Securities and the Sale
Price of a share of Common Stock on each of the seven Business Days prior to the
Purchase Date. The Company may elect to pay in Common Stock only if the
information necessary to calculate the Market Price is reported in THE WALL
STREET JOURNAL or another daily newspaper of national circulation. If such
conditions are not satisfied prior to or on the Purchase Date and the Company
elected to purchase the Securities pursuant to this Section 3.08 through the
issuance of shares of Common Stock, the Company shall pay the Purchase Price in
cash.
The "MARKET PRICE" means the average of the Sale Price of the Common Stock
for the five Trading Day period ending on the third Trading Day prior to the
related Purchase Date, appropriately adjusted to take into account the actual
occurrence, during the seven Trading Days preceding such Purchase Date, of any
event described in Section 10.06, 10.07 or 10.08; SUBJECT, HOWEVER, to the
conditions set forth in Sections 10.09 and 10.10.
(e) NOTICE OF ELECTION. The Company shall send notices of its election
(the "COMPANY NOTICE") to purchase with cash or Common Stock or any combination
thereof to the Holders (and to beneficial owners as required by applicable law)
in the manner provided in Section 3.03. The Company Notice shall be sent to
Holders (and to beneficial owners as required by applicable law) on a date not
less than 20 Business Days prior to the Purchase Date (such date not less than
20 Business Days prior to the Purchase Date being herein referred to as the
"COMPANY NOTICE DATE"). Such notices shall state the manner of payment elected
and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or any
specified percentage thereof) with Common Stock, the notice shall:
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(1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date equal to
such specified percentage of the Purchase Price of the Securities held by
such Holder (except for any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market risk
with respect to the value of the Common Stock to be received from the date
such Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to be
completed by the Securityholder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion Agent
and of the office or agency referred to in Section 4.05;
(iii) that Securities as to which a Purchase Notice has been given may
be converted into Common Stock at any time prior to the close of business
on the applicable Purchase Date only if the applicable Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent or to the
office or agency referred to in Section 4.05 to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following the
later of the Purchase Date and the time of surrender of such Security as
described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities and that Holders
who want to convert Securities must satisfy the requirements set forth in
paragraph 8 of the Securities; and
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(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 3.08(a)(1)(D) or Section 3.10).
At the Company's written request, the Trustee shall give such notice in the
Company's name and at the Company's expense;
PROVIDED, HOWEVER, that, in all cases, the text of such notice shall be prepared
by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount of Securities, the Company will publish
such determination in THE WALL STREET JOURNAL or another daily newspaper of
national circulation and furnish the Trustee with an affidavit of publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered upon
purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted any
shares of Common Stock to be issued to purchase Securities on the principal
national securities exchange or over-the-counter or other domestic market on
which any other shares of the Common Stock are then listed or quoted. The
Company will promptly inform the Trustee in writing of any such listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in respect
of a cash purchase under Section 3.08(c) or for fractional interests, as
applicable) or shares of Common Stock, or any combination thereof, as
applicable, at the time and in the manner as provided in Section 3.11,
sufficient to pay the aggregate Purchase Price of all Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the later of the
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 4.05, the Company shall
deliver to each Holder entitled to receive Common Stock through the Paying Agent
a certificate for the number of full shares of Common Stock issuable in payment
of the Purchase Price and cash in lieu of any fractional interests. The person
in whose name the certificate for Common Stock is registered shall be treated as
a holder of record of such Common Stock on the Business Day following the
related Purchase Date. Subject to Section 3.08(d), no payment or adjustment
will be made for dividends on the Common Stock the record date for which
occurred prior to the Purchase Date.
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(h) TAXES. If a Holder of a Security is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
SECTION 3.09. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON CHANGE
IN CONTROL. (a) If on or prior to ______, 2001 there shall have occurred a
Change in Control, Securities shall be purchased, at the option of the Holder
thereof, by the Company at the purchase price specified in paragraph 6 of the
Securities (the "CHANGE IN CONTROL PURCHASE PRICE"), on the date that is 35
Business Days after the occurrence of the Change of Control (the "CHANGE IN
CONTROL PURCHASE DATE"), subject to satisfaction by or on behalf of the Holder
of the requirements set forth in Section 3.09(c).
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time after
the original issuance of the Securities as either of the following events shall
occur:
(i) There shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation
or pursuant to which the Common Stock would be converted into cash,
securities or other property, other than a consolidation or merger of the
Company in which the holders of Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority
of the Common Stock of the continuing or surviving corporation immediately
after such consolidation or merger; or
(ii) There is a report filed by any person, including its Affiliates
and Associates, on Schedule 13D or 14D-1 (or any successor schedule, form
or report) pursuant to the Exchange Act, disclosing that such person (for
the purposes of this Section 3.09 only, the term "person" shall include a
"person" within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing) has
become the beneficial owner (as the term "BENEFICIAL OWNER" is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the
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Exchange Act) of 50% or more of the voting power of the Company's Common
Stock then outstanding; PROVIDED, HOWEVER, that a person shall not be
deemed beneficial owner of, or to own beneficially, (A) any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder, or
(B) any securities if such beneficial ownership (1) arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act, and (2) is not also then reportable
on Schedule 13D (or any successor schedule, form or report) under the
Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred if at any time the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan files or becomes
obligated to file a report under or in response to Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report) under the Exchange Act
disclosing beneficial ownership by it of shares of Common Stock, whether in
excess of 50% or otherwise.
"ASSOCIATE" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the occurrence of a Change in Control,
(i) the Company shall mail a written notice of such Change in Control by
first-class mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law) and (ii) the Company shall cause a copy of such
notice to be published in THE WALL STREET JOURNAL or another daily newspaper of
national circulation. The notice shall include a form of Change in Control
Purchase Notice to be completed by the Securityholder and shall state:
(1) the events causing a Change in Control and the date such Change
in Control is deemed to have occurred for purposes of this Section 3.09;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
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(5) the name and address of the Paying Agent and the Conversion Agent
and the office or agency referred to in Section 4.05;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock (or, in lieu thereof,
cash, if the Company shall so elect) at any time prior to the close of
business on the Change of Control Purchase Date only if the Change in
Control Purchase Notice has been withdrawn by the Holder in accordance with
the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent or the
office or agency referred to in Section 4.05 to collect payment;
(9) that the Change in Control Purchase Price for any Security as to
which a Purchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Change in Control Purchase Date and the
time of surrender of such Security as described in (8);
(10) the procedures the Holder must follow to exercise rights under
this Section 3.09 and a brief description of those rights;
(11) briefly, the conversion rights of the Securities; and
(12) the procedures for withdrawing a Change in Control Purchase
Notice.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "CHANGE IN CONTROL PURCHASE NOTICE")
to the Paying Agent or to the office or agency referred to in Section 4.05 at
any time prior to the close of business on the Change in Control Purchase Date,
stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
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(3) that such Security shall be purchased on the Change in Control
Purchase Date pursuant to the terms and conditions specified in paragraph 6
of the Securities.
