SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 28, 1996
MULTI-MARKET RADIO, INC.
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(Exact name of registrant as specified in charter)
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Delaware 0-22080 33-3707697
(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
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150 East 58th Street, New York, New York 10155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9150
N/A
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(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT
On August 28, 1996, Robert F.X. Sillerman converted, pursuant to the
terms and conditions of the Certificate of Incorporation of Multi-Market Radio,
Inc. (the "Company"), certain non-voting stock of the Company into 493,334
shares of Class B Common Stock which has 10 votes per share, thereby giving Mr.
Sillerman voting control of the Company on most matters. Since the Company's
formation in 1993, Robert F.X. Sillerman, the Chairman of the Board of SFX
Broadcasting, Inc. ("SFX"), has held among the largest economic interest in the
Company. Mr. Sillerman's non-voting interest was comprised of 360,000 shares of
the Company's Class C Common Stock and 133,334 shares of the Company's
Preferred Stock. The Class B Common Stock has ten votes per share and the
publicly-held Class A Common Stock has one vote per share on most matters. As a
result of such conversions, Mr. Sillerman may be deemed to be the beneficial
owner of shares representing approximately 53.5% of the combined voting power
of the Company. Under limited circumstances, including the Company's pending
merger with SFX (the "Merger"), the Class B Common Stock will have only one
vote per share. Accordingly, in connection with the approval of the Merger, Mr.
Sillerman holds shares representing 17.6% of the combined voting power of the
Company.
Of the 493,334 shares of Class B Common Stock held by Mr. Sillerman,
133,334 of such shares (the "Escrow Shares") are being held in escrow pursuant
to an agreement which allows Mr. Sillerman to vote such shares but provides
that he may not sell, transfer or otherwise dispose of them prior to July 29,
1998. Pursuant to the terms of such agreement, the Escrow Shares will be
released on July 29, 1998, provided that certain conditions are met.
Mr. Sillerman's conversion of Class C Common Stock and Preferred Stock
into Class B Common Stock constitutes a change of control of the Company under
the Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder. Prior to such conversion, the change in control of the
Company was approved by the Federal Communications Commission.
Pursuant to the terms of the Company's Certificate of Incorporation,
Mr. Sillerman's right to convert his non-voting stock into Class B Common Stock
was dependent upon certain conditions, including the existence, after May 15,
1996, of an event of default in the Company's obligations under its credit
arrangements. The Company had defaulted under a covenant under its existing
senior credit facility with respect to limits on its annual corporate overhead
expenditures on several prior occasions, which defaults were waived by the
Company's senior lender. The Company again defaulted under this covenant in the
third quarter, which default was waived subsequent to Mr. Sillerman's
conversion. Mr. Sillerman's ability to assume voting control of the Company was
made possible as a result of the recent passage of the Telecommunications Act
of 1996, which eliminated the limits on the number of radio stations one person
or entity may own nationally and liberalized the limits on the number of radio
stations one person or entity may own locally. The Merger agreement provides
that the Company's senior credit facility will be repaid in full.
Mr. Sillerman and all members of the Company's management have
informed the Company that they intend to vote their shares in favor of the
Merger.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 4, 1996 the Company acquired radio station WKSS-FM, which
serves the Hartford, Connecticut market, for approximately $18.0 million. The
purchase price was determined by arms-length negotiations between the parties.
On September 4, 1996, the Company entered into a loan agreement with SFX
pursuant to which SFX agreed to lend the Company $18.0 million to fund the
acquisition of WKSS-FM and an additional $5.0 million for working capital. The
loan bears interest at 12% per annum and the principal of the loan will be
payable as follows: (i) if the Merger is consummated, the loan plus accrued
interest shall be due within 30 days thereafter; (ii) if the Merger is
terminated pursuant to certain sections of the Merger agreement (the "Merger
Agreement") and the Company exercises its right pursuant to the Merger
Agreement to acquire certain radio stations from SFX for an aggregate purchase
price of $100 million, than (a) $750,000 of the outstanding principal of the
loan, plus accrued interest thereon, shall be due on the date the Company
exercises such option, (b) $17,250,00 of the outstanding principal of the loan,
plus accrued interest thereon, shall be due upon the closing of such
acquisitions and (c) the balance of the loan, plus accrued interest thereon,
shall be due on the date the Merger Agreement is terminated; (iii) if the
merger is terminated pursuant to certain sections of the Merger Agreement and
SFX exercises its right pursuant to the Merger Agreement to exchange (the
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"Exchange") certain of its radio stations for certain of the Company's radio
stations, than (a) $18.0 million of the outstanding principal of the loan, plus
accrued interest thereon, shall be due on the date of the closing of the
Exchange and (b) the balance of the outstanding principal of the loan shall be
due on the date the Merger Agreement is terminated; (iv) if the Merger
Agreement is terminated pursuant to certain sections of the Merger Agreement,
the entire outstanding principal of the loan, plus accrued interest thereon,
shall be due within 45 days of the date of such termination and $18.0 million
of the outstanding principal shall be repaid in full by means of a transfer to
SFX of the Company's ownership interest in WKSS-FM.
To secure the loan, the Company pledged the shares of its wholly-owned
subsidiary which acquired the assets of WKSS-FM to SFX. In addition, the
Company granted SFX a security interest in all of the assets of such
subsidiary in which a security interest could be granted.
On August 29, 1996, the Company acquired radio stations WSTZ-FM and
WZRX-AM, both of which serve the Jackson, Mississippi market, for approximately
$3.5 million. The purchase price was determined by arms-length negotiations
between the parties. The purchase price was financed by SFX and the Company
transferred WSTZ-FM and WZRX-AM to SFX simultaneously with the purchase of such
stations pursuant to the Merger Agreement, as amended.
On August 29, 1996, the Company acquired radio station WMYB-FM, which
serves the Myrtle Beach, South Carolina market, for approximately $1.1 million.
The purchase price was determined by arms-length negotiations between the
parties.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of the Business Acquired
It is impracticable to file the financial information with
respect to the acquisition of WKSS-FM required by Item 7(a)
at this time for the years ended December 31, 1994 and 1995
and the period ended June 30, 1996, because this information
is not yet available. The Company will file such information
as soon as practicable but not later than 60 days following
September 12, 1996.
(b) Pro Forma Financial Information
It is impracticable to file the pro forma financial
information with respect to the acquisition of WKSS- FM
required by Item 7(b) at this time for the required period
because that information is not yet available. The Company
will file that information as soon as is practicable but not
later than 60 days following September 12, 1996.
(c) Exhibits
10.1 Loan Agreement, dated September 4, 1996, by and between
Multi-Market Radio, Inc. and SFX Broadcasting, Inc.
10.2 Consent Agreement, dated May 17, 1996, by and among The Huff
Alternative Income Fund, L.P., Multi-Market Radio, Inc. and
SFX Broadcasting, Inc.
10.3 Registration Rights Agreement, dated May 17, 1996, by and
among The Huff Alternative Income Fund, L.P., Multi-Market
Radio, Inc. and SFX Broadcasting, Inc.
10.4 Form of Warrants.
99.1 Press Release, dated August 29,1996, with respect to the
acquisition of WMYB-FM.
99.2 Press Release dated, September 4, 1996, with respect to the
acquisition of WKSS-FM.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
MULTI-MARKET RADIO, INC.
By: /s/ Jerry Emlet
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Name: Jerry Emlet
Title: Chief Financial Officer
Date: September 10, 1996
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<PAGE>
EXECUTION COPY
$23,000,000 LOAN AGREEMENT
between
MULTI-MARKET RADIO, INC.,
as Borrower
and
SFX BROADCASTING, INC.,
as Lender
Dated as of September 4,1996
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TABLE OF CONTENTS
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ARTICLE ONE: DEFINITIONS.........................................................................................1
Section 1.1 Definitions............................................................................1
ARTICLE TWO: TERMS OF LOAN.......................................................................................3
Section 2.1 Loans..................................................................................3
Section 2.2 Use of Proceeds........................................................................3
Section 2.3 Note...................................................................................3
Section 2.4 Interest...............................................................................3
Section 2.5 Computations...........................................................................3
Section 2.6 Principal Payments.....................................................................3
Section 2.7 General Provisions Relating to Payments................................................5
Section 2.8 Prepayments............................................................................5
Section 2.9 Taxes..................................................................................5
Section 2.10 Assignment by Lender...................................................................5
ARTICLE THREE: REPRESENTATIONS AND WARRANTIES....................................................................5
Section 3.1 Representations and Warranties.........................................................5
(a) Organization...........................................................................6
(b) Authority of Borrower..................................................................6
(c) Binding Agreement......................................................................6
(d) No Violation of Law or Charter.........................................................6
(e) Judgments, Actions, Proceedings........................................................6
(f) Assets.................................................................................6
(g) Solvency...............................................................................6
(h) Use of Proceeds........................................................................6
(i) Taxes..................................................................................6
(j) Completeness and Accuracy..............................................................7
ARTICLE FOUR: CONDITIONS TO LOAN.................................................................................7
Section 4.1 Conditions to Loan.....................................................................7
(a) Note...................................................................................7
(b) Stock Pledge Agreement.................................................................7
(c) Security Agreement.....................................................................7
(d) Evidence of Corporate Action...........................................................7
(e) Other Documents........................................................................7
(i)
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ARTICLE FIVE: COVENANTS OF BORROWER..............................................................................8
Section 5.1 Affirmative Covenants..................................................................8
(a) Information............................................................................8
(b) Audits.................................................................................8
(c) Inspections............................................................................8
(d) Taxes..................................................................................8
(e) Insurance..............................................................................8
(f) Existence..............................................................................8
(g) Compliance with Laws...................................................................8
(h) Local Marketing Agreement..............................................................9
(i) Ownership of Hartford Station .........................................................9
Section 5.2 Negative Covenants.....................................................................9
ARTICLE SIX: DEFAULT, ACCELERATION AND REMEDIES..................................................................9
Section 6.1 Events of Default......................................................................9
Section 6.2 Remedies Upon Default.................................................................10
ARTICLE SEVEN: INDEMNIFICATION..................................................................................11
Section 7.1 Indemnification.......................................................................11
ARTICLE EIGHT: MISCELLANEOUS....................................................................................11
Section 8.1 Power of Attorney.....................................................................11
Section 8.2 Expenses..............................................................................11
Section 8.3 Counterclaims, Defenses, etc..........................................................11
Section 8.4 Notices...............................................................................12
Section 8.5 Successors and Assigns................................................................12
Section 8.6 Survival of Representations and Warranties............................................12
Section 8.7 Set-Off...............................................................................13
Section 8.8 Applicable Law........................................................................13
Section 8.9 Modifications, Consents and Waivers...................................................13
Section 8.10 Titles and Headings...................................................................13
Section 8.11 Further Assurances....................................................................13
Section 8.12 Entire Agreement......................................................................13
EXHIBIT A - FORM OF NOTE
EXHIBIT B - FORM OF STOCK PLEDGE AGREEMENT
EXHIBIT C - FORM OF SECURITY AGREEMENT
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(ii)
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LOAN AGREEMENT
This Loan Agreement (the "Agreement") is made as of the 4th
day of September, 1996, between MULTI-MARKET RADIO, INC., a company organized
under the laws of Delaware and (the "Borrower"), and SFX BROADCASTING, INC.
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower wishes to obtain a loan or loans from
the Lender in the aggregate principal sum of up to $23,000,000; and
WHEREAS, the Lender is willing to make such loan to the
Borrower for the purposes and upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 2.1 In addition to the terms defined elsewhere in
this Agreement, the following terms shall have the following meanings:
"Alternative Payment Method" means the following method of
repaying the Loan:
(a) $18,000,000 of the outstanding principal of the Loan plus
accrued interest on such amount shall be repaid in full by means of the
transfer (such transfer, the "Hartford Station Transfer") to the Lender by the
Borrower of its entire ownership interest in, or all of the assets of, MMR
Hartford, which holds or will hold title to the Hartford Station pursuant to
Section 5.2(i) hereof. The Hartford Station Transfer shall be evidenced by
asset sale, stock purchase and/or other documentation in form and substance
satisfactory to the Lender.
(b) The balance of the Loan plus accrued interest thereon
(collectively, the "Loan Balance") shall be repaid by means of the set-off of
such amount against any and all debts or obligations of any type or character
owing by the Lender to the Borrower, including without limitation any amounts
owed by the Lender to the Borrower under the Merger Agreement.
(c) The portion of the Loan Balance, if any, remaining after
application of the provisions of clauses (a) and (b) of this definition (such
amount, the "Subordinated Amount") shall be repaid by the Borrower to the Lender
immediately in Dollars, provided that, notwithstanding anything herein to the
contrary, payment of the Subordinated Amount shall be subordinated in right of
payment to the prior payment in full of all obligations and amounts owed
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by the Borrower to Finova Capital Corporation and The Huff Alternative Fund L.P.
(such obligations to such entities, collectively, the "Senior Debt"). The
Borrower shall not be required to make any payments in respect of the
Subordinated Amount until the Senior Debt shall have been paid in full.
"Dollars" and the sign "$" means the lawful money of the
United States of America.
"Hartford Station" means all of the assets acquired, directly
or indirectly, by the Borrower relating to the radio station WKSS-FM, Hartford,
Connecticut, pursuant to the Asset Purchase Agreement dated as of April 1, 1996
between the Borrower, as Buyer, and Precision Media Corporation, as Seller.
"Loan Documents" means collectively, this Agreement, the
Note, the Security Agreement, the Stock Pledge Agreement and all other
agreements, instruments and documents executed in connection herewith or
therewith.
"Local Marketing Agreement" means a local marketing
arrangement, sale agreement, time brokerage agreement, management agreement or
similar arrangement pursuant to which the Lender, subject to customary
preemption rights and other limitations (i) obtains the right to sell at least
a majority of the advertising inventory of the Hartford Station, (ii) obtains
the right to broadcast programming and sell advertising time during a majority
of the air time of the Hartford Station or (iii) manages the selling operations
of the Hartford Station with respect to at least a majority of the advertising
inventory of such station.
"Merger" means the pending merger transaction between SFX
Merger Company, a wholly owned subsidiary of the Lender, with and into the
Borrower, pursuant to which the Borrower will become a wholly owned subsidiary
of the Lender.
"Merger Agreement" means the Amended and Restated Agreement
and Plan of Merger entered into between the Borrower and the Lender dated as of
April 15, 1996, as amended by Amendment No.1 dated as of May 6, 1996 and
Amendment No.2 dated as of July 30, 1996, and as such agreement may be further
amended from time to time.
"MMR Hartford" means Multi-Market Radio of Hartford, Inc., a
wholly owned subsidiary of the Borrower.
ARTICLE TWO
TERMS OF LOAN
SECTION 3.1 Loans. The Lender hereby agrees, upon the request
of the Borrower, on the terms and subject to the conditions of this Agreement,
to make a loan or loans
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to the Borrower in the principal amount of up to $23,000,000 (the "Loan"). On
the date hereof, the amount of $2.5 million has been advanced.
SECTION 3.2 Use of Proceeds. The proceeds of the Loan shall
be used by the Borrower as follows: (i) up to $18,000,000 shall be used by the
Borrower to acquire ownership of the Hartford Station and (ii) up to $5,000,000
shall be used by the Borrower for working capital purposes. The Lender shall
not have any responsibility to oversee the application of the Loan proceeds by
the Borrower.
SECTION 3.3 Note. The Loan shall be evidenced by a promissory
note of the Borrower to the order of the Lender in substantially the form of
Exhibit A hereto (the "Note").
SECTION 3.4 Interest. The Borrower agrees to pay to the
Lender interest as hereinafter provided on the outstanding principal amount of
the Loan from the date of each advance until the Loan is repaid in full. The
Loan shall bear interest on the principal amount thereof from time to time
outstanding at the rate of 12% per annum compounded semi-annually, and accrued
interest shall be paid in full on the date when the principal of the Loan shall
be due and payable. Notwithstanding the foregoing, the Borrower shall pay
interest on the Loan or any installment thereof, and on any other amount
payable by the Borrower hereunder which shall not be paid in full when due
(whether at stated maturity, by acceleration or otherwise) for the period
commencing on the due date thereof until the same is paid in full at a rate per
annum equal to 14% (the "Default Rate").
SECTION 3.5 Computations. Interest on the Loan and all other
amounts due hereunder shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day, but excluding the last).
SECTION 3.6 Principal Payments. The principal of the Loan
shall be repaid in accordance with the following provisions:
(a) If the Merger is consummated, the Loan and all
obligations of the Borrower to pay principal, interest and other amounts to the
Lender under the Loan Documents shall become due and payable in full 30 days
thereafter.
(b) If (i) the Merger Agreement is terminated pursuant to
Section 8.01(a), (b) (c)(ii), (c)(iii), (f), (g), (h), (j), (l), (m) or (n)
thereof, and (ii) the Borrower shall exercise its right under Section 6.17(b)
thereof to acquire the Liberty Stations (as such term is defined in Section
6.17(b) of the Merger Agreement) from the Lender for $100 million in cash, the
entire outstanding principal amount of the Loan plus accrued interest thereon
shall be due and payable as follows:
(1) On the date the Borrower exercises its option to purchase
the Liberty Stations pursuant to Section 6.17(b) of the Merger Agreement, the
Borrower shall pay to the Lender $750,000 of the outstanding principal of the
Loan plus accrued interest thereon. Such payment (A) shall accompany the
written notice from the Borrower of the exercise of such option
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<PAGE>
required to be delivered under the Merger Agreement, and (B) shall be in
addition to any payments or deposits by the Borrower required on such date
pursuant to the Merger Agreement in connection with the payment of the $100
million purchase price for the Liberty Stations;
(2) On the date of closing of the acquisition of the Liberty
Stations pursuant to the Borrower's exercise of its option under the Merger
Agreement, the Borrower shall pay to the Lender $17,250,000 of the outstanding
principal of the Loan plus accrued interest thereon. Such payment shall be in
addition to any payments by the Borrower required on such date pursuant to the
Merger Agreement in connection with the payment of the $100 million purchase
price for the Liberty Stations; and
(3) The balance of the Loan plus accrued interest thereon
shall be due and payable on the date the Merger Agreement is terminated under
the circumstance referred to in Section 2.6(b)(i) hereof and shall be repaid in
accordance with the provisions of clauses (b) and (c) of the definition of
Alternative Payment Method set forth in Section 1.1 hereof.
(c) If (i) the Merger Agreement is terminated pursuant to
Section 8.01(a), (b), (f), (h), (j) or (l) thereof, and (ii) the Lender shall
exercise its right under Section 6.17(b) thereof to structure the Exchange for
the Liberty Stations (as such terms are defined in Section 6.17(b) of the
Merger Agreement), the entire outstanding principal amount of the Loan plus
accrued interest thereon shall be due and payable as follows:
(1) On the date of closing of the Exchange pursuant to
exercise by the Lender of its option under the Merger Agreement, the Borrower
shall pay to the Lender $18 million of the outstanding principal of the Loan
plus accrued interest thereon; and
(2) The balance of the Loan plus accrued interest thereon
shall be due and payable on the date the Merger Agreement is terminated under
the circumstances referred to in Section 2.6(c)(i) hereof and shall be repaid
in accordance with the provisions of clauses (b) and (c) of the definition of
Alternative Payment Method set forth in Section 1.1 hereof.
(d) If the Merger Agreement is terminated for any reason, or
the Merger is abandoned or fails to be consummated for any reason, other than
under the circumstances described in Sections 2.6(b) and (c) above (the date of
such termination, abandonment or failure, hereinafter the "Merger Termination
Date"), the entire outstanding principal of the Loan plus accrued interest
thereon shall be due and payable in full 45 days after the Merger Termination
Date and shall be repaid by the Borrower in accordance with the Alternative
Payment Method. With respect to the Alternative Payment Method procedures, it
shall not be an Event of Default hereunder if, as of such due date, (i) the
parties shall have filed applications for FCC and/or other government approvals
required to complete the Hartford Station Transfer and (ii) the Borrower is
using its best efforts and cooperating with the Lender in good faith, and
thereafter shall continue to use its best efforts and cooperate with the Lender
in good faith, to consummate the Hartford Station Transfer as soon as
practicable and in any event within nine months following the Merger
Termination Date.
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<PAGE>
SECTION 3.7 General Provisions Relating to Payments. All
payments of principal, interest and other amounts payable by the Borrower
hereunder, shall be made in Dollars in immediately available funds to the
Lender's account as designated by the Lender from time to time in writing.
SECTION 3.8 Prepayments. The Borrower shall have the right to
prepay the Loan from time to time in whole or in part, without premium or
penalty.
SECTION 3.9 Taxes. The Borrower shall indemnify and hold the
Lender harmless from, and the Borrower shall pay to the Lender, all amounts due
or to become due hereunder without deduction for any present or future income,
stamp or other taxes, levies, imposts, deductions, charges or withholdings
whatsoever imposed, assessed, levied or collected by or for the benefit of any
jurisdiction or any political subdivision or taxing authority thereof.
SECTION 3.10 Assignment by Lender. The Lender may transfer or
assign its rights and obligations under this Agreement and the other Loan
Documents to other persons or entities, including, without limitation,
subsidiaries or affiliates of the Lender.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties. The Borrower
represents and warrants to the Lender that:
(a) Organization. The Borrower is a corporation, duly
organized, registered and existing in good standing under the laws of Delaware.
The Borrower has the corporate or other power to own its assets and to transact
the business in which it is presently engaged and in which it proposes to be
engaged. The Borrower is duly qualified to do business and is in good standing
in each jurisdiction in which the character of its property or the transaction
of its businesses as presently engaged and as it proposes to be engaged makes
such qualification necessary.
(b) Authority of Borrower. The Borrower has full legal power
and authority to execute, deliver and perform this Agreement and the Note, and
to borrow the Loan hereunder, and to incur the obligations provided for herein
and in each of the other Loan Documents, all of which have been duly authorized
by all proper and necessary corporate or other action. No consent, approval,
waiver, license, authorization or declaration of, or any filing or registration
with, any person, corporation, partnership, joint venture, governmental agency,
bureau or authority, or any other enterprise or entity (each, a "Person")
(including, without limitation, any stockholder or any other owner of the
Borrower) is or will be required in connection with the execution, delivery or
performance by the Borrower, or the validity, enforcement or priority of,
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<PAGE>
the Loan Documents, except those as shall have been obtained and are in full
force and effect upon the date of the Loan hereunder.
(c) Binding Agreement. This Agreement, the Note and the other
Loan Documents executed by the Borrower constitute the valid and legally
binding obligations of the Borrower enforceable against it in accordance with
their respective terms.
(d) No Violation of Law or Charter. The execution, delivery
and performance by the Borrower of each Loan Document to which it is a party
will not violate any provision of law and will not conflict with or result in a
breach of any order, writ, injunction, ordinance, resolution, decree, or other
similar document or instrument of any court or governmental authority, bureau
or agency, domestic or foreign, or any charter, by-law or other organizational
document or instrument of the Borrower.
(e) Judgments, Actions, Proceedings. There are no outstanding
judgments, actions or proceedings pending or threatened, before any court or
governmental authority, bureau or agency which may have a material adverse
effect on the business, financial condition or operations of the Borrower.
(f) Assets. Except as otherwise disclosed to the Lender, the
Borrower owns all its property and assets free and clear of all liens, security
interests, mortgages and other encumbrances.
(g) Solvency. The Borrower is, and, after giving effect to
the transactions contemplated by this Agreement will be, solvent.
(h) Use of Proceeds. The Borrower will use the proceeds of
the Loan solely for the purposes set forth in Section 2.2 hereof.
(i) Taxes. The Borrower has filed, or caused to be filed, all
tax returns and reports as are required to be filed, and paid all amounts of
taxes, including any interest and penalties required to be paid, except for
such taxes as are being contested in good faith and by proper proceedings and
for which appropriate reserves are being maintained.
(j) Completeness and Accuracy. All the information (financial
or otherwise) supplied by the Borrower to the Lender is true, complete and
accurate and there is no fact known to the Borrower which has not been
disclosed to the Lender by the Borrower which materially and adversely affects
the condition (financial or otherwise), business, operations, properties or
prospects of the Borrower.
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<PAGE>
ARTICLE FOUR
CONDITIONS TO LOAN
SECTION 5.1 Conditions to Loan. The obligation of the Lender
to make the Loan is subject to the fulfillment (to the satisfaction of the
Lender) of the following conditions precedent:
(a) Note. The Borrower shall have executed and delivered to
the Lender the Note.
(b) Stock Pledge Agreement. The Borrower shall have executed
and delivered to the Lender a Stock Pledge Agreement substantially in the form
of Exhibit B hereto (the "Stock Pledge Agreement"), pursuant to which the
Borrower shall pledge to the Lender all of its stock in MMR Hartford as
security for the repayment of the Loan.
(c) Security Agreement. MMR Hartford shall have executed and
delivered to the Lender a Security Agreement substantially in the form of
Exhibit C hereto (the "Security Agreement"), pursuant to which MMR Hartford
shall grant to the Lender a security interest in the Hartford Station to be
transferred to it in accordance with Section 5.1(i) hereof, as security for the
repayment of the Loan.
(d) Evidence of Corporate Action. The Borrower shall have
delivered to the Lender copies of all corporate or other action taken by the
Borrower to authorize the execution, delivery and performance of this
Agreement, the Note and each of the other Loan Documents and the transactions
contemplated hereby and thereby, duly certified by an executive officer of the
Borrower.
(e) Other Documents. The Borrower shall have furnished to the
Lender such other documents, instruments or certificates as the Lender may
request.
ARTICLE FIVE
COVENANTS OF BORROWER
SECTION 6.1 Affirmative Covenants. While the Loan is
outstanding, and until payment in full of the Note and full and complete
performance of all other obligations of the Borrower hereunder and under the
other Loan Documents, the Borrower shall:
(a) Information. Furnish the Lender with copies of such
information, reports or other documents as the Lender may from time to time
request.
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(b) Audits. Permit the Lender to make or cause to be made (at
the Borrower's expense) inspections and audits of any books, records, documents
and contracts of the Borrower and to make extracts and copies thereof.
(c) Inspections. Permit the Lender (at the Borrower's
expense), to make inspections and examinations of the Borrower's premises and
facilities, on reasonable notice, at all such reasonable times and as often as
the Lender may reasonably require.
(d) Taxes. Pay and discharge all taxes, assessments and
governmental charges upon its income and its properties prior to the dates on
which penalties are attached thereto, unless and to the extent only that such
taxes shall be contested in good faith, in an expeditious manner and by
appropriate proceedings by the Borrower and prior to any liens being placed on
any of the Borrower's assets.
(e) Insurance. Maintain at all times, and provide the Lender
with copies of, all such insurance policies (including, without limitation,
property and liability insurance) with responsible insurance companies on such
of its properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity, and file with
the Lender upon the Lender's request, a detailed list of the insurance then in
effect and stating the names of the insurance companies, the amounts and rates
of the insurance, dates of the expiration thereof and the properties and risks
covered thereby, and, within thirty (30) days after notice in writing from the
Lender, obtain such additional insurance as the Lender, may reasonably request.
(f) Existence. Maintain its corporate or other existence in
good standing.
(g) Compliance with Laws. Comply with and observe all laws,
rules, regulations, directives and requirements of all agencies and authorities
having jurisdiction over the Borrower or its properties or assets, including
without limitation laws, rules, regulations, directives and requirements
concerning banking and the provision of financial services.
(h) Local Marketing Agreement. In consideration of the Lender
extending the Loan pursuant to this Agreement and providing for the repayment
mechanisms set forth herein, the Borrower agrees, promptly after its
acquisition of the Hartford Station upon the request of the Lender, to enter
into, or cause its subsidiary which holds title to the Hartford Station to
enter into, a Local Marketing Agreement with the Lender pursuant to which the
Lender shall obtain, for nominal additional consideration, certain rights to
provide programming, sell advertising time and/or other rights with respect to
the Hartford Station.
(i) Ownership of Hartford Station. Promptly after its
acquisition of the Hartford Station, the Borrower agrees to transfer all of its
right, title and interest in and to the Hartford Station to MMR Hartford.
SECTION 6.2 Negative Covenants. While the Loan is
outstanding, and until payment in full of the Note and full and complete
performance of all other obligations of the
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Borrower hereunder and under the Loan Documents, the Borrower shall not,
without the express written consent of the Lender, (i) sell, transfer, lease,
assign or pledge to any person any of the Borrower's direct or indirect right,
title or interest in and to the Hartford Station, (ii) sell, transfer, assign
or pledge to any person any interest in the stock of MMR Hartford held by the
Borrower, or (iii) permit MMR Hartford to sell, transfer, lease, assign or
pledge to any person any interest in the Hartford Station, except as
contemplated by the Security Agreement.
ARTICLE SIX
DEFAULT, ACCELERATION AND REMEDIES
SECTION 7.1 Events of Default. The following events shall be
"Events of Default":
(a) Failure by the Borrower to make any payment of principal
or interest in accordance with the terms of this Agreement, or otherwise comply
with the repayment provisions set forth herein; or
(b) Failure by the Borrower to perform or observe the
provisions of Sections 5.1(h), 5.1(i) or 5.2 hereof; or
(c) Breach by the Borrower or MMR Hartford of any of their
respective covenants or agreements contained in the Stock Pledge Agreement or
the Security Agreement; or
(d) Any proceeding shall be instituted by Borrower or any
third party seeking to establish that (i) any of the Loan Documents is not
valid or enforceable or (ii) the pledge and security interests granted under
the Stock Pledge Agreement or the Security Agreement are not valid and
perfected first priority security interests in the collateral described therein
subject only to liens permitted thereunder; or
(e) Any obligation of the Borrower (other than its
obligations hereunder) for the payment of borrowed money involving an aggregate
amount of $1,000,000 or more either (i) is not paid when due or (ii) becomes or
is declared to be due and payable prior to the expressed maturity thereof as a
result of an event of default; or
(f) The Borrower shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law, now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property or assets, or shall consent to any such official in any
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate or other action to
authorize any of the foregoing; or
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(g) An involuntary case or other proceeding shall be
commenced against the Borrower seeking liquidation, reorganization or other
relief with respect to its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its properties or assets, and such involuntary case or
other proceeding shall remain undismissed for a period of sixty (60) days; or
(h) Any judgment or judgments are rendered against the
Borrower involving an aggregate amount of $50,000 or more, and such judgment or
judgments remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of thirty (30) days.
SECTION 7.2 Remedies Upon Default.
(a) If any one or more of the Events of Default shall occur
and be continuing then:
(i) The entire unpaid balance of the principal of
and interest on the Note outstanding and all other
indebtedness and obligations of the Borrower to the Lender
arising hereunder shall immediately become due and payable,
without presentment or demand for payment, notice of
non-payment, protest or further notice or demand of any kind,
all of which are expressly waived by the Borrower; and
(ii) In addition to exercising all of the rights and
remedies available to it under the Loan Documents and under
applicable law, the Lender shall have the right to file for
government approvals and take other actions, in the name and
on behalf of the Borrower, in order to facilitate or effect
the Hartford Station Transfer.
ARTICLE SEVEN
INDEMNIFICATION
SECTION 8.1 Indemnification. The Borrower shall indemnify the
Lender and each of its directors, officers, employees, attorneys and agents
against, and hold each of them harmless from, any loss, liabilities, damages,
claims, costs and expenses (including reasonable attorneys' fees and
disbursements) suffered or incurred by any of them arising out of, resulting
from or in any manner connected with, the preservation and/or enforcement,
execution, delivery and performance of each of the Loan Documents, the Loan and
any and all transactions related to or consummated in connection with or
contemplated by the Loan, including, without limitation, losses, liabilities,
damages, claims, costs and expenses suffered by the Lender or any of its
directors, officers, employees, attorneys or agents arising out of or related
to any action, claim or proceeding brought by any third person and in
connection with the enforcement of any of its rights under the Loan Documents.
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<PAGE>
ARTICLE EIGHT
MISCELLANEOUS
SECTION 9.1 Power of Attorney. For the purpose of carrying
out the provisions and exercising the rights, powers and privileges granted to
the Lender in the Loan Documents, the Borrower hereby irrevocably constitutes
and appoints the Lender as its true and lawful attorney-in-fact, with full
power of substitution, to execute, acknowledge and deliver any instruments and
do and perform any acts necessary, proper or expedient to protect the Lender's
interests and rights in and under the Loan Documents, all in the name and on
behalf of the Borrower. The power vested in the Lender as the Borrower's
attorney-in-fact is coupled with an interest and cannot be revoked.