Receipt of the Security by the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements), at
the offices of the Paying Agent or to the office or agency referred to in
Section 4.05 shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor; PROVIDED, HOWEVER, that such Change in Control
Purchase Price shall be so paid pursuant to this Section 3.09 only if the
Security so delivered to the Paying Agent or such office or agency shall conform
in all respects to the description thereof set forth in the related Change in
Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.09 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 4.05.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or to the office or agency referred to in Section 4.05 the
Change in Control Purchase Notice contemplated by this Section 3.09(c) shall
have the right to withdraw such Change in Control Purchase Notice at any time
prior to or on the Change in Control Purchase Date by delivery of a written
notice of withdrawal to the Paying Agent or to such office or agency in
accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 3.10. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL PURCHASE
NOTICE. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08(a) or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice
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is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Security. Such Purchase Price
or Change in Control Purchase Price shall be paid to such Holder promptly
following the later of (x) the Business Day following the Purchase Date or the
Change in Control Purchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 3.08(a) or Section 3.09(c), as
applicable, have been satisfied) and (y) the time of delivery of such Security
to the Paying Agent or to the office or agency referred to in Section 4.05 by
the Holder thereof in the manner required by Section 3.08(a) and (g) or Section
3.09(c), as applicable. Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice, as the case may be, has been given by the
Holder thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Purchase Notice or Change in Control Purchase
Notice, as the case may be, unless such Purchase Notice or Change in Control
Purchase Notice, as the case may be, has first been validly withdrawn as
specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent or to the office or agency referred to in Section
4.05 at any time on or prior to the Purchase Date or the Change in Control
Purchase Date, as the case may be, specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the Principal Amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(3) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.08(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
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There shall be no purchase of any Securities pursuant to Sections 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares of Common Stock) or 3.09 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Purchase Notice or Change in
Control Purchase Notice, as the case may be) and is continuing an Event of
Default (other than a default in the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such Securities).
The Paying Agent will promptly return to the respective Holders thereof any
Securities (x) with respect to which a Purchase Notice or Change in Control
Purchase Notice, as the case may be, has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, with respect to such Securities) in which
case, upon such return, the Purchase Notice or Change in Control Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL PURCHASE
PRICE. Prior to 3:00 p.m. (local time in The City of New York) on the Business
Day following the Purchase Date or the Change in Control Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as Paying Agent, shall segregate and hold in trust as provided in Section 2.04)
an amount of cash in immediately available funds or securities, if expressly
permitted hereunder, sufficient to pay the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of all the Securities or portions
thereof which are to be purchased as of the Purchase Date or Change in Control
Purchase Date, as the case may be.
SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security which is to be
purchased only in part shall be surrendered at the office of the Paying Agent or
the office or agency referred to in Section 4.05 (with, if the Company or the
Trustee so requires, due endorsement, or a written instrument of transfer in
form satisfactory to the Company and the Trustee executed by the Holder or such
Holder's attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to,
and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.
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SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. In connection with any offer to purchase or purchase of Securities
under Section 3.08 or 3.09 hereof, the Company shall (i) comply with Rule 13e-4
and Rule 14e-1 under the Exchange Act, if applicable, (ii) file the related
Schedule 13E-4 (or any successor schedule, form or report) under the Exchange
Act, if applicable, and (iii) otherwise comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
purchase of the Securities (including positions of the SEC under applicable
no-action letters) so as to permit the rights and obligations under Sections
3.08 and 3.09 to be exercised in the time and in the manner specified in
Sections 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company, upon written request, any cash or shares of Common
Stock, together with interest on such cash, if any, or dividends on such shares
of Common Stock, if any, (subject to the provisions of Section 7.01(f)) held by
them for the payment of a Purchase Price or Change in Control Purchase Price, as
the case may be, of the Securities that remain unclaimed as provided in
paragraph 12 of the Securities; PROVIDED, HOWEVER, that to the extent that the
aggregate amount of cash or shares of Common Stock deposited by the Company
pursuant to Section 3.11 exceeds the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of the Securities or portions
thereof to be purchased, then promptly after the Business Day following the
Purchase Date or Change in Control Purchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)).
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price and interest, if any, shall be considered paid on the
applicable date due if on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, cash or securities, if expressly permitted
hereunder, sufficient to pay all such amounts then due.
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The Company shall, to the extent permitted by law, pay interest on overdue
amounts at the per annum rate of interest set forth in paragraph 1 of the
Securities, compounded semi-annually, which interest on overdue amounts (to the
extent payment of such interest shall be legally enforceable) shall accrue from
the date such overdue amounts were originally due and payable.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (or any such successor provisions
thereto). In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act (or any such
successor provisions), it shall continue to provide the Trustee with reports
containing substantially the same information as would have been required to be
filed with the SEC had the Company continued to have been subject to such
reporting requirements, and the Trustee shall make any such reports available to
Securityholders upon request. In such event, such reports shall be provided at
the times the Company would have been required to provide reports had it
continued to have been subject to such reporting requirements. The Company also
shall comply with the other provisions of TIA Section 314(a), to the extent such
provisions are applicable.
SECTION 4.03. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULTS. (a) The
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending on December
31, 1996) a certificate of the principal executive officer, the principal
financial officer, the treasurer, any assistant treasurer or the controller or
any assistant controller or principal accounting officer of the Company stating
whether or not, to the knowledge of the signer, the Company has complied with
all conditions and covenants on its part contained in this Indenture and, if the
signer has obtained knowledge of any default by the Company in the performance,
observance or fulfillment of any such condition or covenant, specifying each
such default and the nature thereof. For the purpose of this Section 4.03,
compliance shall be determined without regard to any grace period or requirement
of notice provided pursuant to the terms of this Indenture.
(b) The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five
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Business Days of its becoming aware of such Default or Event of Default.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of New York, in such location as may be
required by the rules of any securities exchange or quotation system on which
the Securities may from time to time be listed, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office of the Trustee in
The City of New York, at which at any particular time its corporate trust
business shall be principally administered, which office on the date hereof is
located at 101 Barclay Street, Floor 21 West, New York, New York 10286, shall be
such office or agency for all of the aforesaid purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change of location, of
such other office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes.
SECTION 4.06. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall file with the Trustee promptly following the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on outstanding Securities as
of the end of such year.