SECTION 9.2 Expenses. The Borrower shall on demand of the
Lender reimburse the Lender for all expenses (including without limitation
reasonable legal and other out-of-pocket expenses) incurred in connection with
the preparation, review, negotiation and execution of the Loan Documents, and
the enforcement of the Lender's rights thereunder, irrespective of whether or
not such transactions are implemented, canceled, unutilized or otherwise
withdrawn.
SECTION 9.3 Counterclaims, Defenses, etc. Except as otherwise
provided herein, the due payment and performance of the Borrower's
indebtedness, liabilities and obligations under the Note and this Agreement
shall be without regard to any counterclaim, right of offset or any other claim
whatsoever which the Borrower may have against the Lender and without regard to
any other obligation of any nature whatsoever which the Lender may have to the
Borrower, and no such counterclaim or offset shall be asserted by the Borrower
in any action, suit or proceeding instituted by the Lender for payment or
performance of the Borrower's indebtedness, liabilities or obligations under
the Note, this Agreement or any of the other Loan Documents or otherwise.
SECTION 9.4 Notices. Any notice between the parties hereto or
notices provided for herein to be given shall be in writing and shall be given
(unless otherwise provided herein) by courier, telex or facsimile, such notice
to be effective when sent to the addresses or telex or facsimile numbers
specified below or to such other address or telex or facsimile number as such
party shall specify to the other parties hereto in writing:
(a) If to the Borrower:
Multi-Market Radio, Inc.
One Monarch Place
Suite 220
Springfield, Massachusetts 01144
Attn: Michael G. Ferrel
Facsimile No. (413) 732-7851
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<PAGE>
(b) If to the Lender:
SFX Broadcasting, Inc.
150 East 58th Street
19th Floor
New York, NY 10155
Attn: Robert F. X. Sillerman
Facsimile No.: (212) 753-3188
SECTION 9.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrower and its successors and to
the benefit of the Lender and its successors and assigns. The rights and
obligations of the Borrower under this Agreement or the Note shall not be
assigned or delegated without the prior written consent of the Lender, and any
purported assignment or delegation thereof without such consent shall be void.
SECTION 9.6 Survival of Representations and Warranties. All
representations and warranties made in this Agreement and the other Loan
Documents or in any certificate or statement delivered in connection herewith
or thereunder shall survive the delivery of the Loan Documents and the making
of the Loan hereunder.
SECTION 9.7 Set-Off. In the event that all amounts owing
hereunder become or are declared to be due and payable for any reason,
including, without limitation, in the event of bankruptcy, reorganization or
arrangement proceedings, the Borrower hereby gives to the Lender the right to
set-off against all amounts owing hereunder any monies now or at any time
hereafter owing by the Lender to the Borrower.
SECTION 9.8 Applicable Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
SECTION 9.9 Modifications, Consents and Waivers. No
modification, amendment, consent or waiver of or with respect to any provision
of this Agreement or the other Loan Documents shall be effective unless it
shall be in writing and signed by the parties hereto.
SECTION 9.10 Titles and Headings. The table of contents,
titles and headings of sections of this Agreement are intended for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
SECTION 9.11 Further Assurances. At any time and from time to
time, upon the request of the Lender, the Borrower shall execute, deliver and
acknowledge or cause to be executed, delivered and acknowledged, such further
documents and instruments and do such other acts and things as the Lender may
reasonably request in order to fully effect the purposes of
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<PAGE>
this Agreement, the other Loan Documents and any other agreements, instruments
and documents delivered pursuant hereto or in connection with the Loan.
SECTION 9.12 Entire Agreement. This Agreement and the other
Loan Documents embody the entire agreement and understanding between the Lender
and the Borrower and supersede all prior agreements and understandings relating
to the subject matter hereof and thereof.
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<PAGE>
IN WITNESS WHEREOF, the Borrower and the Lender have duly
executed this Agreement as of the day and year first above written.
MULTI-MARKET RADIO, INC., as Borrower
By: /s/ Michael G. Ferrel
----------------------------------
Name: Michael G. Ferrel
Title: President
SFX BROADCASTING, INC., as Lender
By: /s/ Richard A. Liese
----------------------------------
Name: Richard A. Liese
Title: Vice President
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<PAGE>
EXHIBIT A
FORM OF NOTE
$23,000,000 New York, New York
September ,1996
FOR VALUE RECEIVED, Multi-Market Radio, Inc., a company
organized and existing under the laws of Delaware (the "Borrower"), hereby
promises to pay to the order of SFX Broadcasting, Inc. (the "Lender"), and its
successors and assigns, at its offices at 150 East 58th Street, 19th Floor, New
York, New York 10155, or such other address as may be specified by the Lender
from time to time, the principal sum of Twenty Three Million Dollars
($23,000,000) in accordance with the payment methods set forth in Section 2.6
of the Loan Agreement referred to below; and to pay interest thereon, for the
period commencing on the date each advance of the Loan is made until the Loan
shall be repaid in full, at a rate per annum equal to 12% compounded
semi-annually and payable when the principal hereof shall be due and payable,
all as provided for in the Loan Agreement.
This Note is the Note referred to in the Loan Agreement dated
the date hereof (the "Loan Agreement") between the Borrower and the Lender and
is subject to the terms and conditions contained therein and is entitled to the
benefits thereof and of the Stock Pledge Agreement and the Security Agreement
referred to therein. The terms and provisions of the Loan Agreement are
incorporated into this Note by reference as if set forth in their entirety
herein. All capitalized terms used in this Note and not otherwise defined
herein shall have the respective meanings ascribed to them in the Loan
Agreement.
All indebtedness outstanding under this Note shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) after maturity, whether at stated maturity, by acceleration or
otherwise, at the Default Rate, and all such interest shall be payable on
demand.
Upon the occurrence of any Event of Default, the principal
amount of and accrued interest on this Note may be declared due any payable in
the manner and with the effect provided in the Loan Agreement.
The indebtedness represented by this Note is subordinated to
the extent set forth in the Loan Agreement.
The Borrower agrees to pay all costs of collection and
reasonable attorneys' fees in the event a default occurs in the payment of this
Note.
This Note shall be governed by and interpreted in accordance
with the laws of the State of New York, without regard to principles of
conflicts of law.
<PAGE>
IN WITNESS WHEREOF, the Borrower has duly executed this Note
as of the day and year first above written.
MULTI-MARKET RADIO, INC.
By:__________________________________
Name:
Title:
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<PAGE>
CONSENT AGREEMENT
CONSENT AGREEMENT, dated May 17, 1996, by and among The Huff
Alternative Income Fund, L.P., a Delaware limited partnership (the "Fund"),
Multi-Market Radio, Inc., a Delaware corporation ("MMR") and SFX Broadcasting,
Inc., a Delaware corporation ("SFX").
WHEREAS, the Fund and MMR are parties to a Securities
Purchase Agreement, dated as of March 27, 1995 (as amended, the "Securities
Purchase Agreement"), pursuant to which MMR issued and sold to the Fund (i) a
Senior Subordinated Debenture due 2001, in the Face principal amount of $
18,431,440 (the "Debenture"), (ii) a Common Stock Purchase Warrant dated March
27, 1995, exercisable for 595,000 shares of MMR's Class A Common Stock (the
"First MMR Warrant"), (iii) 1,250 shares of MMR's Senior Cumulative Preferred
Stock, par value $.01 per share (the "MMR Preferred Stock") and (iv) a Common
Stock Purchase Warrant dated September 26, 1995, exercisable for 133,201.54
shares of MMR's Class A Common Stock (the "Second MMR Warrant" and, together
with the First MMR Warrant, herein sometimes referred to collectively as the
"Old MMR Warrants" and individually as the "Old MMR Warrant");
WHEREAS, the Fund and MMR are also party to a Registration
Rights Agreement dated as of March 27, 1995 (the "MMR Registration Rights
Agreement"), pursuant to which the Fund has been granted certain registration
rights with respect to the shares of Class A Common Stock of MMR issued or
issuable upon exercise of the Old MMR Warrants;
WHEREAS, SFX, SFX Merger Company, a Delaware corporation and
a direct wholly-owned subsidiary of SFX ("Acquisition Sub"), and MMR have
entered into an Amended and Restated Agreement and Plan of Merger dated as of
April 15, 1996, as amended as of May 6, 1996, each as attached as Exhibit A
hereto (the "Merger Agreement"), pursuant to which Acquisition Sub, upon the
terms and subject to the conditions of the Merger Agreement, intends to merge
with and into MMR (the "Merger");
WHEREAS, pursuant to a letter dated April 15, 1996, addressed
to the Fund from MMR (the "Consent Letter") and annexed hereto as Exhibit B,
MMR and the Fund agreed in principal, inter alia, that at or immediately prior
to the Effective Time (as defined in the Merger Agreement), and as a condition
to the consummation of the Merger, MMR shall (i) repay and redeem in full, in
cash, the Debenture and the MMR Preferred Stock for an aggregate purchase price
of $21,000,000, plus accrued and unpaid interest and dividends to the date of
repayment and redemption, respectively, and (ii) as a fee to the Fund for the
Fund entering into this Consent Agreement, issue to the Fund the warrants
specified in the Consent Letter (the "New MMR Warrants");
WHEREAS, pursuant to the Consent Letter, the Fund consented
under the Securities Purchase Agreement solely to the execution by MMR of the
Merger Agreement, but reserved all of its rights with respect thereto, and the
Securities Purchase Agreement prohibits MMR from consummating the Merger
without the consent of the Fund;
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the Fund, SFX and MMR hereby agree as follows:
1. Repurchase of Debenture and MMR Preferred Stock. MMR
agrees that at or immediately prior to the Effective Time it shall repay and
redeem in full, in cash, the Debenture and the MMR Preferred Stock for an
aggregate purchase price of $21,000,000, plus accrued and unpaid interest and
dividends to the date of repayment and redemption, respectively (the "Purchase
Price"), and the Fund agrees to the cancellation of the Debenture and the MMR
Preferred Stock at that time upon payment of the Purchase Price.
2. Exchange of Old MMR Warrants. SFX agrees that at the
Effective Time it shall issue to the Fund a Common Stock Purchase Warrant,
dated the Effective Date, and exercisable for such number of shares of Class A
Common Stock, par value $.01 per share, of SFX ("SFX Class A Common Stock"), as
required under Section 2.05 of the Merger Agreement and Section 6 of the Old
MMR Warrants (rounded up to the nearest whole number of shares), in the form of
Exhibit C annexed hereto, in exchange for the Old MMR Warrants (the "SFX
Exchange Warrant"). The exercise price per share of SFX Class A Common Stock of
each SFX Exchange Warrant shall be the quotient of the exercise price of the
Old MMR Warrant for each share of MMR Class A Common Stock divided by the
Exchange Ratio.
3. Issuance of New SFX Warrants. As a fee for the consent
given in Section 3 hereof, SFX agrees that at or immediately prior to the
Effective Time it shall issue to the Fund Common Stock Purchase Warrants, dated
the Effective Date, and exercisable, in the aggregate, for such number of
shares of SFX Class A Common Stock (rounded up to the nearest whole number of
shares) equal to the product of 175,000 multiplied by the Exchange Ratio (as
defined in the Merger Agreement), in the form of Exhibits D-1, D-2, D-3 and D-4
annexed hereto (the "New SFX Warrants"). The New SFX Warrants shall be issued
in lieu of the New MMR Warrants. The exercise price per share of SFX Class A
Common Stock of each New SFX Warrant shall be the quotient of the exercise
price of the related New MMR Warrant for each share of MMR Class A Common Stock
divided by the Exchange Ratio.
4. Registration Rights Agreement. Concurrently with entering
into this Consent Agreement, SFX has executed and delivered to the Fund a
Registration Rights Agreement with the Fund, dated as of the date hereof, in
the form of Exhibit E annexed hereto (the "SFX Registration Rights Agreement").
Upon the consummation of the Merger and the delivery of the SFX Exchange
Warrant and the New SFX Warrants, the SFX Registration Rights Agreement shall
become effective and shall supersede the MMR Registration Rights Agreement in
its entirety.
5. Incorporation of Provisions under the Securities Purchase
Agreement. (a) Each of the covenants contained in Sections 8.1, 8.2, 8.3, 8.4,
8.5(a) and 8.6 of the Securities Purchase Agreement (as in effect on the date
of this Consent Agreement, without regard to any amendment, modification or
waiver of such provisions), together with all related definitions and ancillary
provisions, are hereby incorporated into this Consent Agreement as fully as if
set forth
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<PAGE>
herein in their entirety; provided that: (i) references to the "Company" shall
mean and be a reference to SFX as defined herein; (ii) references to
"Securities" shall mean and be a reference to the SFX Exchange Warrant and the
New SFX Warrants (collectively, the "SFX Warrants"); (iii) references to
"Warrant" shall mean and be a reference to the SFX Warrants as defined herein;
and (iv) references to "Warrant Stock" shall mean and be a reference to the
Warrant Stock as defined in the SFX Warrants. Section 10 of the Securities
Purchase Agreement shall continue to be applicable to the SFX Exchange Warrant
(on terms determined in accordance with such Agreement applying the Exchange
Ratio thereto) but not to the New SFX Warrants. Except as set forth in this
Consent Agreement, none of the other provisions of the Securities Purchase
Agreement shall survive or be of any force or effect after the Effective Time
and the satisfaction of the conditions set forth in Section 9 hereof.
(b) The representation and warranty contained in Section 4.03
of the Merger Agreement (as in effect on the date of this Consent Agreement,
without regard to any amendment, modification or waiver thereof), together with
all related definitions and ancillary provisions, is hereby incorporated into
this Consent Agreement as fully as if set forth herein in its entirety.
(c) This Section 5 shall become effective at the Effective
Time and upon the satisfaction of the conditions precedent set forth in Section
9 hereof.
6. Board Deliberations. The parties hereto acknowledge that
Mr. Kenneth Harmonay abstained from the voting of the Board of Directors of MMR
in connection with the Merger.
7. Directors' and Officers' Liability Insurance;
Indemnification of Directors. (a) MMR has obtained the removal of the exclusion
contained in its directors' and officers' liability insurance relating to
transactions with affiliates (including, without limitation, the Merger and the
other transactions contemplated by the Merger Agreement and this Consent
Agreement).
(b) SFX shall, without limiting the terms of the Merger
Agreement, (i) indemnify, defend and hold harmless each person who is, or has
been at or prior to the Effective Time, a director or officer of MMR from and
against any loss or claim to the same extent as such persons are presently
indemnified by MMR and (ii) maintain a directors' and officers' liability and
corporate indemnification insurance policy covering such loss or claim for a
period of six (6) years after the Effective Time.
8. Consent to Consummation of the Merger. Upon the
satisfaction in full of the conditions precedent set forth in Section 9 hereof
by April 30, 1997, the Fund will consent to the consummation of the Merger and
the nonassumption of the Securities Purchase Agreement pursuant to Section 6 of
the Old MMR Warrants. In the event that the conditions precedent set forth in
Section 9 hereof shall not be satisfied on or before such date (or December 31,
1997, it extended as provided herein) then this Consent shall be null and void
and the Securities Purchase Agreement, the Transaction Documents and the
Related Agreements (as such terms are defined
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<PAGE>
in the Securities Purchase Agreement) shall continue in full force and effect;
provided. however, that if on or before April 30, 1997, the Fund receives the
Purchase Price by wire transfer in immediately available funds and the fully
executed New MMR Warrants having such terms as are set forth in the Consent
Letter and otherwise in the form of the New SFX Warrants (included,
respectively, as Exhibits D-1, D-2, D-3 and D-4 annexed hereto), which receipt
shall be considered irrevocable, such date shall be extended to December 31,
1997. Holders of the New MMR Warrants shall be entitled to the same
registration and other rights as the holders of the Old MMR Warrants as
provided, among other instruments, therein and in the Securities Purchase
Agreement.
9. Conditions to Effectiveness. The effectiveness of Section
8 of this Consent Agreement shall be subject to the following:
(a) Payment by MMR to the Fund of the Purchase Price by wire
transfer in immediately available funds.
(b) The execution and delivery to the Fund by SFX of the SFX
Warrants and the SFX Registration Rights Agreement, each duly executed by SFX.
(c) The Fund shall have received true, complete and correct
copies of the Merger Documents.
(d) The Fund shall have received evidence satisfactory to it
of the removal by MMR of the exclusion contained in its directors' and
officers' liability insurance relating to transactions with affiliates
(including, without limitation, the Merger).
(e) The provisions of Sections 2.01, 2.02, 2.05, 6.01, 6.06,
7.01(a), 7.01(d), 7.01(e), 7.01(f), 7.02(a), 7.03(a) and 7.03(c) of the Merger
Agreement shall not have been amended, modified, deleted or waived directly or
indirectly by any other modification to the Merger Agreement or any other
instrument (a "Modification") in a manner that would be adverse, financially or
otherwise, to the MMR stockholders, to the Fund or to its current or former
designee to the MMR Board of Directors. The other provisions of the Merger
Agreement shall not otherwise have been subject to a Modification that would be
materially adverse, financially or otherwise, to any of such persons.
(f) Schulte Roth & Zabel, the Fund's special counsel, shall
have received promptly after having been invoiced therefor payment in full for
all reasonable legal fees charged, and all costs and expenses incurred by such
counsel through the Effective Date in connection with the transactions
involving SFX or MMR, including, without limitation, the preparation and
negotiation of this Consent Agreement and related instruments and the
preparation and filing of any Schedule 13D under the Securities Exchange Act of
1934, as amended.
(g) The Fund shall have received evidence reasonably
satisfactory to it that (i) the conditions set forth in Sections 7.01(a),
7.01(d), 7.01(e), 7.01(f), 7.02(a), 7.03(a), and 7.03(c)
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<PAGE>
of the Merger Agreement have been fully satisfied and (ii) the Independent
Committee of MMR has approved the Merger and recommended that the Merger
Agreement be approved by MMR's stockholders, and such recommendation has not
been withdrawn or modified.
(h) The Fund shall have received a copy of the written
fairness opinion from Oppenheimer & Co., Inc. dated as of the date of the Proxy
Statement (as such term is defined in the Merger Agreement).
10. Subsequent Holders of SFX Warrants. Whether or not any
express assignment has been made in this Consent Agreement, the provisions of
this Consent Agreement that are for the benefit of the Fund as the holder of
any SFX Warrants are also for the benefit of, and enforceable by, all
subsequent holders of any SFX Warrants.
11. Registration, Transfer and Exchange of SFX Warrants. SFX
shall keep at its principal offices a register in which shall be entered the
names and addresses of the holders of SFX Warrants and particulars of the
respective SFX Warrants held by each such holder and of all transfers of such
SFX Warrants. The holder of any of the SFX Warrants may at any time and from
time to time prior to exercise or redemption thereof surrender any SFX Warrant
held by it for exchange or (subject to compliance with Section 13 hereof)
transfer at such offices of SFX. On surrender for exchange or transfer of the
SFX Warrants, properly endorsed to SFX, SFX at its expense will issue and
deliver to or on the order of the holder thereof a new warrant or warrants of
identical tenor, in the name of such holder or, upon payment by such holder of
any applicable transfer taxes, as such holder may direct, calling in the
aggregate on the face or faces thereof for the number of shares of SFX Class A
Common Stock called for on the face or faces of the SFX Warrants so
surrendered.
12. Replacement of SFX Warrants. Upon receipt of a
certificate of the loss, theft, destruction of mutilation of any SFX Warrant
and, in the case of any such loss, theft or destruction, upon delivery of an
indemnity bond in such reasonable amount as SFX may determine (or, in the case
of any SFX Warrant held by the Fund or another institutional holder of an
unsecured indemnity agreement from the Fund or such other holder reasonably
satisfactory to SFX) or other assurance, or, in the case of any such
mutilation, upon the surrender of such mutilated SFX Warrant for cancellation
to SFX at its principal offices, SFX, at its own expense, will execute and
deliver, in lieu thereof, a new warrant of identical tenor.
13. Restrictions on Transfer. (a) The SFX Warrants and all
warrants issued in exchange therefor or upon conversion or exercise thereof
(the "Restricted Securities"), shall be transferable only upon satisfaction of
the conditions set forth in this Section 13.
(b) Prior to any transfer of any Restricted Securities, the
holder thereof shall be required to give written notice to SFX describing in
reasonable detail the manner and terms of the proposed transfer and the
identity of the proposed transferee (the "Transfer Notice"), accompanied by the
written agreement of the proposed transferee to be bound by all of the
provisions hereof applicable to holders of such Restricted Securities
hereunder. SFX may, if it is reasonable to do so under the circumstances
considering the identity of the proposed transferee
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<PAGE>
and the method of transfer, request an opinion of counsel from the Fund or such
transferee to the effect that such transfer may be made without registration of
such Restricted Securities under the Securities Act of 1933, as amended (the
"Securities Act").
(c) Except as otherwise permitted by this Section 13, each
SFX Warrant shall bear the following legend:
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY
EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN SECTION 13 OF THE CONSENT AGREEMENT, DATED AS OF
MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE HUFF
ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A
COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICES OF SFX BROADCASTING, INC.
AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS
WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE
RESTRICTIONS IMPOSED BY THE COMMUNICATIONS
ACT OF 1934, AS AMENDED.
(d) The restrictions imposed by this Section 13 upon the
transferability of Restricted Securities shall terminate as to any particular
Restricted Securities when such Restricted Securities shall have been sold
pursuant to an effective registration statement under the Securities Act or
sold pursuant to Rule 144 or Rule 144A under the Securities Act. Whenever any
of such restrictions shall terminate as to any Restricted Securities, the
holder thereof shall be entitled to receive from SFX, at SFX's expense, new
warrants without such legends.
14. Right to Call SFX Warrants; Call Closing. (a) At any time
after the Effective Date, SFX may, on one occasion, by notice to the Fund (the
"Call Notice"), elect to purchase from the Fund (and the Fund hereby agrees to
sell to SFX) each SFX Warrant as is then outstanding on a date specified in
such notice not fewer than 30 nor more than 90 days after the date of the Call
Notice out of the funds legally available therefor, at an aggregate price equal
to the product of (x) the "New Call Price Per Share" (as defined below) which
is applicable to such SFX Warrant and (y) the number of shares of Warrant Stock
for which such SFX Warrant is then
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<PAGE>
exercisable (the "New Call Price"). Notwithstanding the foregoing, in the event
of exercise of the SFX Warrants, the provision of Section 3(a) of the SFX
Warrants shall supersede the foregoing to the extent inconsistent. The closing
of the purchase of the SFX Warrants shall take place at the offices of SFX at
10:00 a.m. local time on the date so specified, or at such other time and place
as SFX and the Fund may agree. At such closing, the Fund will deliver to SFX
the SFX Warrants to be repurchased by SFX (properly endorsed or accompanied by
assignments with signature(s) guaranteed or similar appropriate documentation
of authority to transfer), and SFX shall pay to the Fund the New Call Price in
immediately available funds by wire transfer, at the Fund's direction. The "New
Call Price Per Share" with respect to each SFX Warrant per share of SFX Class A
Common Stock shall be the product of (i) the fraction the numerator of which is
the Call Price per share under Section 10.1 of the Securities Purchase
Agreement in effect at the Effective Time and the denominator of which is the
exercise price of the Old MMR Warrant per share of MMR Class A Common Stock in
effect at the Effective Time multiplied by (ii) the exercise price of such SFX
Warrant per share of SFX Class A Common Stock at the Effective Time. By way of
example, the Old MMR Warrants having an exercise price of $7.75 per share of
MMR Class A Common Stock would be converted, assuming an Exchange Ratio of
.3593, into SFX Exchange Warrants with an exercise price per share of $21.57.
The Call Price Per Share for such Warrant would be, assuming a $30 Call Price
under Section 10.1 of the Securities Purchase Agreement, $21.57 multiplied by
$30/$7.75 or $83.49. Assuming the same facts with respect to a New MMR Warrant
with an exercise price of $11.75 per share, such Warrant would be converted
into a New SFX Warrant with an exercise price of $32.70 per share and have a
Call Price Per Share of $126.58.
(b) In case, through a split, recapitalization or otherwise,
(i) at any time the outstanding shares of Common Stock of SFX shall be
subdivided into a greater number of shares, the New Call Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
(ii) conversely, at any time the outstanding shares of Common Stock of SFX
shall be combined into a smaller number of shares, the New Call Price in effect
immediately prior to such combination shall be proportionately increased.
(c) In the event that any portion of the New Call Price is
not payable as a result of any insufficiency of legally available funds or
otherwise, the Fund may elect (i) to accept the portion of the New Call Price
that is so payable and retain all of its rights hereunder and under and in
connection with the SFX Warrants and Warrant Stock, including, without
limitation, under the SFX Registration Rights Agreement, as to that number of
shares of Warrant Stock or portion of the SFX Warrants exercisable for that
number of shares as such unpaid portion of the New Call Price and interest
thereon, determined as set forth below, shall be paid to the Fund in full or
(ii) to reject payment of any portion of the New Call Price (other than the
full amount thereof), in which case SFX's Call Notice shall be deemed revoked
and the Fund shall retain the Warrants and not be required to sell the SFX
Warrants to the Company pursuant to Section 14(a).
15. Indemnification under Securities Purchase Agreement.
Notwithstanding anything to the contrary contained herein, the provisions of
Section 17 of the Securities Purchase
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<PAGE>
Agreement shall remain in full force and effect and SFX hereby expressly
assumes MMR's obligations thereunder.
16. Expense Reimbursement and Indemnification by SFX and MMR.
(a) Whether or not the transactions contemplated by this Consent Agreement and
the Merger Documents shall be consummated, MMR hereby agrees to pay on demand
all reasonable out-of-pocket expenses incurred by the Fund in connection with
such transactions hereunder and thereunder and in connection with any
amendments or waivers (whether or not the same become effective) hereof or
thereof and all reasonable out-of-pocket expenses incurred by the Fund in
connection with the enforcement of any rights hereunder, including without
Limitation: (i) the cost and expenses of preparing and duplicating this Consent
Agreement, the Merger Documents and the SFX Warrants; (ii) the reasonable fees,
expenses and disbursements of Schulte Roth & Zabel, the Fund's special counsel,
in connection with the transactions contemplated by this Consent Agreement or
any Merger Document; and (iii) all taxes (other than taxes determined with
respect to income), including any filing fees and documentary stamp and similar
taxes at any time payable in respect of this Consent Agreement, any Merger
Document or the issuance of any of the SFX Warrants.
(b) SFX and MMR hereby agree, jointly and severally, to
indemnify, defend, exonerate and hold the Fund and each of its affiliates or
partners, and their respective members, officers, directors, employees, agents,
representatives, successors and assigns (collectively, the "Indemnitees")
harmless from and against any and all actions, causes of action, suits, losses,
liabilities, obligations, damages, deficiencies, demands, claims, judgments,
taxes, assessments, settlement costs, court costs and other costs and expenses,
including, without limitation, interest, penalties, fines, costs of
investigation, discovery, case preparation, reasonable attorneys' and paralegal
fees and disbursements (collectively, "Losses"), incurred in any capacity by
any of the Indemnitees based upon, or arising out of, as a result of or
relating to the execution, delivery or performance of this Consent Agreement or
enforcement by any of the Indemnitees hereof (including, without limitation,
any failure by SFX or MMR to comply with any of its covenants hereunder or the
breach by it of any representations or warranties hereunder), the Merger
Documents or any instrument contemplated hereby or thereby, except for any such
Losses arising primarily from such Indemnitee's gross negligence or willful
misconduct.
(c) The obligations of SFX and MMR under this Section 16
shall survive exercise or transfer of the SFX Warrants and the termination of
this Consent Agreement for any reason.
17. Notices. Any notice or other communication required or
permitted hereunder shall be deemed to be delivered if in writing (or in the
form of a telecopy) addressed as provided below and if either (a) actually
delivered or telecopied to said address, (b) in the case of overnight delivery
of a notice, the next business day after properly posted with postage prepaid,
or (c) in the case of a letter, three (3) business days shall have elapsed
after the same shall have been deposited in the United States mails, postage
prepaid and registered or certified:
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<PAGE>
If to the Fund, then to The Huff
Alternative Income Fund, L.P., 67 Park Place, Ninth Floor,
Morristown, New Jersey 07960, Attention: General Partner,
Telecopy No.: (201) 984-5818, or at such other address as the
Fund shall have specified by notice actually received by the
addressor.
If to MMR, then to Multi-Market Radio,
Inc., One Monarch Place, Suite 220, Springfield,
Massachusetts 01144, Attention: Michael A. Ferrel, Telecopy
No.: (413) 732-7851, or at such other address as MMR shall
have specified by notice actually received by the addressor.
If to SFX, then to SFX Broadcasting, Inc.,
150 East 58th Street, 19th Floor, New York, New York 10155,
Attention: Robert F.X. Sillerman, Telecopy No.: (212)
753-3188 or at such other address as SFX shall have specified
by notice actually received by the addressor.
If to any other holder of SFX Warrants, to
it at its address set forth on the books and records of SFX.
18. Successors and Assigns. This Consent Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including, without limitation, subsequent
holders of SFX Warrants agreeing to be bound by all of the terms and conditions
of this Consent Agreement.
19. Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery hereof and the
delivery of the SFX Warrants.
20. Counterparts. This Consent Agreement and any amendments,
waivers, consents or supplements may be executed in two or more counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument. Subject to the satisfaction of
the conditions precedent set forth in Section 9 hereof, this Consent Agreement
shall become effective upon the execution of a counterpart by each of the
parties hereto.
21. Headings. Section and subsection headings in this Consent
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Consent Agreement for any other purpose or be given
any substantive effect.
22. Governing Law. This Consent 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 entirely within such State.
23. Consent to Jurisdiction: Waiver of Jury Trial. (a) Any
action, suit or proceeding arising out of or relating to this Consent Agreement
or the transactions contemplated hereby may be instituted in any federal court
of the Southern District of New York or any state court located in New York
County, State of New York, and each party agrees not to assert, by
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<PAGE>
way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that
this Consent Agreement or the subject matter hereof may not be enforced in or
by such court. The parties irrevocably submit to the exclusive jurisdiction of
such court in any such action, suit or proceeding. Any and all service of
process and any other notice in any such action, suit or proceeding shall be
effective against any party if given personally or by registered or certified
mail, return receipt requested, or by any other means of mail that requires a
signed receipt, postage prepaid, mailed to such party as herein provided.
Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by law or to commence legal proceedings
or otherwise proceed against any other party in any other jurisdiction to
enforce judgments obtained in any action, suit or proceeding brought pursuant
to this Section 22.
(b) Each of the parties hereto hereby irrevocably waives
trial by jury in any action, suit, proceeding or counterclaim, whether at law
or equity, brought by either of them in connection with this Consent Agreement
or the transactions contemplated hereby.
24. Severability. The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Consent Agreement shall not affect or impair the validity, legality and
enforceability of the remaining provisions or obligations under this Consent
Agreement or of such provision or obligation in any other jurisdiction.
25. Entire Agreement. This Consent Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein, other than
the provisions of any documents specifically referred to herein. This Consent
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Consent
Agreement as of the date first written above.
THE HUFF ALTERNATIVE INCOME
FUND, L.P.
By: WHR Partners, L.L.C.,
General Manager
By: /s/ William R. Huff
---------------------------------
Name: William R. Huff
Title: President of General Manager
MULTI-MARKET RADIO, INC.
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<PAGE>
By: /s/ Michael G. Ferrel
---------------------------------
Name: Michael G. Ferrel
Title: President
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
---------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
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<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 17, 1996,
between SFX BROADCASTING, INC., a Delaware corporation (the "Company"), and THE
HUFF ALTERNATIVE INCOME FUND, L.P., a Delaware limited partnership (the
"Fund"), for the benefit of the Fund and any subsequent registered holder of
Registrable Securities (as hereinafter defined). The Fund and such registered
holders are referred to collectively as the "Holders."
This Agreement is executed pursuant to the Consent Agreement,
dated as of the date hereof, among the Company, the Fund and Multimarket Radio,
Inc. ("MMR") (the "Consent Agreement"). In order to induce the Fund to enter
into the Consent Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement in accordance with Section 9 hereof.