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ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. So long as any
Securities shall be outstanding, the Company shall not consolidate with or merge
into any other corporation or other person or convey, transfer or lease its
properties and assets substantially as an entirety to any person (such successor
corporation or person, as the case may be, shall in this Article 5 be referred
to as the "Successor Company"), unless
(1) either (x) the Company shall be the continuing corporation or (y)
the Successor Company (if other than the Company) shall be organized and
existing under the laws of the United States of America or any State or the
District of Columbia, and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and premium, if any, and interest, if any, on all the Securities and the
performance of every covenant of this Indenture and in the Securities on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 5.02. SUCCESSOR COMPANY SUBSTITUTED. Upon any consolidation with
or merger into any other corporation or other person, or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 5.01, the Successor Company or person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Successor Company or person had been named as
the Company herein, and thereafter, except in the case of a lease and
obligations the Company may have under a supplemental indenture pursuant to
Section 10.14, the predecessor corporation shall be relieved of all obligations
and covenants under this
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Indenture and the Securities. Subject to Section 9.06, the Company, the Trustee
and the successor person shall enter into a supplemental indenture to evidence
the succession and substitution of such successor person and such discharge and
release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price or Change in Control Purchase Price on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise, whether or
not such payment shall be prohibited by this Indenture;
(2) the Company fails to comply with any of its agreements in the
Securities or this Indenture and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(3) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding or the commencement of any case
against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment
of or taking possession by a Custodian;
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(4) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days;
(5) the Company fails to deliver shares of Common Stock or pay cash
in lieu of fractional shares in accordance with the terms hereof when such
Common Stock or cash in lieu of fractional shares is required to be
delivered, upon conversion of a Security and such failure is not remedied
for a period of 10 days; or
(6) (a) default shall occur (i) in the payment of any principal on
any debt for borrowed money of the Company (excluding any non-recourse
debt), in an aggregate principal amount in excess of $10 million, when due
at its final maturity after giving effect to any applicable grace period
and the holder thereof shall have taken affirmative action to enforce the
payment thereof, or (ii) in the performance of any term or provision of any
debt for borrowed money of the Company (excluding any non-recourse debt) in
an aggregate principal amount in excess of $10.0 million that results in
such debt becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable, unless, in the case of
either clause (i) or (ii) above, (x) such acceleration or action to enforce
payment, as the case may be, has been rescinded or annulled, (y) such debt
has been discharged or (z) a sum sufficient to discharge in full such debt
has been deposited in trust by or on behalf of the Company, in each case,
within a period of 10 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Securities, a written notice specifying such default or defaults and
stating that such notice is a "Notice of Default" hereunder.
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A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (2) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice and the lapse of time or both would become an Event of Default
under clause (2) or clause (6), its status and what action the Company is taking
or proposes to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event
of Default specified in Section 6.01(3) or (4)) occurs and is continuing, unless
the Principal Amount of all the Securities shall have already become due and
payable, either the Trustee by notice to the Company, or the Holders of at least
25% in aggregate Principal Amount of the Securities at the time outstanding by
notice to the Company and the Trustee, may declare the Issue Price and accrued
Original Issue Discount through the date of declaration on all the Securities to
be immediately due and payable, whereupon such Issue Price and accrued Original
Issue Discount shall be due and payable immediately; provided that, if an Event
of Default specified in Section 6.01(3) or (4) occurs and is continuing, the
Issue Price and accrued Original Issue Discount on all the Securities through
the date of the occurrence of such Event of Default shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
that have become due solely as a result of acceleration and if all amounts due
to the Trustee under Section 7.06 have been paid. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
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The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (a) an Event of Default described
in Section 6.01(1), (b) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected or
(c) a Default under Article 10. When a Default is waived, it is deemed cured
and shall cease to exist, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability unless the Trustee shall have been provided with reasonable security
or indemnity against such liability satisfactory to the Trustee.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense satisfactory to the
Trustee;
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(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity;
and
(5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any Redemption Date, and to convert the
Securities in accordance with Article 10 or to bring suit for the enforcement of
any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of each such
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
described in Section 6.01(1) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.06.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amount)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue
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Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.06;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price or
interest, if any, as the case may be, ratably, without preference or priority of
any kind, according to such amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to
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each Securityholder and the Trustee a notice that states the record date, the
payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit initiated by the Trustee, a suit by a Holder pursuant
to Section 6.07 or a suit by Holders of more than 10% in aggregate Principal
Amount of the Securities at the time outstanding.
SECTION 6.12. NOTICE OF DEFAULTS. The Trustee shall, within 90 days after
the occurrence of any Default, mail to all Holders of Securities, as the names
and addresses of such Holders appear on the books of registry of the Company,
notice of all Defaults of which the Trustee shall be aware, unless such Defaults
shall have been cured or waived before the giving of such notice; PROVIDED that,
except in the case of a Default described in Section 6.01(1), the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or Trust
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities.
SECTION 6.13. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent it may lawfully do so) that it shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law, wherever
enacted, now or at any time hereafter in force, that would prohibit or forgive
the Company from paying all or any portion of the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price or Change in
Control Purchase Price in respect of the Securities, or any interest on any such
amounts, as contemplated herein, or that may affect the covenants or the
performance of this Indenture or the Securities; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
SECTION 7.01. RIGHTS OF TRUSTEE. (a) Before the Trustee acts or refrains
from acting, it may require an Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(b) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(e) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder.
(f) The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(g) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(h) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it shall
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be proved that the Trustee was negligent in ascertaining the pertinent facts.
(i) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the outstanding Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities.
(j) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee reasonably believes
that a default may exist, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.
SECTION 7.02. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.09 and 7.10.
SECTION 7.03. TRUSTEE'S DISCLAIMER. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, it
shall not be responsible for any statement in the registration statement for the
Securities under the Securities Act or in the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
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SECTION 7.04. NOTICE OF DEFAULTS. The Trustee shall, within 90 days after
the occurrence of any Default, mail to all Holders of Securities, as the names
and addresses of such Holders appear on the books of registry of the Company,
notice of all Defaults of which the Trustee shall be aware, unless such Defaults
shall have been cured or waived before the giving of such notice. Except in the
case of a Default described in Section 6.01(1), the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors or Trust Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities.
SECTION 7.05. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
_________ beginning with the ________ following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such
_________ that complies with TIA Section 313(a), if required by said Section.
The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be provided to the Company and shall be filed with the SEC and each stock
exchange on which the Securities are listed. The Company agrees promptly to
notify the Trustee whenever the Securities become listed on any stock exchange
and of any delisting thereof.