The parties hereby agree as follows:
1. DEFINITIONS. The following terms shall have the meanings set forth below:
"Average Closing Price" means, as of any specified date, (x)
if shares of the Company's Class A Common Stock are listed on a
national securities exchange, the average of the closing sales prices
therefor on the largest securities exchange on which such shares are
traded on the last fifteen (15) trading days immediately prior to, but
not including, such date; (y) if such shares are listed on the NASDAQ
National Market System but not on any national securities exchange,
the average of the closing sales prices therefor on the NASDAQ
National Market System on the last fifteen (15) trading days
immediately prior to, but not including, such date; or (z) if such
shares are not listed on either a national securities exchange or the
NASDAQ National Market System, the average of the mean of the high and
low bid and asked quotations therefor on the last thirty (30) trading
days immediately prior to, but not including, such date.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are required or
authorized to be closed.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, collectively, (i) the Class A Common
Stock, par value $.01 per share, the Class B Common Stock, par value
$.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital Stock of the Company,
the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any
other securities into which or for which any of the securities
described in clauses (i) or (ii) above have been converted or
exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
<PAGE>
"Governmental Body" means any foreign, federal, state,
municipal or other government, or any department, commission,
investigative body, board, bureau, agency, public authority or
instrumentality thereof or any court, mediator, arbitrator or other
tribunal.
"Holders" has the meaning set forth in the recitals to this
Agreement. A Person is deemed to be a Holder whenever such Person owns
Registrable Securities or has the right to acquire such Registrable
Securities, whether or not such acquisition has actually been effected
and disregarding any legal restrictions upon the exercise of such
right.
"Majority Holders" means (a) the Fund, so long as the Fund
holds any Registrable Securities and (b) otherwise, the holder or
holders at the relevant time (excluding the Company or any of its
Subsidiaries) of 51% or more of the Registrable Securities then
outstanding.
"Person" means any individual, corporation, general or
limited partnership, joint venture, association, enterprise, joint
stock company, trust, unincorporated organization or other entity.
"Prospectus" means the Prospectus included in any
Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of
the Registrable Securities covered by such Registration Statement and
all other amendments and supplements to the Prospectus, including
posteffective amendments, and all material incorporated by reference
in such Prospectus.
"Registrable Securities" means all shares of Common Stock and
Other Securities (as defined in the Warrants) until such time as (a)
they have been effectively registered and sold under the Securities
Act, or (b) they are distributed to the public pursuant to Rule 144
(or any similar provisions then in force) under the Securities Act and
are not subject to any stop transfer order delivered by or on behalf
of the Company and no other restriction on transfer exists.
"Registration Statement" means any registration statement of
the Company which covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the Prospectus, amendments
and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
"Securities Act" means the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Underwriters Maximum Number" means for any underwritten
Demand Registration, Piggyback Registration or other registration,
that number of shares of
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<PAGE>
securities to which such registration should, in the opinion of the
managing underwriter or underwriters of such registration in light of
market factors, be limited.
"underwritten registration" or "underwritten offering" means
a registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
"Warrants" means (a) Common Stock Purchase Warrants issued by
the Company to the Fund, dated the date hereof, and exercisable for
shares of Class A Common Stock of the Company in exchange for the
Common Stock Purchase Warrants issued by MMR to the Fund, dated March
27, 1995, and September 26, 1995, and exercisable, respectively, into
595,000 and 133,201.54 shares of MMR Class A Common Stock, (b) the
Common Stock Purchase Warrants issued by the Company to the Fund,
dated the date hereof, and exercisable for Class A Common Stock of the
Company, pursuant to Section 3 of the Consent Agreement, (c) all other
warrants transferred to any other holders pursuant to Section 13 of
the Consent Agreement in respect of any of the foregoing, and (d) any
warrants issued as replacements for or in substitution of any of the
foregoing pursuant to Sections 11 and 12 of the Consent Agreement.
2. DEMAND REGISTRATION
2.1 Right to Demand Registration. (a) Subject to Section 2.5, at any
time, any Holder or Holders holding an aggregate of not less than the lesser of
(i) 20% of the Registrable Securities then outstanding and (ii) 5% of the
Registrable Securities outstanding on the date hereof (the "Demand Requesting
Holders") may make a written request to the Company for registration with the
Commission (a "Demand Registration") under and in accordance with the
provisions of the Securities Act of all or part of its Registrable Securities;
provided, however, that the Company shall be required to effect (a) no more
than two such Demand Registrations pursuant to this Section 2 on Form S-1 under
the Securities Act (or any successor form), and (b) in addition, no more than
two such Demand Registrations pursuant to this Section 2 on Form S-2 or Form
S-3 under the Securities Act (or any successor forms), if such Forms are
available to the Company. Within ten days after receipt of any request by such
Demand Requesting Holders under this Section 2.1, the Company will give written
notice (the "Other Holders Notice") of such registration request to all other
Holders, if any, and, subject to Section 2.3, shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein from the Holders thereof within
30 days after the giving of notice by the Company (the amount of Registrable
Securities proposed to be sold by the Demand Requesting Holders and all other
Holders who so request inclusion being hereinafter referred to as the "Offered
Securities").
(b) Notwithstanding anything to the contrary in Section 2.1 (a) above,
if, at any time after the completion of the first Demand Registration
hereunder, the number of Offered Securities in connection with any subsequent
proposed Demand Registration shall be less than 100,000, the Company, at its
option, either may register all such Offered Securities pursuant to Section 2.
l(a) above or purchase all, but not less than all, of the Offered Securities at
an all cash purchase price equal to the product of (x) Average Closing Price as
of the date of delivery of the
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<PAGE>
Election Notice (as defined below) multiplied by (y) the number of Offered
Securities. In the event the Company elects to purchase the Offered Securities,
the Company shall notify the Holders of the Offered Securities, within five
Business Days of delivery of the request for Demand Registration (or, if the
Company shall give the Other Holders Notice, within five Business Days of the
expiration of the 30-day period that such Other Holders Notice must remain
outstanding under Section 2.1 (a) above), which notice (the "Election Notice")
shall indicate: (i) that the Company will purchase the Offered Securities, (ii)
the purchase price, calculated in accordance with the preceding sentence, that
the Company will pay to each Holder and (iii) the date upon which the Company
will repurchase the Offered Securities, which date shall not be later than the
tenth Business Day after delivery of the Election Notice.
(c) Each Demand Registration shall be in the form of an
underwritten offering and managed by an underwriter or underwriters selected by
the Majority Holders or, at the election of the Majority Holders (in their sole
discretion), the Company shall promptly file a "shelf" registration statement,
on an appropriate Form, pursuant to Rule 415 under the Securities Act or any
similar rule that may be adopted by the Commission (the "Shelf Registration").
The Company shall use its best efforts to have the Shelf Registration declared
effective as soon as practicable after such filing and, notwithstanding
anything to the contrary herein, shall use best efforts to keep the Shelf
Registration continuously effective for a period of three years from the date
such Shelf Registration is declared effective.
(d) In addition to the foregoing Demand Registrations, the
Company shall maintain a Shelf Registration permitting the sale of the shares
of Common Stock issuable upon the exercise of the Warrants.
2.2 Effective Registration and Expenses. A registration will count as
a Demand Registration when it has become effective; provided, however, that (i)
if the Demand Requesting Holders withdraw their Registrable Securities after
the filing with the Commission of the initial Registration Statement related
thereto, such demand will count as a Demand Registration notwithstanding that
it does not become effective unless such Demand Requesting Holders agree to pay
all of the Registration Expenses of such Demand Requesting Holders and of the
Company and (ii) an effective Demand Registration will not count as a Demand
Registration if the Demand Requesting Holders have not registered and sold all
of the Registrable Securities requested to be included in such registration by
such Demand Requesting Holders.
2.3 Priority on Underwritten Demand Registrations. If the managing
underwriter or underwriters of any underwritten Demand Registration advise the
Company and the Holders in writing of an Underwriters Maximum Number, the
Company will be obligated and required to include in such registration (i)
first, the Registrable Securities requested to be included in such Demand
Registration by the Holders, pro rata in proportion to the number of
Registrable Securities requested to be included in such registration by each of
them until all such Registrable Securities have been so included and (ii)
second, the Registrable Securities requested to be included in such Demand
Registration by the Company and other Persons, in accordance with the
priorities that exist among them. Neither the Company nor any of its
securityholders (other than Holders of Registrable Securities) shall be
entitled to include any securities in any
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<PAGE>
underwritten Demand Registration unless the Company or such securityholders (as
the case may be) shall have agreed in writing to sell such securities on the
same terms and conditions as shall apply to the Registrable Securities to be
included in such Demand Registration.
2.4 Selection of Underwriters. The managing underwriter and any
additional investment bankers and managers selected by the Majority Holders for
use in connection with any underwritten Demand Registration are subject to the
approval of the Company (such approval not to be unreasonably withheld or
delayed); provided, that the Company hereby consents to the following
investment bankers for purposes of this Section 2.4: Alex. Brown & Sons
Incorporated, Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Goldman Sachs & Co., Morgan Stanley & Co. Incorporated, and
Oppenheimer & Co., Inc.; provided, further, that Gerard Klauer Mattison & Co.
shall not be an approved underwriter or investment banker or manager for
purposes of this Section 2.4.
2.5 Limitations Regarding Registration at the Request of Holders. (a)
The Company shall not be required to effect a Demand Registration under Section
2.1 if the Board of Directors of the Company determines in good faith that
effecting such a registration at such time would have a material adverse effect
upon a proposed sale of all (or substantially all) of the assets of the Company
or a merger, reorganization, recapitalization or similar current transaction
materially affecting the capital structure or equity ownership of the Company
or that the Company is in possession of material information which the Board of
Directors of the Company determines in good faith it is not in the best
interests of the Company to disclose in a registration statement at such time;
provided, however, that the Company may only delay a Demand Registration
pursuant to this Section 2.5 by delivery of a Blackout Notice (as defined
below) within thirty (30) days of delivery of the notice requesting a Demand
Registration under Section 2.1 and only for a period not exceeding three (3)
months (or until such earlier time as such transaction is consummated or no
longer proposed or the material information has been made public) (the
"Blackout Period"). There shall not be more than one Blackout Period in any
twelve (12) month period.
(b) The Company shall promptly notify the Holders in writing
(a "Blackout Notice") of any decision not to effect a Demand Registration
pursuant to this Section 2.5, which notice shall set forth the reason for such
decision (but not disclosing any nonpublic material information unless
expressly requested by Holders) and shall include an undertaking by the
Company promptly to notify the Holders as soon as a Demand Registration may
be effected.
3. PIGGYBACK REGISTRATION
3.1 Right to Include Registrable Securities. Subject to Section 3.3,
if the Company at any time or from time to time proposes to register shares of
its Common Stock under the Securities Act (other than in a registration on Form
S-4 or S-8 or any successor form to such forms or in connection with an
exchange offer or an offering of securities solely to the existing stockholders
or employees of the Company), whether or not for sale for its own account, the
Company shall deliver prompt written notice to all Holders of Registrable
Securities of its intention to undertake such registration and of such Holders'
rights under this Section 3 as
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<PAGE>
hereinafter provided. The Company shall use its best efforts to effect the
registration under the Securities Act of all Registrable Securities with
respect to which the Company receives a request for registration from the
Holders thereof by written notice to the Company within 30 days after the date
of the Company's notice to Holders of its intended registration (which notice
by Holders shall specify the amount of Registrable Securities to be registered
and the intended method of disposition thereof), to the extent necessary to
permit the disposition in accordance with the intended methods thereof of all
such Registrable Securities by including such Registrable Securities in the
registration statement pursuant to which the Company proposes to register the
shares of Common Stock (a "Piggyback Registration"); provided, however, that if
such registration involves an underwritten offering, all Holders requesting
inclusion in the registration shall be required to sell their Registrable
Securities to the underwriters selected by the Company at the same price and on
the same terms of underwriting applicable to the Company and any other Persons
selling shares of Common Stock. The Holders requesting inclusion in a
registration pursuant to this Section 3 may, at any time prior to the effective
date of the registration statement relating to such registration, revoke such
request by delivering written notice to the Company revoking such requested
inclusion. All requests for Piggyback Registration under this Section 3 shall
be without prejudice to the rights of the Holders to request, and shall not be
counted as, Demand Registrations under Section 2 above.
3.2 Priority in Piggyback Registration. If any of the Registrable
Securities registered pursuant to any Piggyback Registration are to be sold in
one or more firm commitment underwritten offerings, and the managing
underwriters advise in writing the Company and the Holders of such Registrable
Securities of an Underwriters Maximum Number, or, in the case of a Piggyback
Registration not being underwritten, the Company shall reasonably determine
(and notify the Holders of Registrable Securities of such determination), after
consultation with an investment banker of nationally recognized standing, that
the number of shares of Common Stock (including Registrable Securities)
proposed to be sold in such offering exceeds the number of shares of Common
Stock which can be sold in such offering within a price range acceptable to the
Company, the Company shall include in such registration only such number of
shares of Common Stock (including Registrable Securities) which in the opinion
of such underwriter or underwriters or the Company, as the case may be, can be
sold within such price range, selected in the following order of priority: (i)
first, all of the shares of Common Stock that the Company proposes to register
(but solely to the extent that the proceeds thereof shall not be used to
purchase Common Stock or Other Securities), (ii) second, the shares requested
by any other Person having made the initial request, (iii) third, the
Registrable Securities requested to be included in such registration by Holders
that have requested their Registrable Securities to be included therein, pro
rata in proportion to the number of Registrable Securities requested to be
included in such registration by each of them and (iv) fourth, other
Registrable Securities requested to be included in such registration by any
other Persons.
3.3 Limitations Regarding Piggyback Registrations. If the Company, at
any time after giving written notice under Section 3.1 of its intention to
register Common Stock and prior to the effectiveness of the registration
statement filed in connection with such registration, determines for any reason
consistent herewith either not to effect such registration or to delay such
registration, the Company may, at its election, by the delivery of written
notice to each
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Holder, (i) in the case of a determination not to effect registration, relieve
itself of its obligation to register the Registrable Securities in connection
with such registration, or (ii) in the case of a determination to delay the
registration, delay the registration of such Registrable Securities for the
same period as the delay in the registration of such other shares of Common
Stock.
4. HOLD-BACK AGREEMENTS
4.1 Restrictions on Public Sale by Holder of Registrable Securities.
Each Holder whose Registrable Securities are included in a Registration
Statement filed pursuant to Section 2 or 3 agrees, if requested by the managing
underwriter or underwriters in an underwritten offering of any Registrable
Securities, not to effect any public sale or distribution of its remaining
Registrable Securities, including a sale pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act (except as part of such
underwritten registration), during the 14 day period prior to, and during the
90-day period (or such shorter period as may be agreed to by the parties
hereto) beginning on, the effective date of such Registration Statement, to the
extent timely notified in writing by the Company or the managing underwriter or
underwriters.
The foregoing provisions shall not apply to any Holder it
such Holder is prevented by applicable statute or regulation from entering into
any such agreement; provided, however, that any such Holder shall undertake, in
its request to participate in any such underwritten offering, not to effect any
public sale or distribution of Registrable Securities (except as part of such
underwritten registration) during such period unless it has provided 7 days'
prior written notice of such sale or distribution to the managing underwriter
or underwriter.
4.2 Restriction on Public Sale by the Company and Others. The Company
agrees (i) not to effect any public sale or distribution of any of its Common
Stock for its own account during the 14-day period prior to, and during the
90-day period beginning on, the effective date of a Registration Statement
filed pursuant to Section 3 or such longer periods as may be required in the
reasonable judgment of the managing underwriter or underwriters (except as part
of such underwritten registration or pursuant to registrations on Forms S-4 or
S-8 or any successor form to such forms or in connection with an exchange offer
or an offering of securities solely to the existing stockholders or employees
of the Company), and (ii) that it will cause each holder of Common Stock
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution of any such securities during such period, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten registration, if permitted).
5. REGISTRATION PROCEDURES
Upon the Company incurring registration obligations under
Section 2 or 3, subject to the limitations contained therein, the Company will
use its best efforts to effect such registrations to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will, at its expense, as
expeditiously as possible:
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(a) prepare and file with the Commission a Registration
Statement relating to such registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof, and use its best efforts to cause such
Registration Statement to become effective; provided, however, that before
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, including documents incorporated by reference after the initial filing
of any Registration Statement, the Company will furnish to the Holders of the
Registrable Securities covered by such Registration Statement, their counsel
and the underwriters, if any, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide them with a reasonable opportunity
to review such documents and comment thereon and approve the form thereof;
(b) prepare and file with the Commission such amendments and
post-effective amendments to a Registration Statement as may be necessary to
keep such Registration Statement effective for a period of not less than 180
days (or such shorter period which shall terminate when all Registrable
Securities covered by such Registration Statement have been sold or withdrawn,
but not prior to the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable); cause the
related Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement during the applicable Period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
or supplement to such Prospectus;
(c) notify each Holder of Registrable Securities included in
the Registration Statement, their counsel and the managing underwriters, if
any, promptly, and (if requested by any such Person) confirm such notice in
writing, (1) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (2) of any
request by the Commission for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (3) of the
issuance by the Commission of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(4) if at any time the representations and warranties of the Company contained
in agreements contemplated by Section 5(n) cease to be true and correct, (5) of
the receipt by the Company of any notification with respect to the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (6) of the happening of any event as a result of which the Prospectus
included in the Registration Statement (as then in effect) contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus or any preliminary Prospectus, in light of the circumstances under
which they were made) not misleading and (7) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exist circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment;
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(d) upon the occurrence of any event contemplated by Section
5(c)(2)-(7), prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, which Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading;
(e) use best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement, or the lifting of
any suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction, at the earliest possible moment;
(f) if requested by a managing underwriter or any Holder of
Registrable Securities, immediately incorporate in a prospectus supplement or
post-effective amendment such information concerning such Holder of Registrable
Securities, the managing underwriter or underwriters or the intended method of
distribution as the managing underwriter or underwriters or the Holder of
Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to such underwriter or underwriters, the purchase price
being paid therefor by such underwriter or underwriters and with respect to any
other terms of the underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; make all required filings
of such Prospectus supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; and supplement or make amendments to any Registration
Statement if requested by a managing underwriter of such Registrable
Securities;
(g) furnish to each Holder of Registrable Securities included
in such Registration Statement and each managing underwriter, if any, without
charge, one manually signed copy of the Registration Statement and any
post-effective amendments thereto, including financial statements and
schedules, and, upon request, all documents incorporated therein by reference
and all exhibits (including those incorporated by reference);
(h) deliver to each Holder of Registrable Securities included
in such Registration Statement, their counsel and the underwriters, if any,
without charge, as many copies of the Prospectus or Prospectuses (including
each preliminary Prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; the Company consents to the use of such
Prospectus or any amendment or supplement thereto by each Holder of Registrable
Securities included in the Registration Statement and the underwriters, if any,
in connection with the offering and sale of the Registrable Securities covered
by such Prospectus or any amendment or supplement thereto;
(i) prior to any public offering of Registrable Securities
use its best efforts to register or qualify, or cooperate with the Holders of
Registrable Securities included in the Registration Statement, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification of, such Registrable Securities for offer and
sale under the
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securities or blue sky laws of such jurisdictions as any Holder or underwriter
reasonably requests in writing; use its best efforts to keep each such
registration or qualification effective, including through new filings or
amendments or renewals, during the period such Registration Statement is
required to be kept effective and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that the Company will not be required to qualify to do business or take any
action that would subject it to taxation or general service of process in any
jurisdiction where it is not then so qualified or subject;
(j) cooperate with the Holders of Registrable Securities
included in the Registration Statement and the managing underwriter or
underwriters, if any, to facilitate, at the election of the Majority Holders,
(x) the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Registrable Securities to be sold under the
Registration Statement or (y) the timely transfer of beneficial ownership of
such Registrable Securities in machine book-entry fashion under the auspices of
The Depository Trust Company or other similar organization; and cause such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriter or underwriters, if any, or such Holders may
request at least two business days prior to any sale of Registrable Securities;
(k) use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by such
Governmental Bodies as may be necessary to enable the seller or sellers thereof
or the managing underwriter or underwriters, if any, to consummate the
disposition of such Registrable Securities;
(l) cause all Registrable Securities included in such
Registration Statement to be (1) listed, by the date of first sale of
Registrable Securities pursuant to such Registration Statement, on each
securities exchange on which the Common Stock is then listed or proposed to be
listed thereon, if any, or (2) quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or the National Market System of
NASDAQ if the Common Stock is then quoted thereon;
(m) provide a transfer agent and registrar for the
Registrable Securities not later than the effective date of such Registration
Statement;
(n) enter into such agreements and take all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of such Registrable Securities and in such connection, in the
case of an underwritten offering, (1) enter into an underwriting agreement in
form, scope and substance as is customary in underwritten offerings by such
underwriter and use its best efforts to obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriter or
underwriters) addressed to each selling Holder and the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other related matters as may be reasonably requested by such
Holders and underwriters, (2) use its best efforts to obtain a "cold comfort"
letter and updates
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thereof from the Company's independent certified public accountants addressed
to each Holder of Registrable Securities included in the Registration Statement
and the underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters given by
accountants in connection with underwritten offerings, (3) the underwriting
agreement shall set forth in full the indemnification provisions and procedures
of Section 7 with respect to all parties to be indemnified pursuant to said
Section, and (4) the Company shall deliver such documents and certificates as
may be reasonably requested by the managing underwriter or underwriters, if
any, to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
above shall be done at each closing under such underwriting or similar
agreement or as and to the extent required thereunder;
(o) make available for inspection by a representative of the
Holders of Registrable Securities included in the Registration Statement, any
underwriter participating in any disposition pursuant to such Registration
Statement and any lawyer, accountant or other advisors retained by such selling
Holders or underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company as they may reasonably
request, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
lawyer, accountant or other advisors in connection with such Registration
Statement, provided, however, that any records, information or documents that
are furnished by the Company and that are non-public shall be used only in
connection with such registration and shall be kept confidential by such
Persons except to the extent disclosure of such records, information or
documents is required by law; and
(p) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its security holders earnings statements satisfying the provisions of
Section 11 (a) of the Securities Act, no later than 90 days after the end of
any 12-month period (1) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm or best efforts
underwritten offering and (2) beginning with the first day of the Company's
first fiscal quarter next succeeding each sale of Registrable Securities after
the effective date of a Registration Statement, which statements shall cover
said 12-month periods.
The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish promptly to the
Company such information regarding the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees by acquisition
of such Registrable Securities that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
5(c)(2)-(7), such Holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(d), or until it is advised in writing by
the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings
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which are incorporated by reference in such Prospectus, and, if so directed by
the Company, such Holder will, or will request the managing underwriter or
underwriters, if any, to, deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the time period mentioned in Section 5(b) during which a Registration Statement
is required to be kept effective shall be extended by the number of days during
the time period from and including the date of the giving of such notice
pursuant to Section 5(c) to and including the date when each seller of
Registrable Securities covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 5(d).
6. REGISTRATION EXPENSES
All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees (excluding Commission registration filing fees, which shall be
paid by each Holder in respect of the number of Registrable Securities of such
Holder included in the registration), fees and expense of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters or selling Holders in connection with blue sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as the managing underwriter or underwriters or Holders of a
majority of the shares of the Registrable Securities being sold may designate),
printing expenses, messenger, telephone and delivery expenses, and fees and
disbursements of counsel for the Company and for the Holders and of all
independent certified public accountants of the Company (including the expenses
of any special audit and "cold comfort" letters required by or incident to such
performance), and of underwriters (excluding the following expenses none of
which shall be paid by the Company: transfer taxes, discounts, commissions or
fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals relating to the distribution of the Registrable
Securities), securities acts liability insurance if the Company so desires and
fees and expenses of other Persons retained by the Company (all such expenses
being herein called "Registration Expenses") will be borne by the Company
whether or not the Registration Statement becomes effective. The Company will,
in any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange on which similar securities issued by the Company are
then listed and the fees and expenses of any Person, including special experts,
retained by the Company.
7. INDEMNIFICATION
7.1 Indemnification by the Company. The Company agrees to indemnify,
defend, exonerate and hold harmless, to the full extent permitted by law, each
Holder of Registrable Securities registered pursuant to any registration
hereunder and each of its Affiliates or partners, each of their respective
members, officers, directors, employees, agents, representatives, successors
and assigns and each Person who controls such Holder, Affiliate or partner
(within the
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meaning of the Securities Act) against any and all actions, causes of action,
suits, losses, liabilities, obligations, damages, deficiencies, demands,
claims, judgments, taxes, assessments, settlement costs, court costs and other
costs and expenses, including, without limitation, interest, penalties, fines,
costs of investigation, discovery, case preparation, defense or appeal, expert
witness fees and expenses and reasonable attorneys' and paralegal fees and
disbursements (collectively, "Losses") incurred by any such Person in any
capacity and caused by any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a Prospectus or any preliminary
Prospectus, in the light of the circumstances under which they were made) not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such Holder or its
representative expressly for use therein. The Company will also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification
of the Holders; provided, however, that if pursuant to an underwritten public
offering of Registrable Securities, the Company and any underwriters enter into
an underwriting or purchase agreement relating to such offering which contains
provisions relating to indemnification and contribution between the Company and
such underwriters, such provisions shall be deemed to govern indemnification
and contribution as between the Company and such underwriters.
7.2 Indemnification by Holders. In connection with any registration
hereunder, each Holder participating in such registration will promptly furnish
to the Company in writing such information and affidavits with respect to such
Holder as the Company reasonably requests for use in connection with any
Registration Statement or Prospectus (limited, in each case, to such Holder's
identity, organization, domicile, Registrable Shares held and intended method
of distribution) and agrees to indemnify, defend, exonerate and hold harmless,
to the full extent permitted by law, the Company, its directors, officers and
agents and each Person who controls the Company (within the meaning of the
Securities Act) against any Losses incurred by any such Person in any capacity
and caused by any untrue statement of a material fact or any omission of a
material fact required to be stated in any Registration Statement or Prospectus
or preliminary Prospectus or necessary to make the statements therein (in the
case of a Prospectus, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information or affidavit with respect
to such Holder so furnished in writing by such Holder or its representatives to
the Company specifically for inclusion in such Registration Statement or
Prospectus. In no event shall the liability of any selling Holder hereunder be
greater in amount than the net dollar amount of the proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution to the same
extent as provided above with respect to information so furnished in writing by
such persons or their representatives to the Company specifically for inclusion
in any Prospectus or Registration Statement.
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<PAGE>
7.3 Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party. Notwithstanding
the foregoing, any Person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of
such Person unless (a) the indemnifying party has agreed in writing to pay such
fees or expenses, (b) the indemnifying party shall have failed to assume the
defense of such claim and employ counsel reasonably satisfactory to such Person
or (c) based upon a written opinion of counsel for such Person, a conflict of
interest may exist between such Person and the indemnifying party with respect
to such claims (it being understood that (x) in the case of each of (a), (b)
and (c) above, the fees and expenses of such separate counsel to such
Person shall be paid by the indemnifying party and (y) in the case of (c)
above, if the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld or delayed). No indemnifying party will be required to
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to the indemnified party of a release from all liability in respect
to such claim or litigation. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim, in which event the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels.
7.4 Contribution. If the indemnification provided for in this Section
7 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expense referred to
therein, then the 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 or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action; provided, however, that in no event shall the liability of any selling
Holder hereunder be greater in amount than the difference between the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such contribution obligation and
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all amounts previously contributed by such Holder with respect to such losses,
claims, damages, liabilities and expenses. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
8. RULE 144
The Company agrees that it will file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and it will take such further
action as any Holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
9. EFFECTIVENESS. This Agreement shall be effective upon consummation
of the Merger (as defined in the Consent Agreement).
10. MISCELLANEOUS
10.1 No Adequate Remedy at Law. In the event of a breach by the
Company of its obligations under this Agreement, each Holder, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate. The
failure to file a Registration Statement within 45 days of a written request
delivered under Section 2.1 shall constitute, in the absence of an injunction
or a Blackout Period having been imposed, a breach thereof entitling the
Holders to remedies hereunder.
10.2 No Inconsistent Agreement. (a) Except for the registration rights
contained in the Underwriters Warrants, the Company has not previously entered
into any agreement with respect to its Capital Stock granting any registration
rights to any Person.
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(b) The Company will not on or after the date of this
Agreement enter into any agreement with respect to its securities, (i) which
grants demand registration rights to anyone other than the Holders or (ii)
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof;
provided, that if, notwithstanding the foregoing, on or after the date hereof
the Company, in breach of this Agreement, enters into any agreement with
respect to its securities which grants more favorable registration rights to
any Person than those granted to the Holder pursuant to this Agreement, at the
election of the Majority Holders (in their sole discretion), this Agreement
shall be deemed to be amended, as of the date of any such agreement, to grant
such more favorable registration rights to the Holders, and such election may
be made without prejudice to any right of the Holders, whether in law or
equity, arising from such breach.
10.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter which relates exclusively
to the rights of Holders of Registrable Securities whose securities are being
sold pursuant to a Registration Statement and which does not directly or
indirectly affect the rights of other Holders may be given by Holders owning a
majority of the shares of the Registrable Securities being sold by such
Holders, provided that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
10.4 Notices. Any notice or other communication required or permitted
hereunder shall be deemed to be delivered if in writing (or in the form of a
telecopy) addressed as provided below and if either (a) actually delivered or
telecopied to said address, (b) in the case of overnight delivery of a notice,
the next business day after properly posted with postage prepaid, or (c) in the
case of a letter, three business days shall have elapsed after the same shall
have been deposited in the United States mails, postage prepaid and registered
or certified:
If to the Company, then to SFX
Broadcasting, Inc., 150 East 58th Street, 19th Floor, New
York, New York 10155, Attention: Robert F.X. Sillerman,
Telecopy No.: (212) 753-3188 or at such other address as the
Company shall have specified by notice actually received by
the addressor.
If to the Fund, then to The Huff
Alternative Income Fund, L.P., 67 Park Place, Ninth Floor,
Morristown, New Jersey 07960, Attention: General Partner,
Telecopy No.: (201) 984-5818, or at such other address as the
Fund shall have specified by notice actually received by the
addressor.
If to any other Holder of Registrable
Securities, to it at its address set forth on the books and
records of the Company.
The failure to deliver a copy of any notice
to any party's counsel shall not affect the validity of such
notice.
- 16 -
<PAGE>
10.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, including, without limitation, subsequent Holders of Registrable
Securities agreeing to be bound by all of the terms and conditions of this
Agreement.
10.6 Counterparts. This Agreement and any amendments, waivers,
consents or supplements may be executed in two or more counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart by each of the parties hereto.
10.7 Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.
10.8 Governing Law. This 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 entirely within such State.
10.9 Consent to Jurisdiction; Waiver of Jury Trial. (a) Any action,
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any federal court of the
Southern District of New York or any state court located in New York County,
State of New York, and each party agrees not to assert, by way of motion, as a
defense or otherwise, in any such action, suit or proceeding, any claim that it
is not subject personally to the jurisdiction of such court, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court. The parties irrevocably
submit to the exclusive jurisdiction of such court in any such action, suit or
proceeding. Any and all service of process and any other notice in any such
action, suit or proceeding shall be effective against any party if given
personally or by registered or certified mail, return receipt requested, or by
any other means of mail that requires a signed receipt, postage prepaid, mailed
to such party as herein provided. Nothing herein contained shall be deemed to
affect the right of any party to serve process in any manner permitted by law
or to commence legal proceedings or otherwise proceed against any other party
in any other jurisdiction to enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section 10.9.
(b) Each of the parties hereby irrevocably waives trial by
jury in any action, suit, proceeding or counterclaim, whether at law or equity,
brought by either of them in connection with this Agreement or the transactions
contemplated hereby.
10.10 Severability. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement shall
not affect or impair the validity, legality and enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.
- 17 -
<PAGE>
10.11 Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein, other than the provisions of any
Transaction Documents specifically referred to herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and understandings between the parties with respect to
such subject matter.
10.12 Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
10.13 Construction. The Company and the Fund acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company and
the Fund.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
---------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
THE HUFF ALTERNATIVE INCOME FUND, L.P.