SECTION 7.06. COMPENSATION AND INDEMNITY. The Company agrees: (a) to
pay to the Trustee from time to time such compensation (in accordance with a fee
schedule agreed upon from time to time) for all services rendered by it
hereunder (which compensation shall not (to the extent permitted by law) be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) to reimburse the Trustee (in accordance with a fee schedule agreed
upon from time to time) upon its request and, if required by the Company,
submission of reasonable documentation for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify each of the Trustee or any predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based upon, measured or determined by
the income of the
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Trustee), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
The Trustee shall give the Company notice of any claim or liability for
which the Trustee might be entitled to indemnification under subparagraph (c) of
this Section 7.06, within a reasonable amount of time after a Trust Officer of
the Trustee actually becomes aware of such claim or liability. To secure the
Company's payment obligations in this Section 7.06, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee.
The Company's payment obligations pursuant to this Section 7.06 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(4) or (5), the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
The provisions of this Section shall survive the termination of this Indenture.
SECTION 7.07. REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; PROVIDED, HOWEVER, no such resignation shall be effective
until a successor Trustee has accepted its appointment pursuant to this Section
7.07. The Holders of a majority in aggregate Principal Amount of the Securities
at the time outstanding may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee (subject to the consent of the Company, such
consent not to be unreasonably withheld). The Company shall remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.09;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company.
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Thereupon the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Securityholders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.09, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.08. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.09. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. In
determining whether the Trustee has conflicting interests as defined in TIA
Section 310(b)(1), the provisions contained in the proviso to TIA Section
310(b)(1) shall be deemed incorporated herein.
SECTION 7.10. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
SECTION 7.11. MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
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ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash or, if expressly permitted by the terms hereof, securities sufficient to
pay at Stated Maturity the Principal Amount of all outstanding Securities (other
than Securities replaced pursuant to Section 2.07), and if in either case the
Company pays all other sums payable hereunder by the Company (including, without
limitation, sums payable by delivery of shares of Common Stock pursuant to
Section 3.08), then this Indenture shall, subject to Section 7.06, cease to be
of further effect. The Trustee shall join in the execution of a document
prepared by the Company acknowledging satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Securities that remains
unclaimed for two years; PROVIDED, HOWEVER, that the Trustee or such Paying
Agent, before being required to make any such return, may, at the expense of the
Company, cause to be published once in THE WALL STREET JOURNAL or another daily
newspaper of national circulation or mail to each such Holder notice that such
money or securities remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such mailing, any
unclaimed money or securities then remaining will be returned to the Company.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person, and the Trustee and the Paying
Agent shall have no further liability with respect to such money or securities
for that period commencing after the return thereof.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
PROVIDED, HOWEVER, that such amendment does not materially adversely affect
the rights of any Securityholder;
(2) to comply with Article 5 or Section 10.14;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986,
as amended;
(4) to make any change that does not adversely affect the rights of
any Securityholder;
(5) to add to the covenants or obligations of the Company hereunder,
for the benefit of the Securityholders, or to surrender any right, power or
option herein conferred upon the Company; or
(6) to make any change to comply with the TIA, or any amendment
thereafter, or any requirement of the SEC in connection with the
qualification of this Indenture under the TIA or any amendment thereof.
SECTION 9.02. WITH CONSENT OF HOLDERS. With the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding, the Company and the Trustee may amend this Indenture or
the Securities. However, without the consent of each Securityholder affected,
an amendment or supplement to this Indenture or the Securities may not:
(1) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;
(2) make any change to the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Securities or extend the time for payment of accrued
Original Issue Discount or interest, if any, on any Security;
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(3) reduce the Principal Amount or the Issue Price of or extend the
Stated Maturity of any Security;
(4) reduce the amount of cash payable in respect of conversion upon
the Company's election to pay cash with respect thereto, the Redemption
Price, Purchase Price or Change in Control Purchase Price of any Security
or extend the date on which the Purchase Price or Change in Control
Purchase Price of any Security is payable;
(5) make any Security payable in money or securities other than that
stated in the Security;
(6) make any change in Section 6.04 or this Section 9.02, except to
increase any percentage referred to therein, or make any change in Section
6.07;
(7) make any change that adversely affects the right to convert any
Security (including the right to receive cash in lieu of Common Stock
except as set forth in Section 9.01(4));
(8) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof and
this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase);
(9) make any change to the provisions of this Indenture relating to
the purchase of Securities at the option of the Holder pursuant to Section
3.08 or 3.09 which change would result in a violation of applicable federal
or state securities laws (including positions of the SEC under applicable
no-action letters), whether as a result of the exercise or performance of
any rights or obligations under such provisions or otherwise; or
(10) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then in
effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment or waiver becomes effective, a consent to it or any other
action by a Holder of a Security hereunder is a continuing consent by the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall
bind every Securityholder, except as provided in Section 9.02.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to receive, and (subject
to the provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
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ARTICLE 10
CONVERSION
SECTION 10.01. CONVERSION PRIVILEGE. A Holder of a Security may convert
such Security into Common Stock at any time during the period stated in
paragraph 8 of the Securities. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount thereof (the
"CONVERSION RATE") shall be that set forth in paragraph 8 in the Securities,
subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount of a Security if the
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.
"AVERAGE SALE PRICE" means the average of the Sale Prices of the Common
Stock for the shorter of
(i) 30 consecutive Trading Days ending on the last full Trading Day
prior to the Time of Determination with respect to the rights, options,
warrants or distribution in respect of which the Average Sale Price is
being calculated, or
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, options or warrants or
(b) the distribution, in each case, in respect of which the Average Sale
Price is being calculated and (y) proceeding through the last full trading
day prior to the Time of Determination with respect to the rights, warrants
or distribution in respect of which the Average Sale Price is being
calculated, or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance of
rights, warrants, or options or (b) distribution, in each case, for which
an adjustment is required by the provisions of Section 10.06(4), 10.07 or
10.08 and (y) proceeding through the last full Trading Day prior to the
Time of Determination with respect to the rights, warrants, or options or
distribution in respect of which the Average Sale Price is being
calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or
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reclassification to which Section 10.06(1), (2), (3) or (5) applies occurs
during the period applicable for calculating "Average Sale Price" pursuant to
the definition in the preceding sentence, "Average Sale Price" shall be
calculated for such period in a manner determined by the Board of Directors to
reflect the impact of such dividend, subdivision, combination or
reclassification on the Sale Price of the Common Stock during such period.
"TIME OF DETERMINATION" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants, or options
or a distribution, in each case, to which Sections 10.07 and 10.08 apply and
(ii) the time ("EX-DIVIDEND TIME") immediately prior to the commencement of
"ex-dividend" trading for such rights, options, warrants or distribution on the
New York Stock Exchange or such other national or regional exchange or market on
which the Common Stock is then listed or quoted.
SECTION 10.02. CONVERSION PROCEDURE. To convert a Security a Holder must
satisfy the requirements in paragraph 8 of the Securities. The date on which
the Holder satisfies all those requirements is the conversion date (the
"CONVERSION DATE"). The Company shall deliver to the Holder no later than the
seventh Business Day following the Conversion Date, through the Conversion
Agent, a certificate for the number of full shares of Common Stock issuable upon
the conversion and cash in lieu of any fractional share determined pursuant to
Section 10.03.
The person in whose name the certificate is registered shall be treated as
a stockholder of record on and after the Conversion Date; PROVIDED, HOWEVER,
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; PROVIDED, FURTHER, that such conversion shall be
at the Conversion Rate in effect on the date that such Security shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed. Upon conversion of a Security, such person shall no longer be
a Holder of such Security.
Holders may surrender a Security for conversion by means of book entry
delivery in accordance with paragraph 8 of the
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Securities and the regulations of the applicable book entry facility.
No payment or adjustment will be made for dividends on any Common Stock
except as provided in this Article 10. On conversion of a Security, that
portion of accrued Original Issue Discount attributable to the period from the
Issue Date to the Conversion Date with respect to the converted Security shall
not be cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof; and
the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of any fractional shares of Common Stock) shall be treated
as issued, to the extent thereof, first in exchange for Original Issue Discount
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be computed based
on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in
a place where the Conversion Agent is located, the Security may be surrendered
to such Conversion Agent on the next succeeding day that is not a Legal Holiday.
SECTION 10.03. FRACTIONAL SHARES. The Company will not issue a fractional
share of Common Stock upon conversion of a Security. Instead, the Company will
deliver cash for the current market value of the fractional share. The current
market value of a fractional share shall be determined to the nearest 1/1000th
of a share by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 10.04. TAXES ON CONVERSION. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock
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upon such conversion. However, the Holder shall pay any such tax which is due
because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificates
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by
law or regulations.
SECTION 10.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities for shares of
Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
SECTION 10.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the
Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
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(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of Capital
Stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to such
action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares or other units of two or more classes or series of
Capital Stock of the Company, the Conversion Rate shall thereafter be subject to
adjustment upon the occurrence of an action taken with respect to any such class
or series of Capital Stock as is contemplated by this Article 10 with respect to
the Common Stock, on terms comparable to those applicable to Common Stock in
this Article 10.
SECTION 10.07. ADJUSTMENT FOR RIGHTS ISSUE. If, after the Issue Date, the
Company distributes any rights, warrants or options to all holders of its Common
Stock entitling them, for a period expiring within 60 days after the record date
for such distribution, to purchase shares of Common Stock at a price per share
less than the Sale Price as of the Time of Determination, the Conversion Rate
shall be adjusted in accordance with the formula:
(0 + N)
-----------
R' = R x 0 + (N X P)
------
M
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
0 = the number of shares of Common Stock outstanding on the record date
for the distribution.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
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P = the offering price per share of such additional shares.
M = the Average Sale Price, MINUS, in the case of (i) a distribution to
which Section 10.06(4) applies or (ii) a distribution to which Section
10.08 applies, for which, in each case, (x) the record date shall
occur on or before the record date for the distribution to which this
Section 10.07 applies and (y) the Ex-Dividend Time shall occur on or
after the date of the Time of Determination for the distribution to
which this Section 10.07 applies, the fair market value (on the record
date for the distribution to which this Section 10.07 applies) of:
(1) the Capital Stock of the Company distributed in
respect of each share of Common Stock in such Section
10.06(4) distribution, and
(2) the assets of the Company or debt securities or any
rights, warrants or options to purchase securities of the
Company distributed in respect of each share of Common Stock
in such Section 10.08 distribution.
The Board of Directors shall determine fair market values for the purposes of
this Section 10.07.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 10.07 applies.
No adjustment shall be made under this Section 10.07 if the application of
the formula stated above in this Section 10.07 would result in value of R' that
is equal to or less than the value of R.
SECTION 10.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If, after the Issue
Date, the Company distributes to all holders of its Common Stock any of its
assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in Section 10.06 and distributions of
rights, warrants or options referred to in Section 10.07 and (y) cash dividends
or other cash distributions that are paid out of consolidated current net income
or earnings retained in the business as shown on the books of the Company unless
such cash dividends or other cash distributions are Extraordinary Cash
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Dividends (as defined below)), the Conversion Rate shall be adjusted, subject to
the provisions of the last paragraph of this Section 10.08, in accordance with
the formula:
M
R' = R x M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, MINUS, in the case of a distribution to which
Section 10.06(4) applies for which (i) the record date shall occur on
or before the record date for the distribution to which this Section
10.08 applies and (ii) the Ex-Dividend Time shall occur on or after
the date of the Time of Determination for the distribution to which
this Section 10.08 applies, the fair market value (on the record date
for the distribution to which this Section 10.08 applies) of any
Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 10.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 10.08 applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this Section 10.08 is being
applied (including, in the case of cash dividends or other cash
distributions giving rise to an adjustment, all such cash distributed
concurrently).
The Board of Directors shall determine fair market values for the purpose of
this Section 10.08.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 10.08 applies.
For purposes of this Section 10.08, the term "EXTRAORDINARY CASH DIVIDEND"
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set forth in items
(i) or (ii) below:
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(i) If, upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the eighty-five (85) consecutive
day period ending on the date prior to the Ex-Dividend Time with respect to
the cash dividend to which this provision is being applied equals or
exceeds 12.5% of the average of the Sale Prices during the period beginning
on the date after the first such Ex-Dividend Time in such period and ending
on the date prior to the Ex-Dividend Time with respect to the cash dividend
to which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the period
for calculating the average of the Sale Prices shall be the period
commencing 85 days prior to the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied),
such cash dividend together with each other cash dividend with an
Ex-Dividend Time occurring in such 85-day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 10.08, the value of "F" shall be equal to (w)
the aggregate amount of such cash dividend together with the amounts of the
other cash dividends with Ex-Dividend Times occurring in such period MINUS
(x) the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 10.08.
(ii) If upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend, together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the 365-consecutive-day period
ending on the date prior to the Ex-Dividend Time with respect to the cash
dividend to which this provision is being applied equals or exceeds 25% of
the average of the Sale Prices during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to which
this provision is being applied (except that if no other cash dividend has
had an Ex-Dividend Time occurring in such period, the period for
calculating the average of the Sale Prices shall be the period commencing
365 days prior to the date prior to the Ex-Dividend Time with respect to
the cash dividend to which this provision is being applied), such cash
dividend together with each other cash dividend with an Ex-Dividend Time
occurring in such 365-day period shall be deemed to be
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an Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 10.08, the value of "F" shall be equal to (y)
the aggregate amount of such cash dividend together with amounts of the
other cash dividends with Ex-Dividend Times occurring in such period MINUS
(z) the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 10.08.