By: WRH Partners, L.L.C.,
General Partner
By: /s/
---------------------------------------
President of General Manager
- 18 -
<PAGE>
Right to Purchase [ ] Shares of Class A
Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI- MARKET RADIO, INC.,
THE HUFF ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE
AND CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES
OF SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS
IMPOSED BY THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the
"Company"), hereby certifies that, for value received, THE HUFF ALTERNATIVE
INCOME FUND, L.P., a Delaware limited partnership (the "Fund"), or assigns, is
entitled, subject to the terms set forth below, to purchase from the Company at
any time or from time to time after the date hereof and prior to the expiration
hereof pursuant to Section 2.2 hereof, an aggregate of [ ] fully paid and
non-assessable shares of Class A Common Stock, at an initial purchase price per
share of [insert quotient determined by dividing $11.75 by the Exchange Ratio
(rounding the resulting exercise price down to the nearest whole cent)]. (Such
number of shares as adjusted from time to time as provided herein is referred
to as the "Warrant Shares" and such price per share as adjusted from time to
time as provided herein is referred to herein as the "Exercise Price".)
This Warrant, together with the Other Warrants (as defined
below), is being issued pursuant to the Consent Agreement, dated as of May 17,
1996, among the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the
"Consent Agreement"). The holder of this Warrant shall be entitled to all of
the benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
<PAGE>
1. DEFINITIONS. The following terms shall have the meanings set forth below:
"Additional Shares of Common Stock" means any shares of
Common Stock issued by the Company after the date hereof, other than Warrant
Stock and shares of Common Stock issuable upon exercise or conversion of the
securities listed on Exhibit A hereto. For purposes of this Warrant, only the
securities of the Company listed on Exhibit A shall be deemed outstanding on
the date hereof and any securities not listed on Exhibit A shall be deemed
issued after the date hereof and, therefore, the issuance thereof shall be
subject to Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number
of Warrant Shares which would be purchasable from time to time hereunder upon
the exercise of this Warrant divided by (y) the total number of shares of
Common Stock then outstanding and deemed (in accordance with Section 7.1
hereof) to be then outstanding, including the Warrant Shares issuable upon
exercise of this Warrant, provided, however, that for purposes of computing
clause (y) above at any time, any Additional Shares of Common Stock issued or
sold or deemed issued or sold after the date hereof at an Effective Price
greater than the Exercise Price in effect immediately prior to such issuance or
sale or deemed issuance or sale shall be disregarded. On the date of the
issuance of this Warrant, the Applicable Percentage is ___ percent (__ %). A
sample calculation of the Applicable Percentage as of the date hereof is set
forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x)
if shares of the Company's Class A Common Stock are listed on a national
securities exchange, the average of the closing sales prices therefor on the
largest securities exchange on which such shares are traded on the last fifteen
(15) trading days immediately prior to, but not including, such date; (y) if
such shares are listed on the NASDAQ National Market System but not on any
national securities exchange, the average of the closing sales prices therefor
on the NASDAQ National Market System on the last fifteen (15) trading days
immediately prior to, but not including, such date; or (z) if such shares are
not listed on either a national securities exchange or the NASDAQ National
Market System, the average of the mean of the high and low bid and asked
quotations therefor on the last thirty (30) trading days immediately prior to,
but not including, such date.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, participations, rights in, other shares of beneficial
interest or other equivalents (however designated and whether voting or
non-voting, or preferred or common) of such Person's capital stock, whether
outstanding on the date hereof or issued thereafter, and any and all warrants,
options and other rights to acquire such capital stock (including, without
limitation, by way of conversion or exchange).
- 2 -
<PAGE>
"Charter" means the articles or certificate of incorporation,
statute, constitution, joint venture, operating or partnership agreement or
articles or other organizational document of any Person other than an
individual, each as from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), the Class B
Common Stock, par value $.01 per share, and the Class C Common Stock, par value
$.01 per share, of the Company, (ii) any other Capital Stock of the Company,
the holders of which shall have the right, without limitation as to amount,
either to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares
entitled to preference, and (iii) any other securities into which or for which
any of the securities described in clause (i) or (ii) above have been converted
or exchanged pursuant to a plan of recapitalization, reorganization, merger,
sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware
corporation, and any corporation which shall succeed to or assume (whether in
writing or otherwise) the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or
sale of Capital Stock, the lowest consideration per share received by the
Company upon such issuance or sale; (b) with respect to any issuance or sale of
any rights to subscribe for or to purchase, or grant of options for the
purchase of shares of Capital Stock or Convertible Securities, the price per
share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights or
the granting of such options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise of
such rights or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the conversion or exchange
thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion or
exchange of the maximum number of such Convertible Securities issuable
on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, the minimum aggregate amount of additional
consideration (if any) payable to the Company upon such conversion or
exchange; by
- 3 -
<PAGE>
(y) the maximum number of shares of Common Stock issuable as
of the late of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common
Stock) and other securities of the Company or any other entity (corporate or
otherwise) (i) which the holder of this Warrant at any time shall be entitled
to receive, or shall have received, on the exercise of this Warrant, in lieu of
or in addition to Common Stock, or (ii) which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or
Other Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants
issued by the Company to the Fund, dated the date hereof, and exercisable for
(i) shares of Class A Common Stock of the Company in exchange for the Common
Stock Purchase Warrants issued by MMR to the Fund, dated March 27, 1995, and
September 26, 1995, and exercisable, respectively, into 595,000 and l 33,201.54
shares of MMR Class A Common Stock, and (ii) shares of Class A Common Stock of
he Company issued in consideration, together with this Warrant, for the Fund
entering into the Consent Agreement.
"Person" means any individual, corporation, general or
limited partnership, limited liability company, joint venture, association,
enterprise, joint stock company, trust, unincorporated organization or other
entity.
"Property" means all types of real, personal or mixed
property and all types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or
hereafter shall at the time awn directly or indirectly through a Subsidiary at
least a majority of the outstanding Capital Stock entitled to vote generally in
the election of directors.
"Warrants" means (a) this Warrant, (b) all other warrants
transferred to any other holders in respect of this Warrant and (c) any
warrants issued as replacements for or in substitution of any of the foregoing
pursuant to Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of
the Warrants in accordance with their terms and any Capital Stock or Other
Securities into which or for which such Common Stock shall have been converted
or exchanged pursuant to any recapitalization, reorganization or merger of the
Company.
2. EXERCISE OF WARRANT.
2.1 Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
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<PAGE>
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2. l(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before application of any adjustment required pursuant hereto) for which this
Warrant shall have been exercised.
(b) The holder of this Warrant shall have the right, at its
election, in lieu of delivering the Exercise Price in cash, to instruct the
Company in the form of subscription to retain, in payment of the Exercise
Price, a number of shares of Class A Common Stock (the "Payment Shares") equal
to the quotient of (i) the aggregate Exercise Price of the shares as to which
this Warrant is then being exercised divided by (ii) the Average Closing Price
as of the date of exercise and to deduct the number of Payment Shares from the
shares to be delivered to the holder hereof.
2.2 Expiration of the Warrant. This Warrant shall expire on
__________, 2002 [the sixth anniversary of the date of issuance]; provided,
however, that in the event that this Warrant has not been exercised in full,
this Warrant (or any warrant issued in exchange for this Warrant or pursuant to
Section 2.1 (a) above) shall not expire until __________, 2006 [the tenth
anniversary of the date of issuance], unless the holder of this Warrant shall
have notified the Company in writing, prior to __________, 2002 [the sixth
anniversary of the date of issuance].
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at
the time and in the manner specified in Section 14 of the Consent
Agreement. Upon the initial exercise, in whole or in part, by the
holder of this Warrant of its rights under Section 2.1 above, the
Company shall (i) have ten (10) days from the date of such exercise to
deliver a written notice (the "Repurchase Notice") to the holder
exercising the Company's rights under such Section 14 to repurchase
this Warrant and (ii) be obligated to consummate the repurchase of
this Warrant no later than ninety (90) days from the date of such
exercise of this Warrant under Section 2.1 above; provided, that
notwithstanding anything to the contrary in the Consent Agreement, if
(x) the Repurchase Notice shall not be so delivered or (y) the
Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to
repurchase this Warrant shall terminate without further action by any
party and the holder of this Warrant shall be entitled to the full
benefits of this Warrant.
(b) The holder of this Warrant has the right to cause the
Company to register
- 5 -
<PAGE>
and to maintain the registration of the shares of Warrant Stock under
the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner
specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes then due) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Class A
Common Stock (or Other Securities) to which such holder shall be entitled on
such exercise, together with any other Capital Stock or Other Securities and
Property (including cash, where applicable) to which such holder is entitled
upon such exercise.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS.
In case at any time or from time to time, the holders of Common Stock shall
have received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive,
without payment therefor:
(a) other or additional Capital Stock or Other Securities or
Property (other than cash) by way of dividend; or
(b) other or additional (or less) Capital Stock or Other
Securities or property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property including
cash in the case referred to in clause (b) of this Section 5) which such holder
would have received prior to or would have held on the date of such exercise if
on the date hereof he had been the holder of record of the number of shares of
Class A Common Stock called for on the face of this Warrant. During the period
from the date hereof to and including the date of such exercise, such shares
and all such other or additional Capital Stock and Other Securities and
Property (including ash in the case referred to in clause (b) of this Section
5) receivable by such holder as aforesaid, giving effect to all further
adjustments called for during such period by Sections 6 and 7 hereof, shall be
held by the Company in trust for the benefit of the holder of this Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1 Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such
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<PAGE>
case, the holder of this Warrant, on the exercise hereof as provided in Section
2 hereof at any time after the consummation of such Capital Transaction shall
receive, in lieu of the Class A Common Stock (or Other Securities) issuable on
such exercise prior to such consummation or effective date, the Capital Stock
and Other Securities and Property (including cash) to which such holder would
have been entitled upon such consummation or in connection with such Capital
Transaction if such holder had so exercised this Warrant immediately prior
thereto, all subject to further adjustment thereafter as provided in Sections 5
and 7 hereof.
6.2 Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6. l (iii), the Person acquiring all or substantially all
of the assets of the Company, whether or not such Person shall have expressly
assumed the terms of this Warrant as provided in Section 8 hereof.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1 Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1 (b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number of
Warrant Shares pursuant to this Section 7.1, no adjustment to the Exercise
Price shall be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible Securities;
Rights and Options.
(i) In case at any time after the date hereof the Company shall in any
manner issue or sell any rights or options to subscribe for or to purchase
(x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such
convertible or exchangeable capital stock or securities being hereinafter
referred to as "Convertible Securities") at an Effective Price less than
the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights or options or the right to convert or exchange
any such Convertible Securities are immediately exercisable, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
rights or options or upon conversion of exchange of the total maximum
amount of such Convertible
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<PAGE>
Securities issuable upon the exercise of such rights or options shall (on
the date of the granting of such rights or options) be deemed
constructively issued and shall (on and after the date of the issuance or
sale of such rights or options) be deemed outstanding. Except as provided
in Section 7.1 (c) below, no further adjustments of the number of Warrant
Shares shall be made pursuant to this Section 7.1 upon the actual exercise
of such rights or options or upon the actual issuance of shares of Common
Stock upon conversion or exchange of such Convertible Securities.
(ii) In case at any time the Company shall in any manner issue or sell
any Convertible Securities at an Effective Price less than the Exercise
Price in effect immediately prior to such issuance or sale, whether or not
the rights to exchange or convert thereunder are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall (on the
date of the issuance or sale of such Convertible Securities) be deemed
constructively issued and shall (on and after the date of the issuance or
sale of such Convertible Securities) be deemed outstanding, provided, that,
except as otherwise specified in Section 7.1 (c) below, (x) no further
adjustments of the number of Warrant Shares shall be made pursuant to this
Section 7.1 upon the actual issuance of Common Stock upon conversion or
exchange of such Convertible Securities, and (y) if any such issuance or
sale of such Convertible Securities is made upon exercise of any rights to
subscribe for or to purchase or any option to purchase any such Convertible
Securities for which adjustments of the number of Warrant Shares have been
or are to be made pursuant to clause (i) of this Section 7. l(b), no
further adjustment of the number of Warrant Shares shall be made pursuant
to this clause (ii) by reason of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section 7.1
(b)(i) hereof or purchasable upon the conversion of any Convertible Securities
referred to in Section 7.1(b) or (b)(ii) hereof shall change or a different
number of such shares than originally set out by the terms of such rights,
options or Convertible Securities shall be issued upon such exercise or
conversion at any time or from time to time or if such right or option or
Convertible Security shall terminate, be cancelled or otherwise lapse without
exercise in whole or in part, then, upon the effectiveness of such event, the
number of Warrant Shares shall forthwith be changed to such number of shares of
Common Stock as would have been obtained had all adjustments made under this
Section 7.1 been made at the time of such event based upon (x) the number of
shares of Common Stock theretofore actually delivered upon the exercise of any
options or rights or upon the conversion or exchange of any Convertible
Securities, and (y) the number of shares of Common Stock then purchasable upon
the exercise of all of the rights, options and Convertible Securities to the
extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
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<PAGE>
(e) Stock Splits and Reverse Splits. In case at any time
after the date hereof, the Company shall subdivide the outstanding shares of
Common Stock into a greater number of shares, the number of Warrant Shares
immediately prior to such subdivision shall be proportionately increased, and
conversely, in case at any time the Company shall combine the outstanding
shares of Common Stock into a smaller number of shares, the number of Warrant
Shares immediately prior to such combination shall be proportionately reduced,
in each case, so that the then existing Applicable Percentage does not change.
7.2 Adjustment of Exercise Price. The Exercise Price shall be subject
to adjustment From time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company
shall issue or sell, or shall be deemed to have issued or sold pursuant to
Section 7.2(b) or (c) below, any Additional Shares of Common Stock at an
Effective Price less than the Exercise Price in effect immediately prior to
such issuance or sale or deemed issuance or sale, then forthwith upon such
issuance or sale the Exercise Price in effect immediately prior to such
issuance or sale shall be reduced to a price equal to the Effective Price of
such issuance or sale.
(b) In case at any time after the date hereof the Company
shall in any manner issue or sell any rights or options to subscribe for or to
purchase any Common Stock or Convertible Securities at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights or options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, then the maximum
number of shares of Common Stock issuable upon the exercise of such rights or
options or upon conversion or exchange of the maximum number of such
Convertible Securities issuable upon the exercise of such rights or options
shall be deemed to be issued or sold for such Effective Price; provided,
however, that upon the expiration of all, but not less than all, of such rights
or options, and, in the ease of options to purchase Convertible Securities,
upon the expiration in whole, but not in part, of the right to convert or
exchange such Convertible Securities, the currently applicable Exercise Price
in effect immediately prior to such expiration shall forthwith
be adjusted to such Exercise Price as would have been obtained had the
adjustments made upon the issuance of such rights of the granting of such
options been made upon the basis of the issuance of only the number of shares
of Common Stock actually issued on the exercise of such rights or options or on
the conversion or exchange of such Convertible Securities (or in the case of
rights or options to purchase Convertible Securities, actually issued and at
the time still issuable upon the conversion or exchange of the Convertible
Securities actually issued), and upon the basis of only the consideration
applicable thereto, and any shares issuable upon the exercise of such rights or
options which have expired or upon the conversion or exchange of such
Convertible Securities, the right to convert or exchange which has expired,
shall not thereafter be deemed to be outstanding and the consideration
applicable thereto shall not thereafter be deemed to have been received. If
such rights or options are issued or granted in conjunction with the sale of
Other Securities of the Company, the part of the consideration allocable to
such rights and options, and the part of the consideration allocable to such
Other Securities, shall be determined in good faith by Board of Directors of
the Company in a certificate delivered promptly to the holder of this Warrant
setting forth the calculations used in determining such allocation. At its
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<PAGE>
election, the holder of this Warrant may confirm the allocation noted on the
certificate by causing such allocation to be determined by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
(c) In case at any time after the date hereof the Company
shall in any manner issue or sell any Convertible Securities at an Effective
Price less than the Exercise Price in effect immediately prior to such issuance
or sale, whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise Price shall
forthwith be adjusted to such Exercise Price which would have been obtained had
the adjustments made upon the issuance of such Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
actually issued upon the conversion or exchange thereof, and upon the basis of
the consideration applicable only to the Convertible Securities so converted or
exchanged, and no shares issuable upon the conversion or exchange of such
Convertible Securities which were not actually so issued shall thereafter be
deemed to be outstanding and the consideration applicable thereto shall not
thereafter be deemed to have been received. No adjustment of the Exercise Price
shall be made pursuant to this Section 7.2(c) upon any issuance or sale of
Convertible Securities if such issuance or sale has been made upon the exercise
of any rights to subscribe for or to purchase, or any options to purchase, any
such Convertible Securities for which an adjustment of the Exercise Price has
been made pursuant to Section 7.2(b) above.