In making the determinations required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis and the average of the Sale
Prices, in each case during the period specified in items (i) and (ii) above, as
applicable, shall be appropriately adjusted to reflect the occurrence during
such period of any event described in Section 10.06
In the event that, with respect to any distribution to which this Section
10.08 would otherwise apply, the difference "M-F" as defined in the above
formula is less than $1.00 or "F" is greater than "M", then the adjustment
provided by this Section 10.08 shall not be made and in lieu thereof the
provisions of Section 10.14 shall apply to such distribution.
SECTION 10.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% (E.G., if the Conversion Rate is 4, an increase or
decrease of .04 (1% of 4)) in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 10 shall be made to the nearest cent or
to the nearest 1/1,000th of a share, as the case may be, with one-half of a cent
and 5/10,000ths of a share being rounded upwards.
SECTION 10.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made
for a transaction referred to in Section 10.06, 10.07, 10.08 or 10.14 if
Securityholders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.
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No adjustment need be made for a change in the par value or no par value of
the Common Stock.
No adjustment need be made unless such adjustment, together with any other
adjustments similarly deferred equals at least 1% of the then current Conversion
Rate.
To the extent the Securities become convertible into cash pursuant to the
terms of Section 10.08 or 10.14, no adjustment need be made thereafter as to the
cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to the
extent, such adjustment results in the following quotient being less than the
par value of the Common Stock: (i) the Issue Price plus accrued Original Issue
Discount as of the date such adjustment would otherwise be effective divided by
(ii) the Conversion Rate as so adjusted.
SECTION 10.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall file with the Trustee and the Conversion Agent a
notice of such adjustment and a certificate from the Company's independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The Conversion Agent will promptly mail such notice to
Securityholders at the Company's expense. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
SECTION 10.12. VOLUNTARY INCREASE. The Company from time to time may
increase the Conversion Rate by any amount and for any period of time (PROVIDED,
that such period is not less than 20 Business Days). Whenever the Conversion
Rate is increased, the Company shall mail to Securityholders and file with the
Trustee and the Conversion Agent a notice of the increase. The Company shall
mail the notice at least 15 days before the date the increased Conversion Rate
takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Sections 10.06, 10.07 or
10.08.
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SECTION 10.13. NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 10.06, 10.07 or 10.08 (unless no
adjustment is to occur pursuant to Section 10.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution of the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the transaction.
SECTION 10.14. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. If the
Company is a party to a transaction subject to Section 5.01 (other than a sale
of all or substantially all of the assets of the Company in a transaction in
which the holders of Common Stock immediately prior to such transaction do not
receive securities, cash or other assets of the Company or any other person) or
a merger or binding share exchange which reclassifies or changes its outstanding
Common Stock, the person obligated to deliver securities, cash or other assets
upon conversion of Securities shall enter into a supplemental indenture. If the
issuer of securities deliverable upon conversion of Securities is an Affiliate
of the successor Company, that issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Security
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 10.
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The successor Company shall mail to Securityholders a notice briefly describing
the supplemental indenture.
If this Section applies, neither Section 10.06 nor 10.07 applies.
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 10.08, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 10.08, then, from and
after the record date for determining the holders of Common Stock entitled to
receive the distribution, a Holder of a Security that converts such Security in
accordance with the provisions of this Indenture shall upon such conversion be
entitled to receive, in addition to the shares of Common Stock into which the
Security is convertible, the kind and amount of securities, cash or other assets
comprising the distribution that such Holder would have received if such Holder
had converted the Security immediately prior to the record date for determining
the holders of Common Stock entitled to receive the distribution.
SECTION 10.15. COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to this Article 10 is
conclusive.
SECTION 10.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no duty
to determine when an adjustment under this Article 10 should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 10. Each Conversion Agent (other than the Company or an Affiliate of
the Company) shall have the same protection under this Section 10.16 as the
Trustee.
SECTION 10.17. SIMULTANEOUS ADJUSTMENTS. If this Article 10 requires
adjustments to the Conversion Rate under more than one of Sections 10.06(4),
10.07 or 10.08, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06, second, the provisions of
Section 10.08 and, third, the provisions of Section 10.07.
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SECTION 10.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the Conversion
Rate as so adjusted.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02 NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention:
with copy to:
if to the Trustee:
The Bank of New York
Corporate Trust Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed by
first-class mail to the Securityholder at the Securityholder's address as it
appears on the registration books
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of the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Trustee may require the Company to furnish either or
both of the following:
(1) an Officers' Certificate stating that, in the opinion of the
principal signer thereof, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that the principal signer of such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of the principal signer, he or
she has made such examination or investigation
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as is necessary to enable such person to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 11.06 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.07 RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting of
the Securityholders. The Registrar, Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
SECTION 11.08 LEGAL HOLIDAY. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and to the extent applicable no Original Issue Discount or
interest, if any, shall accrue for the intervening period.
SECTION 11.09 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.11 SUCCESSORS. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 11.12 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
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SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
JACOR COMMUNICATIONS, INC.
By
-------------------------------------
Title:
THE BANK OF NEW YORK,
as Trustee
By
-------------------------------------
Title:
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EXHIBIT A
[FORM OF FACE OF LYON]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT OF THIS SECURITY IS $____, THE ISSUE DATE IS ______, 1996, AND
THE YIELD TO STATED MATURITY IS __% PER ANNUM (COMPUTED ON A SEMIANNUAL BOND
EQUIVALENT BASIS).
A-1
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JACOR COMMUNICATIONS, INC.
LIQUID YIELD OPTIONTM NOTE DUE 2011
(ZERO COUPON -- SENIOR)
No.
Issue Date: ______, 1996 CUSIP No. ___________
Issue Price: $_____
Original Issue Discount: $_____
(for each $1,000 Principal amount)
Jacor Communications, Inc., a Delaware corporation, promises to pay to
___________________________________, or registered assigns, the Principal Amount
of __________________________ Dollars on ______, 2011.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security. All capitalized terms used herein without definition
shall have the respective meanings assigned thereto in the Indenture referred to
on the other side of this Security.
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Additional provisions of this Security are set forth on the other side of
this Security.
JACOR COMMUNICATIONS, INC.
By: ________________________
Title:
ATTEST:
_______________________________
(Seal)
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
________________________________
as Trustee, certifies that this Security
is one of the Securities referred to
in the within-mentioned Indenture.