(d) If the amount of consideration payable to the Company
upon the exercise of any right or option to which Section 7.2(b) above is
applicable or upon the conversion or exchange of any Convertible Securities
referred to in Section 7.2(b) or (c) above shall change at any time (other than
under or by reason of provisions designed to protect against dilution), then,
forthwith upon each such change becoming effective, all such rights or options
or all such rights of conversion or exchange not theretofore exercised shall be
deemed to have expired or terminated, as the case may be, and the Exercise
Price shall forthwith be adjusted in accordance with the proviso contained in
Section 7.2(b) or (c) above, as the case may be, and further adjusted as though
such rights or options or Convertible Securities deemed expired or terminated
were newly issued and convertible or exercisable upon the payment of such
changed consideration.
(e) If the consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or exchange of any
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<PAGE>
Convertible Securities referred to in Section 7.2(b) or (c) above shall
decrease at any time under or by reason of provisions with respect thereto
designed to protect the holders thereof against dilution, the Exercise Price
which would apply if this Warrant were being exercised immediately prior to
such event shall forthwith be decreased to the Exercise Price that would have
been obtained had the adjustments made upon the issuance of such right, option
or Convertible Securities been made upon the basis of (i) the issuance of (and
the total consideration received for) the shares of Common Stock theretofore
delivered upon the exercise of such rights or options or upon the conversion or
exchange of such Convertible Securities, and (ii) the issuance of (and the
total minimum consideration thereafter receivable for) the maximum number of
shares of Common Stock thereafter deliverable upon the exercise of such rights
or options or upon the conversion or exchange of such Convertible Securities.
Any right or option to purchase shares of Common Stock or any Convertible
Securities issued after the date hereof which shall contain provisions designed
to protect the holders thereof against dilution shall expressly provide that
adjustments of the Exercise Price hereunder or of the number of Warrant Shares
purchasable hereunder or the issuance of any shares of Warrant Stock upon the
exercise hereof shall be excluded from the operation of such provisions
protecting the holders of such rights, options or Convertible Securities
against dilution, so that in the event of any such adjustment of the Exercise
Price hereunder or of the number of Warrant Shares purchasable hereunder or the
issuance of any shares of Warrant Stock upon the exercise hereof, there shall
be no adjustment in the amount of consideration payable to or receivable by the
Company upon the exercise of any such rights or options or the conversion or
exchange of any such Convertible Securities.
(f) In case any dividends on any class of Capital Stock
(other than Common Stock) of the Company, payable in Common Stock, shall be
declared or paid by the Company, the Common Stock so issued shall be deemed to
have been issued without consideration.
(g) In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common Stock or
Convertible Securities shall be issued or sold for cash, the consideration
received by the Company therefor shall be deemed to be the amount received by
the Company therefor, after deducting therefrom all underwriting commissions,
discounts or concessions and all finder's fees paid or allowed by the Company
in connection therewith.
(h) In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common Stock or
Convertible Securities shall be issued or sold for consideration other than
cash, then, in any such event, the amount of the consideration (other than
cash) received by the Company shall be the fair market value of such
consideration, as determined in good faith by the Board of Directors of the
Company, after deducting all underwriting commissions, discounts or concessions
and all finder's fees paid or incurred by the Company in connection therewith.
Such fair market value and the calculations used in determining such fair
market value shall be set forth in a certificate delivered promptly to the
holder of this Warrant. At its election, the holder of this Warrant may confirm
the valuations noted on the certificate by using such valuations to be
determined by an independent certified public accountant acceptable to the
holder of this Warrant at the expense of the Company. The
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<PAGE>
determination of such independent certified public accountant shall be final,
conclusive and binding for all purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any
time, (i) issue any shares of Common Stock as a dividend upon Common Stock, or
(ii) issue any shares of Common Stock in subdivision of outstanding shares of
Common Stock by reclassification or otherwise, or (iii) combine outstanding
shares of Common Stock by reclassification or otherwise, the then current
Exercise Price shall be adjusted to a price determined by dividing (x) the
number of shares of Common Stock outstanding immediately prior to such
dividend, subdivision or combination, multiplied by the then current Exercise
Price, by (y) the total number of shares of Common Stock outstanding
immediately after such issue, and the resulting quotient shall be the adjusted
Exercise Price per share.
7.3 Additional Provisions.
(a) In determining the number of shares of Common Stock
outstanding at any time, shares of Common Stock owned by the Company or any
Subsidiary thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of
Warrant Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise
Price pursuant to Section 7.2 hereof may arise from the same transaction or
circumstances and, in such event, each of the provisions of Sections 7.1 and
7.2 hereof shall be applicable to such transaction or circumstances as set
forth in such Sections.
(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4 Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common Stock
herein as references to Other Securities to the extent applicable, and the
computations, adjustments and readjustments provided for in this Section 7 with
respect to the number of shares of Class A Common Stock issuable upon exercise
of this Warrant shall be made as nearly as possible in the manner so provided
and applied to determine the amount of Other Securities from time to time
receivable on the exercise of this Warrant, so as to provide the
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<PAGE>
holder of this Warrant with the benefits intended by this Section 7 and the
other provisions of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the number of shares of the Company's Common Stock
then outstanding on a fully diluted basis, and (ii) the number of shares of
Class A Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7 hereof) on account thereof. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its
election, the holder of this Warrant may confirm the adjustment noted on the
certificate by causing such adjustment to be computed by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
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<PAGE>
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of Capital Stock or any other securities or
Property or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the
Company or any transfer of all or substantially all the assets of the
Company to or any consolidation or merger of the Company with or into
any other Person; or
(c)any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any
shares of Capital Stock or any Other Securities, or any right or
option to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any Other Securities (other than the issuance of
Class A Common Stock on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, or capitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the Persons or class of Persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed
at least sixty (60) days prior to the date specified in such notice on which
any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or incompliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any
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<PAGE>
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy) addressed as provided below and if either (a) actually
delivered or telecopied to said address, (b) in the case of overnight delivery
of a notice, the next Business Day after properly posted with postage prepaid,
or (c) in the case of a letter, three Business Days shall have elapsed after
the same shall have been deposited in the United States mails, postage prepaid
and registered or certified:
If to the Company, then to SFX Broadcasting, Inc., 150 East
58th Street, 19th Floor, New York, New York 10155, Attention: Robert
F.X. Sillerman, telecopy No.: (212) 753-3188 or at such other address
as the Company shall have specified by notice actually received by the
addressor.
If to the Fund, then to The Huff Alternative Income Fund,
L.P., 67 Park Place, Ninth Floor, Morristown, New Jersey 07960,
Attention: General Partner, telecopy No.: (201) 984-5818, or at such
other address as the Fund shall have specified by notice actually
received by the addressor.
If to any other holder of record of this Warrant or any
Warrant Stock to it at its address set forth on the books and records
of the Company.
The failure to deliver a copy of any notice to any party's
counsel shall not effect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable, in
whole or in part, by the holder hereof or thereof, subject to the conditions
specified in Section 13 of the Consent Agreement.
15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the holder of this Warrant and the Company. This
Warrant 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 entirely
within such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of __________, 199_
- 15 -
<PAGE>
SFX BROADCASTING, INC.
By:_______________________________________
Name:
Title:
- 16 -
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase Warrant, hereby
irrevocably elects to exercise this Common Stock Purchase Warrant for, and to
purchase thereunder ______ shares of Class A Common Stock of SFX Broadcasting,
Inc. and herewith [makes payment of $__________ therefor] [instructs you
herein, in payment of the Exercise Price, to deduct shares of Class A Common
Stock and to deliver the net number of shares, being ______ shares of Class A
Common Stock], and requests that the certificates for such shares be issued in
the name of, and delivered to
_____________________________________________________, whose address is
- -----------------------------------------------------------------------------.
Dated: __________________ _________________________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant or
its assigns)
------------------------------------------------
(Address)
- 17 -
<PAGE>
FORM OF ASSIGNMENT
To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns,
and transfers unto _____________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ________ shares of
Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ___________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated:_____________________ By:_______________________________________
Title:_____________________________________
Address:__________________________________
Signed in the presence of:
- ---------------------------------
- 18 -
<PAGE>
EXHIBIT A
(100,000 Warrants to be issued in connection with Consent)
SAMPLE CALCULATION OF APPLICABLE PERCENTAGE 1
--------------------------------------------
Applicable Percentage = X
----------
X + Y
where X = the number of Warrant Shares
Y = total number of shares of capital stock outstanding or
deemed outstanding (other than Warrant Shares)
Calculation of X
- ----------------
X = 32,860 (100,000 x .32862)
Calculation of Y
- ----------------
Y = 6,458,215 Class A Common Stock
1,000,000 Class B Common Stock
2,000 Series B Redeemable Preferred Stock
2,000 3 Series C Redeemable Preferred Stock
3,285,113 Shares of Class A Common Stock issuable upon
conversion of Series D Convertible Exchange
Preferred Stock or Exchange Notes, as the case may
be
950,000 3 Options issuable under SFX Stock Option Plans and
employment agreements
350,000 1993 Stock Option Plan (350,000 issued)
150,000 1994 Stock Option Plan (146,000 issued)
250,000 1995 Stock Option Plan (250,000 issued)
200,000 Options to be issued to RFX Sillerman
pursuant to his Employment Agreement
- --------
1 Exact numbers will vary depending on outstandings and actual
Exchange Ratio.
2 Assumes an Exchange Ratio in the MMR Merger of .3286.
3 Not included if redeemed or not outstanding.
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<PAGE>
150,000 4 Shares of Class A Common Stock issuable to Seller of
WHSL-FM Greensboro, North Carolina
600,000 SCMC Warrants to purchase 600,000 shares of Class A
Common Stock
MMR Merger
----------
2,078,0665 Shares of SFX capital stock to be issued to holders
of all classes of MMR capital stock
Class A 3,016,500
Class B 140,000
Class C 360,000
Original Preferred 200,000
Series A Convertible 200,000
Series B Convertible 200,000
Class A Warrants 1,839,500
Class B Warrants 368,000
(1,840,000 x one-fifth) ________
6,324,000 x .3286 = 2,078,066
556,386 5 Warrants, stock options and other rights to acquire
shares of SFX capital stock issuable to the holders
of MMR warrants, stock options and other rights
IPO Warrants 125,000
Unit Purchase Options 480,000
Stock Options under Stock Option Plan 350,000
Class B Warrants
in connection with Southern Starr 10,000
Existing Huff Warrants 728,202
----------
1,693,202 x .3286 = 556,386
=======
- --------
4 Not included if redeemed or not outstanding.
5 [Number to be inserted upon Effective Date of Merger will reflect
actual outstandings then converted]
- 20 -
<PAGE>
24,645 Additional new warrants issued to Huff in connection with the consent
- ----------
15,106,425
==========
Applicable Percentage = 32,860 = 0.2171%
----------------------------
15,139,285
(32,860 + 15,106,425)
- 21 -
FOR IMMEDIATE RELEASE FROM: MULTI-MARKET RADIO, INC.
150 East 58th Street
New York, NY 10155
212-407-9126
Contact: Cynthia A. Bond
MULTI-MARKET RADIO ADDS THIRD MYRTLE BEACH STATION
NEW YORK, August 29, 1996 -- Multi-Market Radio, Inc. (NASDAQ: RDIOA) today
announced that it has acquired radio station, WMYB(FM), serving the Myrtle
Beach, South Carolina market from Puritan Radiocasting Company for $1.1 million.
Multi-Market Radio has been providing programming and sells advertising on
behalf of the station pursuant to a Local Marketing Agreement (LMA).
The Company currently owns and operates radio station WYAK(FM) and provides
programming and sells advertising on radio station WVCO(FM) pursuant to an LMA
with an option to purchase; both stations serve the Myrtle Beach market.
Commenting on the acquisition, Michael G. Ferrel, President and Chief Executive
Officer said, "We are very pleased to now own this station which joins our two
hot country stations creating a strong Myrtle Beach cluster. WMYB, which plays
70s rock, is a good complement to our other stations. We are extremely proud of
the clusters of stations we have been creating in this region, and look forward
to their continuing contributions to revenues and broadcast cash flow."
Millard S. Younts of Media Services Group brokered the transaction.
In April 1996, SFX Broadcasting, Inc. (NASDAQ: SFXBA) announced that it would
acquire Multi-Market Radio. MMR common stock shareholders will receive the stock
equivalent of $12.00 per common share, subject to adjustment. It is anticipated
that this transaction will close within the next sixty days subject to
shareholder approval and the approval of the Federal Communications Commission
and certain other conditions. There can be no assurance that the transaction
will be consummated.
Multi-Market Radio, headquartered in New York City, currently owns, provides
programming for, sells advertising on behalf of or has agreed to acquire the
following thirteen stations in seven markets:
WKSS(FM) Hartford, CT*
WHMP(FM) Springfield/Northampton, MA
WPKX(FM) Springfield/Northampton, MA
WHMP-AM Springfield/Northampton, MA
- more -
WPLR(FM) New Haven, CT
WYBC(FM) New Haven, CT**
<PAGE>
WGNE(FM) Daytona Beach, FL
WCHZ(FM) Augusta, GA**
WKNN(FM) Biloxi, MS
WMJY(FM) Biloxi, MS
WVCO(FM) Myrtle Beach, SC***
WYAK(FM) Myrtle Beach, SC
WMYB(FM) Myrtle Beach, SC
*Under contract to be acquired
**Joint Selling Agreement
***Local Marketing Agreement
In addition, the Company owns KOLL(FM) in Little Rock, AR, which is under
contract to be sold.
# # #
- 2 -
FOR IMMEDIATE RELEASE FROM: MULTI-MARKET RADIO, INC.
150 East 58th Street
New York, NY 10155
212-407-9126
Contact: Cynthia A. Bond
MULTI-MARKET RADIO ACQUIRES WKSS(FM) IN HARTFORD FOR $18 MILLION
NEW YORK, September 4, 1996 -- Multi-Market Radio, Inc. (NASDAQ: RDIOA) today
announced that it has acquired radio station WKSS(FM) which serves the Hartford,
Connecticut market from Precision Media Corporation for $18.0 million.
Upon the completion of the previously announced merger between Multi-Market
Radio and SFX Broadcasting, Inc. (NASDAQ: SFXBA), WKSS(FM) will become part of a
cluster of stations: WMRQ(FM), WHCN(FM) and WPOP-AM, all of which serve the
Hartford market.
Commenting on the transaction, Michael G. Ferrel, President and Chief Executive
Officer, said, "We are very excited to have gained WKSS which when combined with
the Hartford stations that SFX now owns will create a highly desirable cluster
of stations. With this powerhouse in Hartford and the number one stations in
Springfield, WPKX, and New Haven, WPLR, we have established a terrific Northeast
radio corridor."
WKSS(FM), which plays Top 40, is the number one ranking station in women 18-34
and the second highest in persons 18-34 according to recent Arbitron ratings.
Hartford is the forty-first largest metro market in the United States.
SCMC represented the buyer and Dick Blackburn of Alexandria, Virginia-based
Blackburn & Co. represented the seller in this transaction.
In April 1996, SFX Broadcasting announced that it would acquire Multi-Market
Radio. MMR common stock shareholders will receive the stock equivalent of $12.00
per common share, subject to adjustment. It is anticipated that this transaction
will close within the next sixty days subject to shareholder approval and the
approval of the Federal Communications Commission and certain other conditions.
There can be no assurance that the transaction will be consummated.
Multi-Market Radio, headquartered in New York City, currently owns, provides
programming for, sells advertising on behalf of or has agreed to acquire the
following thirteen stations in seven markets:
WKSS(FM) Hartford, CT* WMJY(FM) Biloxi, MS
WHMP(FM) Springfield/Northampton, MA WKNN(FM) Biloxi, MS
<PAGE>
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WHMP-AM Springfield/Northampton, MA WCHZ(FM) Augusta, GA*
WPKX(FM) Springfield/Northampton, MA WMYB(FM) Myrtle Beach, SC
WPLR(FM) New Haven, CT WVCO(FM) Myrtle Beach, SC**
WYBC(FM) New Haven, CT* WYAK(FM) Myrtle Beach, SC
WGNE(FM) Daytona Beach, FL
*Joint Selling Agreement **Local Marketing Agreement
In addition, the Company owns KOLL(FM) in Little Rock, AR, which is under
contract to be sold.
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