By: __________________________________
Authorized Signatory
Date: ________________________
A-3
<PAGE>
[FORM OF REVERSE SIDE OF LYON]
LIQUID YIELD OPTION-TM- NOTE DUE 2011
(ZERO COUPON -- SENIOR)
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph. If the Principal Amount hereof or any portion of such Principal
Amount is not paid when due (whether upon acceleration pursuant to Section 6.02
of the Indenture, upon the date set for payment of the Redemption Price pursuant
to paragraph 5 hereof, upon the date set for payment of a Purchase Price or
Change in Control Purchase Price pursuant to paragraph 6 hereof or upon the
Stated Maturity of this Security) or if shares of Common Stock (or cash in lieu
of fractional shares) in respect of a conversion of this Security in accordance
with the terms of Article 10 of the Indenture is not delivered when due, then in
each such case the overdue amount shall bear interest at the rate of __% per
annum, compounded semiannually (to the extent that the payment of such interest
shall be legally enforceable), which interest shall accrue from the date such
overdue amount was due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount of the Security), in the period during which a Security remains
outstanding, shall accrue at __% per annum, on a semiannual bond equivalent
basis using a 360-day year composed of twelve 30-day months, commencing on the
Issue Date of this Security, and cease to accrue on the earlier of (a) the date
on which the Principal Amount at Stated Maturity hereof or any portion of such
Principal Amount at Stated Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date
or other date on which such Original Issue Discount shall cease to accrue in
accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Jacor Communications,
Inc. (the "Company") will make payments in respect of the Securities to the
persons who are registered Holders of Securities at the close of business on the
Business Day preceding the Redemption Date or Stated Maturity, as the case may
be, or at the close of business on a Purchase Date, Change in Control Purchase
Date or Conversion Date, as the case may be. Holders must surrender Securities
to a Paying Agent to collect such payments in respect of the Securities. The
Company will pay cash amounts in money of The United States of America that at
the time of payment is legal tender
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for payment of public and private debts. However, the Company may make such cash
payments in respect of a certificated Security, if applicable, by check payable
in such money.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, The Bank of New York, a New York banking corporation, as trustee
(the "Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar, upon notice to the Trustee and the Holders. The Company or any of
its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture, dated as of ______,
1996 (the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, and, as in effect on the date of the
Indenture (the "TIA"), except as provided in Section 9.03 of the Indenture.
Capitalized terms used herein or on the face hereof and not defined herein have
the meanings ascribed thereto in the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
the aggregate Principal Amount at Stated Maturity specified in Section 2.02 of
the Indenture (subject to Section 2.07 of the Indenture). The Indenture does
not limit other indebtedness of the Company, secured or unsecured.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, PROVIDED, that the
Securities are not redeemable prior to ______, 2001.
The table below shows the Redemption Prices of a Security per $1,000
Principal Amount at Stated Maturity on the dates shown below and at Stated
Maturity, which prices reflect accrued Original Issue Discount calculated to
each such date. The Redemption Price of a Security redeemed between such dates
would include an additional amount reflecting the additional Original Issue
Discount accrued from and including the next preceding date in the table through
the actual Redemption Date.
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(1) (2) (3)
ACCRUED
ORIGINAL
LYON ISSUE REDEMPTION
ISSUE DISCOUNT PRICE
REDEMPTION DATE PRICE AT % (1) + (2)
, 2001............. $___.__ $___.__ $___.__
, 2002............. ___.__ ___.__ ___.__
, 2003............. ___.__ ___.__ ___.__
, 2004............. ___.__ ___.__ ___.__
, 2005............. ___.__ ___.__ ___.__
, 2006............. ___.__ ___.__ ___.__
, 2007............. ___.__ ___.__ ___.__
, 2008............. ___.__ ___.__ ___.__
, 2009............. ___.__ ___.__ ___.__
, 2010............. ___.__ ___.__ ___.__
At maturity.............. ___.__ ___.__ 1,000.00
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Stated Maturity of such Securities, upon
delivery of a Purchase Notice containing the information set forth in the
Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on such
Purchase Date and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture. Such Purchase Price (equal to the Issue
Price plus accrued Original Issue Discount through such Purchase Date) may be
paid, at the option of the Company, in cash or by the issuance and delivery of
shares of Common Stock of the Company, or in any combination thereof.
PURCHASE DATE PURCHASE PRICE
__, 2001 $___.__
__, 2006 $___.__
Subject to the terms and conditions of the Indenture, if any Change in
Control occurs on or prior to ______, 2001, the Company shall, at the option of
the Holder, purchase all Securities for which a Change in Control Purchase
Notice shall have been delivered as provided in the Indenture and not withdrawn,
on the
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date that is 35 Business Days after the occurrence of such Change in
Control, for a Change in Control Purchase Price equal to the Issue Price plus
accrued Original Issue Discount through the Change in Control Purchase Date,
which Change in Control Purchase Price shall be paid in cash.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture prior to
the close of business on the Purchase Date or Change in Control Purchase Date,
as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control Purchase
Price of all Securities or portions thereof to be purchased as of the Purchase
Date or the Change in Control Purchase Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Purchase Date or the
Change in Control Purchase Date, as the case may be, Original Issue Discount
ceases to accrue on such Securities (or portions thereof) on and after such
date, and the Holders thereof shall have no other rights as such (other than the
right to receive the Purchase Price or Change in Control Purchase Price, as the
case may be, upon surrender of such Security).
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption
Price of all Securities (or portions thereof) to be redeemed on the Redemption
Date is deposited with the Paying Agent prior to or on the Redemption Date, on
and after such date Original Issue Discount ceases to accrue on such Securities
or portions thereof. Securities in denominations larger than $1,000 of
Principal Amount may be redeemed in part but only in integral multiples of
$1,000 of Principal Amount.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security may
convert it into Common Stock of the Company at any time before the close of
business on ______, 2011; PROVIDED, HOWEVER, that if a Security is called for
redemption, the Holder may convert it at any time before the close of business
on the Redemption Date. The number of shares of Common Stock to be delivered
upon conversion of a Security into Common Stock per $1,000 of Principal Amount
shall be equal to the Conversion Rate. A Security in respect of which a Holder
has delivered a Purchase
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Notice or Change in Control Purchase Notice exercising
the option of such Holder to require the Company to purchase such Security may
be converted only if the notice of exercise is withdrawn in accordance with the
terms of the Indenture.
The initial Conversion Rate is ____ shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events described in the
Indenture. The Company will deliver cash or a check in lieu of any fractional
share of Common Stock.
To convert a Security a Holder must (i) complete and manually sign the
conversion notice on the back of the Security (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent (or
the office or agency referred to in Section 4.05 of the Indenture), (ii) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (iii) pay any transfer or similar tax, if
required.
If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
total Principal Amount of the Securities converted.
A Holder may convert a portion of a Security if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. No payment or adjustment
will be made for dividends on the Common Stock except as provided in the
Indenture. On conversion of a Security, that portion of accrued Original Issue
Discount attributable to the period from the Issue Date to the Conversion Date
with respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed paid in full to the Holder thereof through
the delivery of the Common Stock in exchange for the Security being converted
pursuant to the terms hereof; and the fair market value of such Common Stock
(together with any cash payment in lieu of fractional shares of Common Stock)
shall be treated as issued, to the extent thereof, first in exchange for
Original Issue Discount accrued through the Conversion Date, and the balance, if
any, of such fair market value of such shares of Common Stock (and any such cash
payment) shall be treated as issued in exchange for the Issue Price of the
Security being converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Sale Price at the Time
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of Determination; and distributions to such holders of assets or debt
securities of the Company or certain rights to purchase securities of the
Company (excluding certain cash dividends or distributions). However, no
adjustment need be made if Securityholders may participate in the transaction
or in certain other cases.
The Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange of the type specified in the Indenture, or certain transfers of all or
substantially all of its assets to another person, or in certain other
circumstances described in the Indenture, the right to convert a Security into
Common Stock may be changed into a right to convert it into securities, cash or
other assets of the Company or another person.
9. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, together with accrued interest if any, to the Redemption Date,
by one or more investment bankers or other purchasers who may agree with the
Company to purchase such Securities from the Holders and to make payment for
such Securities to the Trustee in trust for such Holders.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in fully registered form, without coupons, in
denominations of $250,000 of Principal Amount and integral multiples of $1,000.
A Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
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11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
12. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, PROVIDED,
HOWEVER, that the Trustee or such Paying Agent, before being required to make
any such return, may at the expense of the Company cause to be published once in
THE WALL STREET JOURNAL or another newspaper of national circulation or mail to
each such Holder notice that such money or securities remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing, any unclaimed money or securities then
remaining will be returned to the Company. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person, and the Trustee and the Paying Agent shall have no further liability
with respect to such money or securities for that period commencing after the
return thereof.
13. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written consent of the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article 5 or Section 10.14 of the Indenture or to make any change that does not
adversely affect the rights of any Securityholder, or to comply with any
requirement of the SEC in connection with the qualification of the Indenture
under the TIA.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in
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Control Purchase Price, as the case may be, in respect of the Securities when
the same becomes due and payable; (ii) failure either to deliver shares of
Common Stock (or cash in lieu of fractional shares) in accordance with the terms
of the Indenture when such Common Stock (or cash in lieu of fractional shares)
is required to be delivered following conversion of a Security and such failure
is not remedied for a period of 10 days; (iii) failure by the Company to comply
with other agreements in the Indenture or the Securities, subject to notice and
lapse of time; (iv) default (A) in the payment of any principal on any debt for
borrowed money of the Company (excluding any non-recourse debt), in an aggregate
principal amount in excess of $10 million when due at its final maturity after
giving effect to any applicable grace period and the holder thereof shall have
taken affirmative action to enforce the payment thereof, or (B) in the
performance of any term or provision of any debt for borrowed money of the
Company (excluding any non-recourse debt) in an aggregate principal amount in
excess of $10 million that results in such debt becoming or being declared due
and payable prior to the date on which it would otherwise become due and
payable, unless, in the case of either clause (A) or (B) above, (x) such
acceleration or action to enforce payment, as the case may be, has been
rescinded or annulled, (y) such debt has been discharged or (z) a
sum sufficient to discharge in full such debt has been deposited in trust by or
on behalf of the Company, in each case, within a period of 10 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Securities, a written notice specifying such default or defaults
and stating that such notice is a "Notice of Default" hereunder; or (v) certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding, may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default that will result in the Securities becoming due and
payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) above) if it determines that withholding notice is in their interests.
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15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Certificate of Authentication on the other side of
this Security.
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common) and CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
19. GOVERNING LAW
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
_______________________
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
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Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
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ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill To convert this Security into
in the form below: Common Stock of the Company,
check the box:
I or we assign and transfer -----
this Security to : :
: :
-----
(Insert assignee's soc.
sec. or tax ID no.) To convert only part of this
Security, state the Principal
______________________________ Amount to be converted (which
must be $1,000 or an integral
______________________________ multiple of $1,000):
--------------------
______________________________ :$ :
--------------------
______________________________
(Print or type assignee's
name, address and zip code) If you want the stock
certificate made out in
and irrevocably appoint another person's name, fill
___________________ agent in the form below:
to transfer this Security on
the books of the Company. The -------------------
agent may substitute another : :
to act for him. -------------------
(Insert person's soc.
sec. or tax ID no.)
______________________________
______________________________
______________________________
______________________________
(Print or type person's name,
address and zip code)
_________________________________________________________________
Date: Your Signature: *
_________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
* Your signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security
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Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
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EXHIBIT 5.1
[GRAYDON, HEAD & RITCHEY LETTERHEAD]
June __, 1996
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Re: Sale of $258,750,000 Aggregate Principal Amount at
Maturity of Liquid Yield Option Notes due 2011 of Jacor
Communications, Inc. Pursuant to Registration Statement
on Form S-3, File No. 333-02495, Filed with the
Securities and Exchange Commission
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Jacor Communications, Inc. (the "Company"),
an Ohio corporation, in connection with the registration of $258,750,000
Aggregate Principal Amount at Maturity of Liquid Yield Option Notes due 2011
of the Company (the "LYONs"), and the underlying shares of the Company's
common stock, no par value, as may be required for issuance upon conversion
of the LYONs (the "Conversion Shares"), all of which are being sold by the
Company as set forth on the Form S-3 Registration Statement, File No.
333-02495, as amended, as filed by the Company with the Securities and
Exchange Commission.
As counsel for the Company we have made such legal and factual
examinations and inquiries as we deem advisable for the purpose of rendering
this opinion. In addition, we have examined such documents and materials,
including the Amended and Restated Articles of Incorporation, as amended, the
Amended and Restated Code of Regulations, as amended, and other corporate
records of the Company, as we have deemed necessary for the purpose of this
opinion.
On the basis of the foregoing, we express the following opinions:
(i) the LYONs, when authenticated in accordance with the terms of the
indenture (the "Indenture") to be entered into between the Company and The
Bank of New York, as trustee, a copy of which is filed as an exhibit to the
Registration Statement, and delivered
<PAGE>
Jacor Communications, Inc.
June __, 1996
Page 2
and paid for as contemplated by the Registration Statement, will constitute a
valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors's rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except to the
extent that a waiver of rights under any usury laws may be unenforceable; and
(ii) the Conversion Shares of initially issuable upon conversion of the
LYONs have been duly authorized and reserved for issuance upon conversion of
the LYONs, are free of preemptive rights, and, when issued upon conversion of
the LYONs in accordance with the terms of the Indenture, will be validly
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as part of the
above-referenced Registration Statement and amendments thereto and to the
reference to our firm in both the preliminary and final Prospectus under the
caption "Legal Matters."
Very truly yours,
GRAYDON, HEAD & RITCHEY
By: ____________________________________
Richard G. Schmalzl
